How businesses can stay robust during a recession

SME Publications/ SME XPO 2024

By Sridhar Iyengar, Managing Director, Zoho Europe

With the United Kingdom entering what is predicted to be a two-year recession, economic strain is being placed on businesses, staff, and customers. This requires a re-evaluation of current business practices and a new outlook to remain robust, protecting both employees and customers until the economy rebounds.

Chancellor of the Exchequer Jeremey Hunt has looked to spark business and economic growth through the Autumn Statement and Edinburgh Reforms which relaxed regulation to provide businesses with increased freedom. He also emphasised support for emerging technologies for businesses in an attempt to turn the UK into the next Silicon Valley.

While the government’s support is encouraging, it is critical for businesses to take additional action. They must re-align their approach towards partnerships, technology, and supporting the customer base if they are to be resilient during the recession and reap the benefits of the Chancellor’s planned growth.

Businesses should be a partner

Businesses should be a partner to their customers, taking the relationship beyond the buying and selling of goods and services. Businesses depend on each other, so it is crucial to understand the needs of your customers and suppliers so that you can work together to solve each other’s problems and collectively overcome the difficult times ahead. For example, It is important to understand customers’ industries to be able to help them anticipate what they need.

Ensuring customers know they can rely on your support for the long-term and that you are focused on providing solutions to their challenges to drive their business forwards, is a key aspect of being a good partner.

Consistent investment in research and development to provide the latest product innovation, as opposed to being distracted serving other stakeholder interests, is vital to remain competitive and deliver the strong customer experience needed to form and maintain long-lasting business relationships.

For established SMEs and larger businesses, demonstrating reliability, transparency, and stability to your customer base is an important step to build trust and support during a recession.

A study of 600 businesses across the globe by Economist Impact revealed that 82 per cent of businesses require transparency before they can build trust, and is the most important factor in doing so. The report also highlighted that, according to businesses, building a partnership with trust is key to customer satisfaction and loyalty, operational efficiency, employee satisfaction, and long-term revenue growth.

Demonstrating these qualities can be achieved through measures such as transparent data handling policies, a track record of a happy, loyal customer base, and putting the customer’s needs first in the development and delivery of products and services.

For start-ups, engaging with businesses that showcase these traits can offer huge support and relying on business partners who have experienced difficult times previously is an invaluable resource. Zoho, for example, has been through the 2008 recession, as well as several other economic downturns, and understands the difficulties economic instability can pose, as well as how to overcome them, enabling the company to help guide its partners and customers through these challenging times.

Technology consolidation is key

Technology plays a critical role in business operations but is often used inefficiently through numerous applications and services which don’t interact or integrate effectively.

Consolidating the number of vendors to the minimum required provides a multitude of benefits to enable business operations to run smoothly and consistently, for a reduced cost. This can simplify how technology is being used and make the most out of collaboration between data and applications. Vendor consolidation can also reduce the cost and resources required for tasks such as contract and renewal management, something which is increasingly important in austere times.

The problem of siloed data can be easily solved by reducing the number of vendors. These silos develop naturally over time if an organisation doesn’t have a well-planned data management strategy. Repositories of data are then stored in many standalone systems, making it extremely difficult to use and to draw out accurate and real-time insights to further drive business success.

With complexity removed through keeping the number of vendors to a minimum and choosing one platform as the core data repository, a whole host of new possibilities emerge from which a business can transform and take positive action. For example, it can have a hugely positive impact on both employee and customer experience, saving large amounts of time being wasted from locating, accessing, and sharing data.

Employee experience is a critical factor in delivering great customer experience. Technology consolidation can also help to empower staff by freeing them up to engage in more fulfilling tasks. This can raise the quality of their service and simultaneously saves time and money for the business.

R&D as a growth-driver

Prioritising research and development spending, even during challenging economic circumstances, enables businesses to level-up their processes to address customer needs and ensure a high standard of employee and customer experience.

R&D focus is a major factor behind Zoho surpassing $1 billion in annual revenue, with aims to double investments in emerging technologies such as blockchain and artificial intelligence to enhance customer experience over the coming years. A typical R&D spend for innovative companies is between 5 and 15 per cent.

15 per cent may be too great an ask for smaller businesses, but it remains an area that requires attention and encourages thinking about how companies are using technology – and how they can deploy it better.

Customer experience is uncuttable

During a recession, retaining and attracting new customers is essential. That requires businesses to emphasise customer experience, not cut budgets in this vital area. Delivering a great customer experience is increasingly reliant on digital transformation. For example, the pandemic served as a catalyst for self-service with customers growing accustomed to the convenience across a variety of means from e-commerce to sales to compliance and beyond.

It is time businesses deliver the long sought-after single customer view, utilising the visibility at every stage of the customer journey to combine data on one platform. Consolidation of technology can make this seamless and improves customer experience, rather than housing data in many different systems, which makes it challenging to see the full context and all interactions, and often leads to disjointed customer service.

Businesses should invest in their self-service stack to ensure they can deliver the self-sufficiency that customers expect, not only keeping their customers happy, but reducing the complexity, costs, and risks involved in achieving great customer experience at any scale.

Customer experience is no longer solely representative of the product offering or price, it is heavily influenced by a smooth customer journey. Every touchpoint impacts a customer’s behaviour and loyalty with your brand, and this is a large factor in customer retention and brand loyalty.

Employee experience significantly impacts customer experience

The need for a flawless customer journey has driven a shift from customer relationship management to customer experience, and there are factors which can influence this delivery. The implementation of improved user experience platforms should be a priority for businesses, who can utilise low-code and no-code design studios, for example, to create a superior UX and help employees deliver create the flawless customer journey that users expect.

Not only are the expectations of customers evolving, but the expectations of staff are too. Fuelled by the pandemic, the adoption of remote, hybrid and more flexible working models have changed the ways employees can, and crucially want, to work.

Especially after the great resignation, employees want flexibility to take control of how they work. With the quality of customer experience linked to the quality of employee experience, businesses shouldn’t neglect the value of keeping staff happy and motivated.

With customer, user, and employee experience at the heart of business success, cutting budgets in these departments can be detrimental during a recession. Staff and customers are the keys to business survival and must be prioritised even through economic uncertainty.

The challenges of the recession will hit all businesses from start-ups to SMEs to multinational companies. Regardless of size or industry, it is vital that businesses prepare correctly to get through the next few years and set themselves up for growth on the other side.

SME Publications/ SME XPO 2024