Tough economic times are upon us, and companies will need to develop innovative ways to keep their businesses growing and thriving.
While organisations might be tempted to increase lead generation to compensate for lagging revenue, consumers may be more prudent during recessions and less willing to engage with new brands or spend generously.
Instead, cultivating the relationships you already have becomes ever more important during an economic downturn.
Rather than focusing solely on filling your sales pipeline, take time to engage with your existing customers so you can build a more steady and solid community around your venture.
Why is customer engagement so beneficial?
Yes, lead generation helps a company grow. There is no question about that.
But you might run into some roadblocks with your attempts to acquire new clients during a recession, and find that consumers are keeping their pockets tightly sealed.
Even in more steady economic periods, only a small percentage of leads actually translate into buying customers. In a recession, as you can imagine, this number decreases drastically.
Customer engagement, on the other hand, is a much more feasible option during tough times, and can significantly increase your revenue and expand your business.
Here are 5 reasons why…
It’s more budget-friendly
Did you know it’s five times more expensive to acquire a new customer than to retain a current one? Surely an important fact to bear in mind.
According to Corporate Visions, 80% of companies spend over 70% of their marketing budget on lead and demand generation. In theory there’s nothing wrong with that, until you learn that, on average, only 10%-15% of leads turn into sales.
Alternatively, nurturing good relationships with already existing customers is significantly less costly, and holds higher potential for repeated sales.
Customer loyalty is valuable
It cannot be overstated how valuable customer loyalty actually is. Loyal customers don’t just stick around, they drive business growth.
According to Yopto, 39.4% of loyal customers will pay more for your product even when there’s a cheaper alternative available.
Moreover, 60% of loyal customers will also talk about your brand to their family and friends, which means free promotion - more on that below.
Loyalty programmes are key in engaging with committed customers. These gestures signal to customers that you are willing to invest in them, reward them and provide them benefits for their loyalty.
Upselling and cross-selling possibilities
Upselling and cross-selling provide increased revenue without high marketing costs. Both can only appeal to existing customers. But what are they actually, how do they differ and why are they beneficial?
Upselling - The practice of encouraging customers to purchase a higher-end but comparable product to the one they are currently considering.
Cross-selling - The practice of presenting customers with a product that compliments the product they are currently considering.
While these two practices differ, the strategies can be employed in tandem. Moreover, both attempt to present maximum value and satisfaction to customers, while also benefiting an organisation by increasing its sales.
The power of word of mouth
Here’s a little secret: marketing can be free! Word of mouth promotion is a goldmine for brands.
If B2Bs are able to create positive customer experiences and cultivate meaningful relationships with their clients, there’s a high chance those same clients will spread the word. Great service equals more free promotion.
Word of mouth can have a huge effect. It is often hard to measure just how much it can spread awareness for your brand, but oftentimes it's like quickfire. Best of all, it’s completely free and may increase your revenue significantly.
Especially during recessions, customers are more picky and careful about what companies they engage with, hence the benefits of talking to someone they trust about a brand that comes highly recommended!
Increased feedback
Bettering your customer relationships also means asking them for feedback. Existing customers will often willingly provide you with information of how their buying experience was, what can be improved, and what could have been done differently.
This doesn’t necessarily translate into increased sales on the outset, but investing in your relationships means asking them what you as a brand can do to improve.
Feedback is valuable information that can ultimately make a brand more aware of its strengths, its shortcomings, and the path it needs to take forward.
Final thoughts
Recessions are not pleasant for anyone. Just as organisations anticipate the pain of less business, customers will also take a hit.
The good news is that B2Bs can take steps to prepare for economic downturns by further investing in their customer relationships.
Rather than focusing solely on filling the sales pipeline, turning your attention to your existing resources is a savvy way to create resiliency for your brand. And your biggest existing resource is your dedicated customers.
By putting your relationships first and investing time and effort into your base, you’ll see your revenues climb and your reputation soar.