Are You Prepared For The Coming Economic Slowdown?

There are many people on both sides of the fence when it comes to the health of the economy. Some are talking about how strong the U.S. economy is, while others are warning of an impending doom you ought to be prepared for. Have you given it any thought? 

You should.

I have many times over the years, and here is what I know for certain: If you build a good business with systems, processes, and loyal customers on the back of a good product or service, an economic downturn will be less of an issue for you. 

On the flip side, if you build a transactional business with little to no relationship with your customers, few sources for leads, and a sloppy sales process, you should lie awake at night in fear because it is only a matter of time before you start struggling to get by or go out of business. 

The Future Is Wild

As we come to the end of 2019, I see so many businesses that haven’t cultivated or maintained relationships with their customers. They are going to struggle in the months or years ahead, and it’s likely they won’t make it through the next downturn. 

I’m sounding the alarm bells now so you can get ready, because it is coming. I’m not going to pretend I can predict when or how severe, but like the housing market proved in 2008, it can’t go up forever. 

Fortunately, you have the opportunity right now to fix problems that will be business killers when another recession hits. Right now is the time to build relationships with your customers and improve your customer experience. Right now is the time to make sure you have four or more lead sources so that when one or two of them go bad during the economic downturn, you’re not out of business. 

The Future Can Be Yours

Of course, a lot of people are going to wait. For them, the issue isn’t urgent until they have evidence of a recession in their hands. But by the time the government admits that we’re in a recession, two quarters in a row will have sucked for growth. At that point, making the changes will be more difficult. 

Think of it like this: If you fix some of the issues in your business — for example, your customer relationships, or lack thereof — what’s the worst that happens? The economy keeps growing for a few more years and you make a crapton more money? On the other hand, if you don’t fix those relationships and customers start bailing for the low-price leader, you’re screwed. 

It is not a matter of if, but when. The question is this: Are you going to be prepared? 

I hope so, but I don’t want to be all doom and gloom in this article, so let me switch gears and give you an action plan for 2020 to make sure that you’re ready when the economy shifts. 

Customer Relationship And Experience

Late last year, I called up CenturyLink to talk about the fiber optic internet I was going to have installed at my office. I sent an email to the customer service manager because it was taking three weeks to get a response to multiple emails we’d sent about the install process and activation time frame. 

When I spoke to the manager, she told me her team is overworked and that their typical response time to emails is currently two weeks. What?! I asked her if she was joking, and she said she was not. Two days in most cases is too long, let alone weeks. 

You’re not the government or a semi-monopoly like a utility company, and neither am I. Our customers won’t tolerate a two-week response time. What is the experience like in your company? I’m sure it isn’t that bad, but is it great? Could it be improved? How would you improve it? 

Don’t Let Today Pass By 

What about customer relationships? Do your customers think they’re just a number? Do you actually communicate with them at least once a month with something that isn’t a sales pitch, a customer service email, or a bill? If not, you’re losing the relationship. In a down economy, you will be treated as a commodity and discarded if you’re not the lowest price in town. 

How about lost customers or churn? Do you know the true number of lost customers you have each month? What about lost revenue, where a customer decreases their average spend with you? Do you know how much that is each month? You have to know these numbers. 

How is the employee morale at your office? Does it need to be fixed? Do people enjoy coming to work, or do they merely tolerate it? If your employees only kind of like coming to work now and the economy takes a downturn and they’re miserable, can you imagine how bad that customer service is going to be? 

What’s the sales process like? Are you leaving money on the table? How do you close more deals from the leads you already have? How can you generate more referrals? 

These are all areas you need to focus on today to be prepared for tomorrow. Tomorrow is going to come in with a force. Ignore my advice at your own peril.