How do you grow your business in a recession?28th of September, 2020
Increase your market share with a focus on Customer Service Excellence.
How do you grow your business in a recession?
You might think that's a strange question when the majority of businesses are very nervous, if not fearful about the next 12 months; but it is possible to grow your business in a recession.
In the last recession, I was running a business within a large corporate giant. We spent the first three months focusing on making sure we had a firm and secure financial position. The next stage of our discussions was to look ahead to define the actions we were going to make to enable us to grow our business in a recession.
The option we chose was a focus upon gaining a greater market share of our existing markets. How does the maths work? Let me give you an example.
- You start with a 10% market share of a £10M market giving you sales revenue of £1M.
- The recession hits and the market size reduces to £8M; however, you are able to increase your market share to 15% (15% x £8M = £1.2M).
- The market recovers and you retain your new market share of a £10M market (15% x £10M = £1.5M)
There is no magic silver bullet solution to growing market share. However, in our discussions, we agreed that the critical factor would be customer service. Those organisations that could deliver outstanding customer service would be able to outperform the market, retaining their current customers, attracting customers from competitors and attracting any new customers that might appear in the market.
Customer Service Excellence includes Right-First-Time quality with 100% on-time delivery to the customer’s request. Add in strong relationships, fast response and flexible, innovative processes (designed around the needs of the customer) and you are well on the way to excellence.
Re-bundling your products/services in a way that reflects the changing needs of your customers provides advantages too: refreshing your portfolio and helping to weed out poor margin items.
Customer Service Excellence requires minimal financial investment and actions are entirely under your control.
This initiative enabled us to outperform our competitors and increase market share.
If you want to reflect on your options and have a conversation about how best to grow your business in a recession we'd be delighted to have a discussion with you. Take care.