Four investments in digital to recession-proof your business
Whether a recession is on the horizon or not, it already feels like many organizations are preparing for one by beginning to announce cost-cutting measures. At face value, slashing spending across the board makes sense. If you expect consumers to spend less, then why shouldn’t you spend less, too?
But, if you want your business to not only survive an economic downturn, but thrive during recovery, a one-size-fits-all strategy focused on cost-cutting isn’t likely to be your best path forward.
Recessions challenge the very core of businesses and their survival will depend on an agile, customer-centric digital strategy.
Check out these four investments that you can’t afford to skimp on during a recession — or at any time if you want to grow:
1. Qualitative user research
Most leaders rely on data analytics to help them make decisions about the future. While quantitative data collection is important for keeping your business afloat, it has its limits.
During a recession, most customers pull back spending — seemingly indiscriminately. And quantitative data can only help you understand what has already happened. Unless you’ve already invested in a predictive analytics strategy, you’ll be hard-pressed to decipher what your customers need in the future from that historical information.
To craft that predictive analytics strategy, leading firms invest in qualitative user research with ideal clients to learn how their behavior might change in a recession. That data helps them build out strategies now, to ensure they are ready to be agile and respond quickly to keep clients when the economy turns.
In addition, recessions create entirely new customer segments based on a confluence of new unmet needs in the market. Qualitative research can help you develop a predictive strategy that will allow you to capture those new customers.
2. Product usability testing
Many organizations invest heavily in their website or mobile app up front, but then leave them alone after they’ve gone live. That means their technology and digital experience is static while customer needs and behaviors continue to evolve.
Product usability testing is crucial to ensuring that you are delivering what customers want and how they want it.
In product usability testing, you’ll test your digital experience with representative users so that you can understand why customers act the way they do and learn what you should do to make that experience better.
Most usability testing focuses on evaluating ease, discovering errors and measuring effectiveness.
Contact forms are a good example. If no one is filling out your contact form, is it because what they’ll get in return isn’t enough for them to give up their info? Or is it that the form is too lengthy and/or confusing?
Usability testing can identify those areas of friction to help you eliminate barriers and increase conversions.
The qualitative research already gathered can be extremely useful because you can have users test the changes you plan to make beforehand. That will give you time to adjust and tweak.
3. Digital personalization
Your customers are going to make tough choices when they need to cut back spending — and oftentimes, those decisions stick long after a recession ends.
For example, to reduce supply chain costs, a long-time customer might opt to pick a geographically closer vendor, even though they like you and your product more.
To keep them from going astray, you need to prove your value through personalization.
Personalization is where your quantitative, qualitative and product usability testing data all come together to give you an edge.
For example, your quantitative data tells you that abandonment is high at the buy button. Your product usability testing shows that the issue isn’t with speed or ease of use.
Now, incorporating your qualitative user research, you know that customers start to scrutinize delivery costs to try to save money.
With personalization, you can automatically serve up a reduced delivery fee for your highest-spending, most loyal clients — the ones you can’t afford to lose.
4. Product ideation
Another way to weather a financial storm and grow is to ideate new opportunities for your business.
Ideation doesn’t come easily to many business owners because it’s far simpler to just think about the status quo and the customer needs you’re already serving than it is to think ahead. But, just serving the status quo — and only the status quo — is a recipe for disaster in a recession because your customers will evolve at an even faster rate as they rush to react.
The sea change that retail has experienced is a perfect example. Businesses wasted a lot of time and resources trying to revive their brick and mortar instead of creating new digital experiences.
The data you’ve gathered during those qualitative interviews provides a great source for product ideation.
Why it matters
It’s tempting to believe that once the recession is over, customers will simply come back and all will be right again. Unfortunately, this mindset drives many businesses out of their markets every year, regardless of the economic headwinds that they’re facing.
Recessions challenge the very core of businesses. They should make you ask hard questions about your customers. Consider the value of what you provide them and how that value equation may change.
As you ask those questions, you’ll realize that developing a customer-centric digital strategy is not only important during a recession — it’s now table stakes in every market condition.
How Wipfli can help
The Wipfli digital team is here to keep you moving forward. We can help you uncover your customer needs, unlock new ideas for your business and build the technology that you need to drive your growth.
This article is part of our series on how your financial services organization can use technology to build resilience. We cover the latest technologies and strategies to improve efficiency, engage customers and increase revenue in any economic condition.
Sign up to receive more financial services industry content in your inbox or continue reading from our series:
- Benefits of building resilience in the workplace
- Digital transformation for financial services
- How to keep improving with AI in financial services
- Data and analytics for financial services
- Overcome challenges with CRM in financial services
- Strategies for customer retention in financial services
- Understanding risk and resilience for a better future
