Trying to make sense of an uncertain future and what it means for your business? Join the club. The IMF have suggested that policymakers need a steady hand, but so do the rest of us. Asif Rizvi, CommVersion CEO, opens up about weathering the storm by focusing on three words – return on investment.
With the global economy facing steep challenges thanks to high inflation pressures, the cost of living crisis, and Russia’s invasion of Ukraine following a post-covid world, the current stretch on people’s purses suggest 2023 will look like a recession for most. Many of the same questions that were asked in 2008 will be starting to chip away for those of us in charge of budgets and outgoings.
Now is the pivotal moment of deciding whether to stick or twist. Whether the decisions you ponder are about outlays, personnel or scaling back targets, it’s one of the most challenging business decisions many will make.
What have successful companies been telling us over the last couple of years?
We’ve spoken to many of our new customers – from a cross-section of industries – and the theme has remained the same for those achieving incredible increases in lead generation on their website with SmartChat. They’ve focused their efforts – be that tools, projects or new hires – on what will bring them the strongest, and most consistent, return on investment.
Instead of cutting back their marketing budgets, they’ve focused on their goals, how they intend to achieve them, and what support they need to ensure they can still achieve those targets. When reviewing a marketing campaign or solution, they ask “does it get us where we need to be?”
Measuring the ROI becomes a simple way to know where best to focus efforts during difficult periods.
How to measure return on investment?
Before any serious investment should be made, the return (or profitability) should be calculated to determine its consideration. The calculation isn’t difficult.
Refocusing on what works
The reality of the financial pressures experienced during an economic downturn, however, are incredibly stressful and reducing marketing spend can seem like the most obvious choice. Here is where we could advise caution, refer back to your long-term strategy and focus on your core objectives and what tactics will deliver the highest ROI.
Instead, follow this 3-step process to keep calm during challenging times.
1. Analyse your strategy and targets
It’s a necessary time to have your strategy at the front of your mind, aware of exactly what your company goals are and how you initially intended to set out and achieve them. This will be team-specific and company-wide, but it’s important to know what the vision was and see where your ship is intended to head.
2. Stay true to your values
Values can evolve, but at their essence, they are why you and your team get up each day. When times are tough, and potentially hard decisions are on the horizon, it’s important to be grounded in values that should underpin whatever decisions need to be made.
One of our values is to be Thoughtfully Innovative.
This means to always improve what we do, and to do this thoughtfully, means there are reasons behind our decision-making. We don’t just charge in, but we always consider new ways of doing things, and during a recession, this is still just as important.
3. Invest in growth tactics that work
This is a critical decision-making period for any business, but the right business investments now can pay off dividends for your future. If an investment can directly impact growth, then downturn or not, have the confidence to continue on, as you’ll be supporting your long-term goals.
It also pays to invest in solutions or partners who value your success. Consider how customer centric their business model is, from the onboarding process all the way to the payment model they use.
It’s a tough climate, but we firmly believe these three steps are vital in gaining confidence in the decisions made to ensure business stability and dear we say, growth. As our experience and countless examples throughout history show, now is the time to refocus on your business objectives, understand and measure which tactics are helping to achieve these, and don’t shy away from investing in what works.
Don’t believe us? Here are three examples to consider.
In the 1990-91 downturn, McDonald’s famously stripped back their marketing spend as the economy dipped. Conversely, other famous fast food brands instead reacted innovatively. Taco Bell introduced its value menu and increased profits by 40%. Meanwhile, Pizza Hut focused on innovation, including the launch of the stuffed crust and saw 61% sales increase. McDonald’s, though, reported a 28% dip in sales the following year.
When a recession struck in the early 1970s that sparked widespread global tensions, Toyota strongly considered cutting its marketing spending as the market began to bite. Looking at their longer-term goals, however, they instead agreed to focus on these same goals throughout the lean years, seeing them overtake Volkswagen as the top US imported car manufacturer within a year of the recession’s end.
Kellogg’s Rice Krispies
One of the most famous cases of success during a recession, Kellogg’s was an upcoming but not renowned brand, unlike the market leader at the time, Post, before the 1929 recession hit. Instead of scaling back, as Post did during the unsettling period, Kellogg’s decided to launch a new cereal – Rice Krispies – and doubled down on a new advertising medium, radio. The brand awareness of Post cereals and Rice Krispies tells enough of a story as to how that succeeded for them.
There a very real merits, and payoffs, to bold yet calculated decision-making during tough times.
Now is the perfect time to explore tactics, tools and partners that will help secure your bottom line and demonstrate real ROI. We are doing this for our customers through our SmartChat solution, unlocking missed lead and increasing qualified lead generation from existing website traffic without needing to increase marketing spend.
Get in touch with our sales team and book a demo to see how SmartChat can significantly increase your lead generation.