Some of today’s biggest brands, such as Instagram, Uber, Venmo, Slack, and Groupon, all have one surprising common factor: They were products of the Great Recession, launched between 2008 and 2010. As economists warn of another possible global economic meltdown and stagflation, smart businesses and channel partners know what few others know: Recessions are opportunities, not catastrophes.
Before feeding on the current diet of doom and gloom, companies need to take a page from the playbooks of some of the world’s most successful startups, each of which now earns billions in revenue.
Facing Down Fears
Current headlines read like the script of a post-apocalyptic thriller: worst inflation in 40 years, climbing interest rates, a disastrous war in Europe, and the stock market entering bear market territory. This all creates considerable challenges for businesses. If the financial prognosticators are correct, the rest of 2022 and 2023 may be brutal. The majority (81%) of U.S. adults believe we’re heading for another recession in 2022, and some experts are predicting a scenario comparable to the dot-com crash of the early 2000s.
To survive such volatility and avoid falling into a market slump, business and channel leaders must be willing to take risks and bolster their networks.
Do What No One Else Is Willing to Do
In times of contraction, companies tend to mirror or posture the bad effects of the economy. Organizations immediately start to cut overhead, resort to layoffs, pull back on marketing, and stop innovating.
But this is the wrong approach. Channel companies can take some very clear paths to ensure they keep the edge in a difficult market. For example, a recession is a great time to invest in employees and partners. While others are buckling down and avoiding “incidental” expenses, companies can recession-proof sales and marketing teams by giving them access to the latest training, techniques, and best practices.
Another method that most companies miss is innovation. Companies that can spin up new solutions to old problems place themselves well ahead of the pack. In 2011, Brian Resnick wrote in The Atlantic, “Economic hardship has not, it turns out, kept U.S. entrepreneurs from thinking, innovating, or taking risks on new businesses. During the toughest months of the financial downturn, start-up activity actually surged.”
Businesses also must grasp the concept that employees need to be preserved, not eliminated. Bolstering existing teams and directing them toward innovation projects will set companies far apart from their competition. Hiring and training are expensive as well, so the assumption that a company can just bounce back after a recession and associated layoffs is incorrect.
Bolster Your Channel Connections
Channel partners should identify their key stakeholders and understand what they’re facing over the coming months. There’s no better time than a recession to solidify and nurture those relationships. Here are some tips and tricks to ensure you stay focused, energized, and engaged without getting sucked into the recession vortex:
1. Reinvest in Yourself
Contractions are times to double down on upskilling and personal growth. Perhaps you hone in on soft skills and invest in learning to conduct webinars, increasing networking, and creating social posts. When everyone else is cutting back to save expenses, you must also increase your sales and marketing activity. This is your competitive advantage.
2. Reset and Realign Your Partner Strategies
Keeping partnerships alive is key to staying agile and innovative even when times get tough. It’s important to align with your partner leadership team about any shifts in their company goals during an economic downturn. Channel partners should continually strive to reach new audiences and markets, especially during contractions—rather than in spite of them.
3. Keep Critical Relationships Alive
If you’re a channel partner, then you’re in the people business. Bolster key relationships and contacts. Remember who brought you revenue over the last year? Find and connect with them, and, if they had a job change, stay in touch. Set up a follow-up meeting, and either grab coffee or take them to lunch. Determine who has relationships with your customers and prospects. This is your key to survival.
Succeeding in an economic downturn begins with the right mindset, fueled by a “can-do” attitude and willingness to do what others are not. Channel partners are able to advance this strategy exponentially—almost like adding fuel to the fire. For example, no one had ever heard of Google in 1999, but by leveraging better known channel partners in AOL and Yahoo, the company went on to take over the world of Internet searching. So, how are you planning ahead for the next 18 months of global economic difficulty? Is your organization expanding or contracting, moving full-steam ahead or pulling back?
Remember, recessions are golden opportunities waiting to happen.