In a recession, look to drive growth through customer retention • TechCrunch
The global economy is on the brink of recession, forcing many organizations to retreat, either by slowing investment or drastically cutting costs. Reducing expenses can be an effective hedge against inflation and slowing sales, but how can founders proactively drive growth during a recession?
Over the past few decades, many tech companies have managed to weather economic downturns, and even grow, by reorienting their assets and focusing their efforts on creating customer value and retention. New business is essential for growth, but there is no guarantee that a first customer will become a lifelong customer. In times of economic uncertainty, businesses cannot rely solely on new customers, if at all.
A more reliable growth strategy is to manage existing customers and expand the products and services they use over time. Profitable, mature businesses with a large, active customer base are better equipped to weather downturns, especially if more than 75% of their revenue comes from existing customers.
Here are some ways a business can focus on a retention growth strategy that puts customer experience first:
Account management isn’t just about cross-selling or up-selling, it’s also about putting customers’ long-term goals ahead of the company’s short-term interests.
Centralize first-party data
Customer data is first-party, and businesses have access to critical information about the products their customers are already using, their industry, location, relevant spokespersons and decision makers, and more. Unlike third-party consumer data, which can be misused or misinformed, first-party data is exchanged in good faith.
In other words, first-party information assumes an existing positive relationship between a company and its customers, and those customers rightly assume that their information will be leveraged to support all future interactions and advice from their supplier. If a company knows all the products and suppliers a customer uses, it can position itself in several ways to save the customer money and bring more value to the table.
The challenge is that client files rarely contain this type of information. Depending on the size of an organization, first-party data is likely stored across multiple departments and systems, including marketing, customer advocacy, sales, and support.
