In 2021, the Big Five technology giants – Apple, Amazon, Google (Alphabet), Meta and Microsoft – have generated a combined revenue of $ 1.4 trillion. But as they say, “what’s going to fall must fall,” which is precisely what many analysts believe has happened, with the recent market crash. The fear spreads so fast that we may be about to enter an era as bad as the dot-com explosion.
How bad it will really be, no one knows. But if one thing is for sure, companies that put plans in place to weather the storm will certainly do better than those that don’t.
In fact, in the wake of the financial crisis of 2008, 14% of state-owned enterprises were able to reach a period of sustained growth, largely due to early implementation of a long-term approach. go, and concentration of growth and not. only damage limitation. With that in mind, we created this article with four quick tips that discuss how technology companies can prepare for the unknown and give themselves the best chance of making it out the other side without harm.
Focus on product-led growth
With rising customer acquisition costs and a global recession on the horizon, it may be worth contemplating a shift to product-driven growth (PLG), a new market approach that emphasizes the product as a whole. and the key driver for acquiring, activating, and retaining consumers. To see also : The abortion ruling pushes companies to tackle divisive politics. Instead of spending money on advertising or sales pitches, the product acts as the company’s marketing engine.
Most PLG models give priority to end users who will be able to gain easy access to the software, so they can interact with it and test for themselves. The goal behind this approach is to create an environment where the prospect can discover the value of the product in a situation relevant to their particular desires and needs. In addition, prospects are significantly more likely to make the purchase and convert from a boss to a paying customer after experiencing the value personally.
Fortunately, PLG is easy to reach with experienced SaaS sales solutions like Walnut, which specializes in facilitating demos of high-quality products that are engineered to convert from the ground up. Walnut’s primary goal is to provide the most conceivable customer-centric experience by providing sales representatives with all the tools and skills they need to appeal directly to the specific desires, needs and pain points of every perspective.
Walnut does this with its simple and intuitive code-free software, which eliminates the need for back-end teams such as graphic design and IT departments to be engaged in demo production. This gives teams presenting demos complete control and creates an atmosphere in which prospects can interact freely with your products in a way that is directly relevant to their needs, thus facilitating a product-driven growth strategy.
Drop unprofitable products/services
During a market crash, money is tight. Typically, this results in consumers and businesses looking for ways to reduce costs, and technology companies should not be different. However, it is more prudent to take advantage of a recession by eliminating any excessive weight that your company has carried rather than cutting back on critical business operations.
For example, if your organization has several MVP dream plans that have drained your cash reserves, it would be prudent to postpone them until a later date. This may interest you : The latest high-tech industry: real estate. Remember that a recession is a good time to focus resources on what is already working for the organization, not experimenting in vain.
Reduce customer churn
As customers ’budgets tighten, subscriptions can be one of the first things they decide to cut. To overcome this problem, SaaS vendors can provide customers with incentives or discounts to help with the storm. To see also : ‘Parallel Reality’ at the airport: High-tech screen uses facial recognition to create flight experience.. Take Salesforce, for example, which released a new business concession scheme in 2020 designed to help SMEs survive the early stages of the global pandemic.
While you don’t have to go that far, things like changing pricing / subscription plans, providing free trials on paid features, or introducing live technical support can help convince customers to continue with their solutions. SaaS existed until economic normalization. The goal of the game is to provide the most value to customers in order to gain their loyalty and reduce churn.
Don’t kill off your marketing
Whatever strategy you use, it’s critical that you resist the urgency of stopping your marketing activities when approaching an economic slump (which seems to be what most companies like to do). For one reason or another, many organizations mistakenly see marketing as a cost center rather than a profit center, especially when it comes to B2B companies.
Unfortunately, organizations that reduce marketing costs and cut content creation quickly learn that the benefits earned by their marketing team in previous quarters are nullified when they are left or defunded. After all, search rankings deteriorate rapidly, bidding strategies become ineffective, and algorithms change. While these companies may be more isolated from the short-term effects of the recession, they are likely to suffer in the medium to long term and may find it difficult to regain the momentum they once had.
On the contrary, technology companies can use poor economic conditions to their advantage to make smarter marketing decisions. Instead of cutting back, managers should see the recession as an opportunity to exploit a less competitive environment by increasing marketing spending. In turn, this could create a competitive advantage over rivals, who could be scaling back and adopting a shorter-term approach.
Final word
Technology companies will use this time to prepare for the downturn by implementing strategies to protect themselves from what is to come. Although, as we have touched on, economic recessions often present an unlikely opportunity for businesses to grow. Rather than sitting and playing defensively, the market crash can actually be a time that technology companies can use to take a larger market share by increasing marketing efforts, simplifying their product offerings, and focusing on to provide maximum value to its current user base.
