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By: Prannoy Nambiar, Head of Product and Growth at Careerlist
An economic slowdown is a time where previous guardrails are loosened, people are empowered to try new approaches, and businesses have a chance to renew themselves. Effective growth strategies center around product innovation, strategic channel development, and, if the option is available, opportunistic hiring.
Drive Organic Growth through Investment in Product and R&D
****In turbulent times, many companies struggle to figure out where and how to invest. It is important to make sure that all money spent is focused on customer needs, whether those are new or existing customers. Spending on research and development could seem counterintuitive when cash balances are deemed so crucial. However, that is why freeing up resources through a cost transformation mentioned in the first theme becomes so imperative. Those cost-saving and cash-bolstering measures should ideally provide the flexibility to focus on initiatives like product and R&D that will add substantially to sales and profits in the long-term.
<aside> 🔴 Around the time the financial crisis hit, Domino’s Pizza found itself at a crossroads. While it had established a brand around convenience and delivery (one that might thrive in a recession), there was still more value to add to its brand in terms of quality and taste. In 2009, the team announced that they were changing its signature pizza recipe somewhat dramatically, spending millions of dollars on research and a new marketing campaign to raise awareness.
The new pizza was a massive success, and drove up both sales and profits for the company. Profit more than doubled in the fourth quarter of 2009, increasing sales for that quarter by $23.6 million
Domino’s identified a way to capture new market share and improve brand positioning through a complete overhaul of their product and marketing approach. They successfully innovated during a particularly interesting time in macroeconomic terms as well - in the deepest trough of a recession. In a downturn, it is more important than ever to identify ways to innovate on product, whether it’s a pizza recipe or a technology platform, so that market share can be captured en masse.
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Build Depth in New Channels
A downturn is also a time to turn on new channels. Recall previously rejected customer requests that now seem more plausible with new market circumstances. Go back to a previous lead and offer a service they wanted in the first place when you may have not had the availability or willingness to offer at that point in time. These opportunities can help inform completely new product or service lines in the long-term. In the short term, they can bring much-needed cash in the door and develop burgeoning relationships with new customers.
Proof of Work
Proof of work is another leverage point in an unstable economy. It is important for people to feel confident **in what they’re spending on during a downturn. This is a good time to use advocates and references, especially to reach new audiences. For example, CloudFlare found a free marketing channel when the infamous hacker group LulzSec endorsed their security services.
<aside> 💡 Overview: Wix experienced one of the fastest growing global customer bases following the 2008 financial crisis. CEO Avishai Abrahami leveraged his customers to determine how and where to invest in growth. By allowing customers to influence Wix's business strategy, he ensured they would keep coming back for more.
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