Retaining Customers During a Tough Economy in 2023 & 2024
Author: Shane James
As a customer success leader, you must recognize that a down economy may significantly impact your customers'
companies and, as a result, their capacity to pay for vendors' products and services. This effect will be seen most acutely in 2023 and maybe into 2024. Let's face it: during the COVID period, IT organizations were over-hired, with growth aspirations fed by work-from
-home and entertain-at-home models. Few people expected the shift that would occur. In addition, many industries are experiencing inflation and a slowing economy at a time when artificial intelligence is changing the landscape faster than ever before. Yet, despite all of the employment losses in the IT industry, it is still approximately the same size as before COVID.
What does this entail for your customer relationship as an IT provider or supplier? First and foremost, merchants must be more vigilant and inventive than ever before. Don't expect the customer's status quo from last year to continue this year. Most businesses are experiencing the economy's effects in one way or another. Key performance indicators (KPI), objectives, and key results (OKR) are frequently heard. Of course, they are necessary, but they have always been essential for most businesses, not just now. Of course, they are necessary, but they have always been essential for most businesses, not just now.
After many years of reviewing economic ups and downs with consumers (2000, 2008, and 2022), it has become evident that most suppliers do not understand what it takes to maintain a customer during difficult times. It all boils down to "desired outcomes," which must be further broken down. I'm not talking about your company's or your desired outcomes; I'm talking about your customer's desired outcomes.
Within many businesses, the desired outcome varies significantly from person to person. For example, I met with a customer and one of our Customer Success Managers (CSM). While listening to the conversation between the CSM and the client, it became clear that the desired goals of the individual with whom we spent our time building a relationship were not aligned with the desired outcomes of the buyer. Although it is critical to cultivating connections at all levels, the CSM had overlooked the buyer, who was in the room with us and had no knowledge of our company's efforts to keep things operating smoothly. While listening to this, the buyer, Mary, the company's CIO, seemed uninterested in all the excellent work we discussed during the meeting. She excused herself within the first 15 minutes, stating that she had another obligation. The conversation lasted for another 60 minutes, and we left away knowing little more about our customer than we had before the meeting. We made a mistake wit
h that consumer because we didn't take the time to grasp her goals and how they differed from the person we were working with. Mary now felt our offering was unnecessary because no one understood her goals. Before meeting a customer, I always urged them to know who would be there and comprehend the buyer's and leadership's intended results.
CIOs and other buyers are evaluating vendors more critically than ever in today's market. This shift is related to more than just economics; CEOs may focus on acquisitions that are transformative to the business or help simplify costs. As these selections are made, each vendor must confront these difficult questions such as:
1. Do you understand the buyer's or owner's desired outcomes for your offering? Do you understand the goals of the IT department that oversees your product? Do you know what you want your product's users to do? Understanding the customer's desired outcomes at all levels is a rule of thumb. If you don't, you won't be able to serve each person individually, and your giving will never be sticky enough during hard times.
2. Do you understand the desired outcome of your customer's leadership? In most circumstances, their expected benefits will not correspond with a specific product; therefore, aligning your offering to their desired outcomes may not always be evident. Leadership sees technology as an enabler to their company and nothing more.
3. Are you matching your approach with their desired outcomes, even if you know what they want? It is simple to claim that you understand someone's targeted outcomes. However, most individuals are mistaken in their assumptions. When questioned, many consumers are unable to express their desir
ed outcomes directly. To obtain this knowledge, the CSM, technical account manager, sales engineer, and account executive must collaborate by listening carefully and asking probing questions. Deciphering a desired outcome may need multiple interactions and exceptional listening abilities.
4. Have you confirmed that the original desired results are still being reached, and have you validated if different intended outcomes have been identified? Again, remember that expected outcomes might vary due to company initiatives, new leadership, mergers, and other factors. As a result, you should confirm targeted results with individual contributors every month and with management at least once every three months.
5. Do you bring anything valuable to every meeting? Everything you do should be related to someone's desired outcomes in some way. Even more crucially, starting with your product's users or managers and working your way up to the economic buyer and leadership, all personnel's desired results should map to the financial buyer's and company's desired outcomes. If they don't, your chances of losing a customer increase considerably.
During an economic downturn, desired outcomes are not the only thing to be concerned about. It is, however, frequently missed, or little time is spent comprehending and mapping to the customer's desired outcomes.
Take action to accomplish this by doing things like:
1. Take the initiative: Schedule frequent meetings with your offering's buyers, consumers, and managers.
2. Communicate clearly and truthfully: Keep your consumers informed of any changes or issues businesses like theirs encounter and provide new solutions to those challenges.
3. Listen and ask impactful questions: Listening is critical to understanding anyone's desired outcomes. So, instead of just h
earing them, listen to what they're saying and ask impact questions that will lead you to their desired outcomes.
These actions can help you develop customer trust and loyalty even in a bad economy. You'll be closer to a customer advocate who regards your service as mission-critical if you understand what they want. It is difficult for another provider to offset your solution once it is recognized as a mission-critical product. In most situations, features or missing features will not be the primary reason a customer becomes a churned customer. Concentrate your time and energy on what is essential and disregard the noise that wastes so much time.