Global economy is cyclical. If we take a look at the basics of economic science, we will see that economic expansions always give way to recessions, recessions turn into crises, crises are followed by recovery, recovery leads to expansions, and so on, around the circle. And even though experts can give a fairly accurate economic forecast to let us more or less prepare for downturns, sometimes setbacks seem to appear out of the blue, threatening the future of our businesses and calling for immediate actions.
Needless to say, the stronger your business is, the less likely it is to be affected by risks. However, if you are a new market entrant, especially in the highly competitive financial services industry, any unexpected turmoil can become the beginning of the end.
Nevertheless, history remembers numerous cases when businesses not only survived recessions, but managed to hit the market with incredible breakthroughs. Furthermore, experts are sure that with the right strategies any economic turbulence can be leveraged to gain an advantage to propel or at least maintain performance. So, let’s consider some best practices.
1. Widen industry recognition and promote your brand
In fact, when an economic slowdown strikes, many businesses quickly start cutting down all expenses to keep up. But recession does not necessarily mean reduction, especially when it comes to promoting products and services. Conversely, it is vital to continue marketing during an economic slowdown, and experienced players know how effective marketing and advertising campaigns can be to boost sales.
On this basis, an economic downturn can be the right time to come out on top. While the majority of your competitors will be reducing their marketing and advertising costs, you can reposition your brand, raise awareness, introduce new products, or launch new services.
By the way, the popular saying goes: “When times are good you should advertise. When times are bad you must advertise.”
2. Develop innovative solutions
The COVID-19 outbreak pressed the brakes for many businesses, but at the same time, it sped up the adoption of online services and digital banking at a pace we have never seen before. As a result, the financial market witnessed an explosion of new-age, convenient, and user-friendly applications that could meet all customers’ needs.
Since then, technologies have been evolving by leaps and bounds, enabling any market player to leverage them in their offerings to quickly and easily adapt to changing market conditions and stay ahead of countless competitors.
However, as part of this strategy you should carefully monitor what technology is worth incorporating into your inventory to increase efficiency, stay up-to-date, and make your business more attractive.
3. Manage your staff
When experiencing hard times, good employees are the most valuable resource. In this regard, it is crucial to bring together talents, who will do their best to help the company grow and thrive.
However, during an economic downturn, this may require significant effort to streamline all your staffing arrangements. If needed, try to find flexible solutions that suit all parties. If you realize that you need to let some staff go to save the budget, make sure you have someone who you can delegate responsibilities to.
Also, you may consider training your employees to carry out more tasks. You can take a staff skills assessment to identify the type of training your team may need.
4. Make customers a top priority
What is the secret to the incredible success of fintech companies? The short answer is an unforgettable customer experience implying providing customers with what they want and when they want it. If your business provides quality customer service, you are likely to retain your existing customers and have a greater chance of increasing your client base.
Bear in mind that making customers a top priority in an economic downturn may also involve:
- Launching customer incentive programs
- Modifying products and services to meet customer’s current needs
- Expanding the product line of your business to avoid the loss of customers.
Finally, make sure to provide good after-sales services, which is particularly important to leave your existing customers 100% happy.
5. Move into adjacencies
In order to better compete and gain additional market share even during the hard times, mature industry participants never neglect expanding into adjacencies to drive more customer value, find mutual profit, and share valuable insights.
In this regard, new collaborations during an economic downturn will undoubtedly become a bridge to new opportunities, customers, suppliers, and business partners with minimal cost to your business. Consider cooperating with other businesses, for example, by offering complimentary services or discounts.
Also, do not neglect to find out what support services (accounting, consulting) your partners can provide you with to help you survive an economic slowdown.
The bottom line
Since our life continues to create uncertainty about the future, many fintechs, especially those that have recently got on board, may experience a number of challenges from all sides and fronts. But, while the broader economy will make another circle from response to recovery, fintechs may use this slowdown in their favor to seize lots of opportunities and successfully grow and scale their business.
Moreover, the economic downturn can become a trump card to outperform competitors, introduce new offerings, and expand customer portfolios. A key point here is not to be afraid of thinking big and acting boldly.