The Digital Pivot: Pragmatic & Progressive Measures to Fight the Recession
Estimated Reading Time: 5 minutes
An unfortunate reality that goes without question is that the economy will always rise and fall. The inevitable ebbs and flows of commerce, now more than ever, seem like the natural order of things; what goes up, must eventually come down. Like any recession, depression, or disaster, what matters most is not how we’re affected, but how we adjust to the situation to thrive. This principle applies no differently to the digital landscape of B2B enterprises.
In today’s volatile, post-pandemic economy, a crucial part of being adaptable is being able to think ahead of the catastrophe and take the strategic actions necessary to mitigate risk. If we start to see layoffs, budget cuts, and loss of pipeline and market share as an early warning sign, we must start thinking now about how to contain and control the fire. What’s more, we need to be able to assess what damage has already been done while preparing to rebuild in tandem.
This presents us with a burning question: how can we get ahead during a recession and, instead of preparing for potentially high-stake losses, turn it into an opportunity to gain market share and competitive advantage? And, most importantly, how are you staying relevant? Is being a digital leader the solution?
What is a Digital Leader?
Digital transformation is the adoption of digital technology to improve efficiency, value, and innovation. A lot of people mistakenly think that digitizing is the same as digitally transforming. It is not! Digital transformation is about implementing a change in the overall process. A digital leader is somebody who actively implements digital strategies – often despite short-term upset – that will show long-term ROI. These sales and marketing strategies will include investments on the digital front:
- How you become more effective
- How you become more efficient
- How you differentiate yourself
- How you grow revenue
- How you engage with customers
Digital leaders can cut costs without losing momentum or crucial operational resources. While there is an inherent fear of financial accountability because of reactive risk-taking, planning ahead proactively when given the opportunity allows for a more measured and calculating approach. Companies, like DXC Technology, are able to shorten sales cycles, reduce costs, and increase customer engagement through digital transformation.
“What we were trying to do was make a level of knowledge and expertise that has been previously limited to a few subject matter experts, broadly accessible to salespeople who, although knowledgeable, were not necessarily knowledgeable to a high level of detail about our offerings. There were only a small number of experts in the world who could really talk about these things in detail, and, yet, we could go and make their knowledge broadly available to our salespeople in a way that didn’t require us shipping an expert to various locations around the world.”— George Ferguson, Go-to-Market Lead, DXC Technology
How CMO’s Can Emerge Stronger During the Next Recession
Analysts like McKinsey have deemed that digital leaders are three times more likely to achieve above-industry revenue and margin growth during a recession. But how, during a recession, do you pivot to achieve these necessary accelerations that allow you not just to survive but thrive? The common thread between digital leaders is resilience.
The companies that are resilient know how to operate on both the offensive and defensive front. A pragmatic and resilient leader recognizes that costs must be cut in some areas, while growth spending is paramount in others. The ability to reduce excess costs, while allocating resources, maintaining talent, and securing infrastructure give these companies the edge they need to grow revenue and continually turn a profit from quarter to quarter. Most importantly, these companies understand the importance of a digital footprint.
“The CEOs of pragmatic companies recognize that cost cutting is necessary to survive a recession, that investment is equally essential to spur growth, and that they must manage both at the same time if their companies are to emerge as post recession leaders.”— “Roaring out of Recession” by Harvard Business Review
Digital Investments = Opportunity
In 2022, digital investments were focused primarily on customer engagement due to the COVID-19 pandemic shifting how and when customers wanted to interact with sales teams. What may seem like a lofty investment on the front end, has proven to be a worthwhile endeavor for customer satisfaction and sales enablement.
The Digital Pivot – Change is Hard
While increasing spend on digital investments and marketing to fuel a growth strategy may seem counterintuitive when all signs are pointing towards cutting spending, it’s the long-term play that will set your company apart from those who won’t make it out of the recession. Does closing one door necessarily mean not opening another? Loss and growth are not binary. Rather than cutting or growing dramatically in either direction, it’s time to think about how to restructure your marketing strategies through digital investments.
Preparing now enables companies to gain market share and accelerate. Winners pulled away from losers during the last recession and widened the profit and market-cap gap during the subsequent expansion, Bain’s analysis of nearly 3,900 companies worldwide shows.
If you don’t look up, you better look out! How you digitally adapt and change makes all the difference to your success following a recession. Are you ready to be resilient and pragmatic, and grow through the recession?
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Smart marketing leaders know digital transformation is an ongoing process vital to surviving recessions. Learn how they’re using technology to meet evolving buyer demands.