While the natural reaction for many companies in challenging times is to become inwardly focused and concentrate on conserving capital, history has shown that it is in these critical times that organisations have a significant opportunity to outflank their competition. In fact, a study conducted by Bain and Company found that during the last recession more than a fifth of the companies in the bottom quartile jumped to the top quartile in their industry and more than a fifth of “leadership companies” fell to the bottom quartile (Bain and Company 2008).
Forward-looking companies maintain their unwavering focus on investing in and optimizing existing assets through both good and bad times, coupled with a concerted effort to exploit operational efficiencies. A study by the McGraw-Hill Laboratory shows that companies who continued strategic spending during a recession outperformed non-spenders and experienced revenue growth of 275 percent during the first full year of recovery (McGraw-Hill).
The key asset that lies at the center of every business is customers. It is by protecting and investing in this single most important asset that companies can establish the foundation for a sustainable business. In fact, improving customer loyalty and experience are listed in Forrester’s Trends 2009 report as the top two concerns of business executives (Band, Leaver, and Magarie 2008). In the Marketing Executives Networking Group survey, customer satisfaction and retention were noted as the top executive priorities for 2009, both rising in importance from 2008 (Tsai 2009).
These trends are likely to continue—and even intensify—as businesses increase their focus on existing customers.