Many businesses are facing new challenges in the wake of a looming recession caused by many factors, along with challenges carried over from previous years since the pandemic. As supply and demand shifts, prices of goods and services increase, causing inflation to rise. In response, the Federal Reserve attempts to control inflation through interest rate hikes, which lead to tightened credit conditions.
Five key takeaways from this post to help you learn how to survive a recession:
- Cut costs by streamlining business processes through data integration and automation.
- Improve efficiency and productivity by centralizing data and digitizing processes.
- Manage inventory effectively during a recession through data integration and automation.
- Enhance customer experience and increase profits by leveraging data analytics and personalization.
- Choose the proper data integration technique, such as ETL or CDC, based on business needs and resources.
Economists haven’t reached a consensus on the probability of a recession, but most increasingly expect a recession before the end of the year. Unfortunately, many companies are likely to experience a reduction in sales and profits. In the worst-case scenario, a recession can drive many businesses — especially vulnerable small organizations — into bankruptcy, which is why it’s crucial to know how to survive a recession in business.
What does that look like in practice, though?
Companies need to plan.
Right now, organizations should be implementing drastic cost-saving measures like:
- Cutting out unnecessary and frivolous expenses
- Reigning in the marketing team
- Squashing new campaigns
- Halting product research and development
- Staying on the fence when it comes to new investments
- Laying off any unnecessary positions
Sadly, these measures aren't always enough to keep a recession's wolves away from the door. But the companies most likely to emerge as winners on the other side of the recession are those that, at this very moment, strategically learn to play the game, identify their most valuable players, and smoothly transition from defense to offense without skipping a beat or missing a meeting.
In other words, selectively cutting expenses (making sacrifices) and finding ways to operate more efficiently in the present, keeps everyone focused on the business's future — sacrifice today; build and grow tomorrow.
But an area you should never compromise or sacrifice is your data. The sheer strength your organization possesses within your data — and the responsibility it requires — cannot be sacrificed. Your data is the ace in the hole that no other business has. Put your data to work for you, and learn how to survive a recession in business with a solid data integration solution.
Table of Contents
- Cut Costs by Streamlining Business Processes
- Improve Efficiency and Productivity with Centralized Data
- Manage Inventory Using Automated Processes
- Enhance Customer Experience to Increase Profits
- Choose the Right Data Integration Technique
Unfortunately, companies are still likely to experience reduced revenue, cash flow issues, supply chain disruptions, and increased competition. To survive, many resort to returning inventory to vendors, moving to smaller offices, requiring remote work, and even layoffs. In the worst-case scenario, a recession can drive many — especially the more vulnerable small businesses — to go bankrupt. This is why business leaders need to know how to survive a recession in business.
While companies often take drastic cost-cutting measures like reducing expenses, lowering marketing budget, halting research, holding back on new investments, and laying off personnel, that isn’t always enough. The companies most likely to come out on top when the economy turns around are those that strategically play from defense to offense. In other words, they must selectively cut expenses and find ways to operate more efficiently, with future growth still at the forefront. That’s where data integration and automated business processes come into play.
Cut Costs by Streamlining Business Processes
Cutting costs end up being a significant part of a business strategy when leaders research how to survive a recession in business. Employing cost-saving measures helps you increase sales and profits, but only when done right. You must selectively cut costs without hurting overall sales. According to a report by Nielsen, companies are already underspending on half of their media plans and depressing their ROI by 50%.
If you're still using manual processes, one great way to cut costs is to streamline business processes. Start by integrating and automating all of your company data. Why? Because manual processes are outdated, costly, time-consuming, labor-intensive, inefficient, and a surefire way to fail during a recession. Automation is the best way to stay in the game in today’s digital world.
Data integration is a great way to automate processes, freeing up your staff to focus on more important aspects of their job. Specifically, an enterprise resource planning (ERP) system automates and streamlines many processes, making them more efficient. For example, when you use ERP in your Ecommerce retail business, you no longer have to rely on manual inventory tracking and reordering.
Related Reading: Data Integration for Ecommerce: What Is It and Why Do You Need It?
Improve Efficiency and Productivity with Centralized Data
During economic slowdowns and reduced demand for your products or services, companies frequently rely on layoffs as part of their cost-cutting business strategy. This causes the teams left behind to take on heavier workloads, which can reduce employee morale. Add in the fact that many are still using manual, inefficient processes, so productivity is nowhere near where it could be.
Keeping track of your inventory can be challenging when you rely on different types of data from various sources. Using Excel spreadsheets and email communication isn’t practical anymore when you need to optimize how you conduct business. Not only that, but it gets complex when dealing with growing warehouses, longer supply chains, and substantial amounts of data.
Ecommerce and retailers that understand how to survive a recession in business have learned the importance of digitizing their data. Taking it a step further, integrating data so it's accessible from a centralized location is key. Centralized company data allows you to better manage, track and monitor it, enabling you to make better and more informed decision-making.
Using the Integrate.io low-code/no-code platform, you only need one set of tools and software for any size data team. Automating your data integration and workflows means your team delivers on time and within budget, resulting in greater efficiency and productivity.
Manage Inventory Using Automated Processes
One of the first places to look for ways to recession-proof your business is your inventory. During a recession, it’s essential to avoid spending or buying on credit more than you’re able to sell or handle. Some companies can return inventory to the vendors and focus on quickly selling what they have on hand. No matter what, managing your inventory is key, and the best way to do that is through data integration.
Retail companies and Ecommerce businesses often have a time managing their inventory when the going gets rough. You have an even bigger issue if you have vast warehouses or multiple warehouses in different locations. A common problem in warehousing comes down to data silos. Data silos must be addressed when considering how to survive a recession in business.
Data silos are repositories that are separate and controlled by different departments. The data has no way of being accessed throughout the organization. Data pipelines connect these systems or databases and help automate the collecting, storing, and analyzing of company data. That way, you can source raw data from multiple sources and transform it into usable information. For instance, you can track real-time product levels to avoid stock-outs and lost sales, as well as optimize processes based on what's selling the most.
Integrate.io allows you to unsilo your data from anywhere and consolidate it into a single centralized location. The data integration process is automated, making it easy to access and analyze your data. In turn, your team expends less time and effort and can focus on driving business decisions and taking action.
Related Reading: How Data Pipelines Help Data Science Teams
Enhance Customer Experience to Increase Profits
When you're looking to increase sales and profits, there are several ways to do so. You can expand your offerings and develop partnerships with other small businesses. Enhancing your customer's experience is essential even whether or not you choose to expand. Improving customer experience requires you to know your customer inside and out, though. After all, how can you cater to their needs if you don't know what they are?
Some approaches you can take to enhance customer service include:
- Personalize interactive content (e.g., ads or product recommendations)
- Target customers based on their behavior (e.g., address issues or appeal to their emotions)
- Attract potential customers with similar traits as your best customers (e.g., create personas of the ideal customer)
- Determine areas where customers aren't happy and fix them (e.g., slow-loading website or inefficient customer support staff)
- Predict trends to meet customers' future demand (e.g., inventory control)
No matter what you do to recession-proof your business, one thing can't be expressed enough. Data is a valuable source of information about your customer base, including existing customers, new customers, and potential customers. It would be best if you used metrics to track customer insights, such as Customer Lifetime Value (CLV), Customer Acquisition Costs (CAC), Customer Retention Rate (CRR), Click-Through Rate, Product Impressions/Reach/Engagement, Bounce Rate, etc.
Data analytics helps you determine and measure consumer buying behavior trends to personalize customer experiences and improve marketing. Doing so is essential when it comes to customer retention. The only way to do that effectively is by centralizing company data from all of its data stores in a data warehouse. That way, you can connect to a business intelligence (BI) tool. Using these tools, you can integrate your marketing and sales data to find the best-performing marketing channels. This gives you a competitive edge.
Integrate.io's 360 Customer View helps businesses increase engagement, reduce churn, and improve customer experiences. It also ensures that your data is accurate, complete, and secure.
Related Reading: Revolutionize Media & Entertainment Data Management
Choose the Right Data Integration Technique
The majority of businesses are making the move towards digitizing their data. If you’ve been looking to join the digital transformation bandwagon — 78% of companies have centralized their data — you’ve probably come to realize that it’s no easy task. Yet, it's one solution for how to survive a recession in business.
First, you'll need to figure out which data integration technique you need for your business. Unfortunately, there’s no-one-size-fits all solution, so you must choose wisely to avoid the costly mistake of implementing the wrong one. Consider the following techniques based on your amount of data, the number of systems storing the data, and the insights you want to generate:
- Extract, Transform, Load (ETL) – ETL is designed to move data from various sources to a centralized data warehouse repository and then be pushed through BI tools. It's the oldest and most popular technique, so it's supported by many resources. It's a great start for E-commerce businesses needing to analyze small, structured data sets.
- Extract, Load, Transform (ELT) – This technique also removes data silos, but data engineers prepare the data for analysis after it's moved to the centralized location rather than before. ETL can handle large structured and unstructured data sets in data lakes, which may be more suitable for some retailers.
- Reverse ETL – Reverse ETL involves the same stages, except it moves data from a repository to third-party analytics tools, which improves operational efficiency. For instance, sales teams might want to access customer data from their CRM (e.g., Salesforce) rather than a BI tool (e.g., Microsoft BI) or both.
- Change Data Capture (CDC) – CDC is designed to monitor database events. Compared to the other techniques, CDC syncs small amounts of data instantaneously. Small E-commerce businesses, for example, can analyze marketing campaign data in near real-time.
Second, taking the traditional route means you need data engineers to build complex data pipelines. The tedious process of coding the pipeline is required to make ETL and Reverse ETL or ELT and CDC work. This can take weeks if you have a lot of data. Suppose you’re a small business with a small data team. In that case, you probably can’t afford the hundreds of thousands of dollars needed per year to hire a data engineer, let alone to employ several if necessary to get the job done. Integrate.io simplifies and streamlines ETL, ELT, Reverse ETL, and CDC with no-code/low-code connectors and a drag-and-drop interface.
Related Reading: How To Choose the Right Data Integration Strategy for Your Use Case
How To Survive a Recession in Business With Integrate.io.
Smaller businesses without the scale of large corporations are much more vulnerable to economic downturns. Large companies have much more leeway, but they’re not immune to the effects of a recession, either.
Data integration lets you automate and streamline your business processes, from warehousing to marketing. It can help your teams optimize inventory and prevent sales losses, as well as leverage various revenue streams to generate leads and close more sales. Overall, integrated systems and data make it easier for you to track expenses and manage your finances.
Integrate.io gives you cost-effective options to integrate your company data without overpaying or going further into debt during the worst of times. Our low-code/no-code cloud-based ETL (Extract, Transform, Load) solution gives you simple visualized data pipelines for automated data flows across many sources and destinations.
Try it out for yourself by taking advantage of our 14-day ETL Free Trial. Alternatively, schedule an ETL Trial Setup Meeting with one of our experts, and our team will help you get the most value from your trial.