The 2020 Mid-Year Economic Update_long

Commentary: Be the Right Answer for Your Customers

There's an old joke about a headache going away because you stopped hitting your head with a hammer. That's one way to view the few pieces of good economic news trickling out over the past four weeks. Most analysts are getting excited because certain economic indicators are not falling as fast as they were.
 
Whether we have hit bottom is still wild speculation. The important thing is that these signs of hope are necessary precursors to a recovery. We have to wait to see if they are real. It's encouraging that the first wave of good and less-bad news at the end of March has been more or less sustained into mid-April. Even the steel industry and the deep pit it has been in has started to look better. And this week's market and positive earnings reports ...

There’s an old joke about a headache going away because you stopped hitting your head with a hammer. That’s one way to view the few pieces of good economic news trickling out over the past four weeks. Most analysts are getting excited because certain economic indicators are not falling as fast as they were.
 
Whether we have hit bottom is still wild speculation. The important thing is that these signs of hope are necessary precursors to a recovery. We have to wait to see if they are real. It’s encouraging that the first wave of good and less-bad news at the end of March has been more or less sustained into mid-April. Even the steel industry and the deep pit it has been in has started to look better. And this week’s market and positive earnings reports from banks, of all places, continue to at least offer a glimpse of a rebound. That’s how recoveries are born.
 
One economist sound bite has resonated for me in particular: If you think you know this economy, then you don’t know this economy. It is refreshing to hear an economist admit defeat. But it is also another way of saying what is on all our minds – the current conditions are unprecedented, and let’s hope the “new economy” has the same capacity to rebound as quickly as it tanked. This leads to a much more practical exercise, one you have some control over. Now is the time to figure out how to make all this instability work in your favor.
 
From our conversations, distributors are experiencing an unprecedented level of uncertainty from one month to the next. Historic sales patterns aren’t reliable; sales performance is all over the map. Long-held customer accounts are revisiting supply relationships (not good for incumbent), but new opportunities are emerging for the same reason (good for the outsider).
 
This round of vendor musical chairs – when customers are open to new sourcing options – is part of the cycle. How (and if) you are adequately prepared to react is a topic for sales planning and customer retention strategy. It means that customers are through panic mode and into finding answers – innovative or not – on how to cut more cost or be more productive and efficient. If you aren’t helping to frame what that looks like, your competitors are. Now is the time to be proactive in preserving your best customer relationships, and aggressively pursuing new and old opportunities.
 
Many companies don’t go knocking on the doors that haven’t been open in a while. Review the “inactive” customer file, prioritize it, and find the best way to get inside again, whether by personal contact or otherwise.
 
 
 

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