3 Ways Leaders Can Use Data to Grow in Shrinking Economies Business leaders need to find a way to make sense of this dynamic environment and use it to their advantage — and they can do so with data. Here's how.
By Elizabeth Cholawsky Edited by Kara McIntyre
Opinions expressed by Entrepreneur contributors are their own.
According to the International Monetary Fund, advanced economies will see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.3% in 2023. Tech leaders are facing economic headwinds, yet encounter continuous pressure to maintain aggressive revenue growth in an increasingly competitive global landscape, which begs the question: How do I shift from a strategy of growth at all costs to efficient, sustainable growth?
Leaders need to find a way to make sense of this dynamic environment and use it to their advantage. But the growth tactics that worked yesterday will not get us through these unprecedented times.
Related: How (and Why) You Need to Put Sustainability and Community Ahead of Fast Growth
Against the odds
As a CEO, you're under a lot more scrutiny, so you need to have a way to make the best decisions while being able to provide logic.
Changing economies are an opportunity to reevaluate decisions across the entire organization and find ways to increase throughput while doing more with less. Data-driven insights are how leaders navigate the rapidly changing market. They are how leaders lay down a foundation for long-term success, even in a down economy.
I've worked as an executive through the dotcom bust, the tumultuous financial crisis of 2008, Covid-19 and whatever's happening right now. Throughout these adverse economic conditions, here's how objective data fuels growth strategies in even the most difficult of times.
1. Find inefficiencies in your go-to-market engine
Changing economies are an opportunity to reevaluate decisions across your entire organization and find ways to increase throughput. To hit the same revenue targets with fewer resources, you have to cut the waste out of your GTM engine, for example:
- Misallocating resources to unproductive markets
- Inequitable or incorrectly prioritized sales territories
- Inefficient account scoring and targeting
- Spray and pray sales and marketing campaigns
Many companies are finding success by simplifying their strategy to survive the downturn. This means leveraging available technology to increase the amount of first-party data you have and using this information to make strategic, data-driven decisions. Data should be driving choices around the types of target customer accounts, industries and segments that teams focus on:
- Where have you had the most success so far?
- How can you use that information to predict future successes?
- When are customers/prospects dropping off?
- Are customers successful in using my product/service?
- What are the factors contributing to churn?
Related: 3 Tried-and-True Strategies to Help Marketers Navigate Turbulent Economic Conditions
2. Use data to size your market and sell more effectively
After looking inward, leaders must use data to look outward — to size markets, identify prospects, segment and score accounts and personalize the customer experience.
Down economies are an opportunity to ask yourself:
- Can you uncover more opportunities? Can you decrease customer acquisition cost (CAC)?
- How are your territories aligned with our total addressable market(TAM), serviceable addressable market (SAM) and servicable obtainable market (SOM)?
- How can I improve my territory planning and allocation to increase productivity and sales rep success/retention?
- Have I identified all competitive displacement or complementary offering opportunities?
- What can you do differently that hasn't been tried yet?
Using data to size your markets helps you produce more predictable, efficient outcomes and increase ROI from your campaigns and individual contributors. These choices will have an impact on your bottom line for years to come and are especially important in down economies.
3. Aligning teams around data and goals
Data isn't one size fits all — leaders need to understand what types of data and how to use it depending on which department, product or strategy. At the same time, your teams need to be working together toward the same goals using the same data and terminology to drive decision-making, especially when facing difficult economic conditions.
For leaders, shrinking economies are also an opportunity to reprioritize accounts, rethink marketing campaign targeting and align your sales and marketing efforts to drive alignment and efficiency — all powered by data-driven insights. Typically, leaders look immediately toward cost-cutting measures in a bear market, but it is also time to reassess this short-term strategy. A shrinking economy is a time to be proactive, to use capital to take advantage of a shifting ecosystem — particularly in the B2B tech sector, which has historically done well or rebuilt stronger from the rubble. But knowing where to deploy your capital is an important part of this equation. Leaders must leverage the below data-driven insights to capitalize on down economies and turn headwinds in their favor:
- IT spend, tech installs, hardware and tech stack, buyer intent
- Vendor market penetration to find threats, trends and well as competitive displacement and complementary offering opportunities
- Untapped market potential by uncovering gaps and whitespace in your markets
- Contract insights (who are an account's providers, for how long, what are the account's renewal timelines, and more)
- Intent-to-buy signals
- Spend analysis (how much an account spends broken down by technology category and providers)
With market intelligence and technology intelligence, leaders can develop insight-driven strategies to optimize resource allocation based on revenue potential, accounts with adequate budgets and compatible technology stacks, find threats, trends and opportunities.
Related: 3 Tips to Achieve Growth in 2023 Through Data-Driven Marketing Strategies
Growing while others shrink
"Past performance is not indicative of future results." We've all seen this disclaimer before, and it's true — what worked yesterday will not get us through these unprecedented times. But what if, as a leader, you could deliver predictability — even in the least predictable times, insights into IT spend, technology install, tech stack and other customizable criteria to identify opportunities for growth benefit everyone in an entire company, from department to department, use case to use case.
It works, I've seen it. Even in this unpredictable economy, objective data has empowered not only my customers, but the entire industry.
