B2B interactions have shifted over the past few years in response to continued economic uncertainty and changes to the buying process. And while not all changes have been negative, it’s hard not to focus on the low points. Now is a good time to take a broader look at the current state of B2B relationships and identify opportunities to adapt and strengthen your processes for a successful year ahead.
Economic uncertainty
The economy is in turmoil. Inflation rates clocked in at 7.7% in November 2022, which is significantly higher than pre-pandemic rates. Consumer mortgage interest rates are over 6%, and the credit card interest rates have spiked to unprecedented levels. Although unemployment has remained relatively low at 3.7% in November 2022, there are still numerous experts and analysts who warn of an impending (if not already started) recession.
Naturally, this uncertainty influences the way B2B relationships are formed and maintained. Many businesses may hold off on big spends, reduce budgets, or find themselves in a situation where they need to make some tough decisions about partnerships.
Clear communication is essential. All relationships rely on communication to survive, and that includes professional partnerships. It’s important for both parties to communicate their current and anticipated challenges and needs to ensure everyone has the information required to make informed decisions clearly and concisely.
Strategic business decisions
Efficiency is essential in business, but it’s especially pivotal during an economic downturn or times of financial difficulty. A leading question many business leaders will ask is “How will this impact our relationships with suppliers, marketplaces, and other business partners?”
It’s a proactive question that allows leaders to stay ahead of the challenges caused by market fluctuations. In today’s market, this translates to a focus on maintaining and even strengthening B2B relationships. Tom Stein, chairman and chief growth officer of Stein IAS, recently shared, “During the pandemic, B2B brands out-performed consumer brands and were a driving force in sustaining and growing the economy. During this period of uncertainty, the macros are different – inflation, challenging financial markets, the war – but B2B brands will continue to outperform. One of the critical keys is to optimize investment in creating future demand while at the same time harvesting existing demand. It takes a strong brand to do this, and a smart interlock of brand and demand activities and investment.”
The key to remaining strong during economic hard times is to:
- Ensure precision in buying decisions to keep spending in check
- Bolster existing relationships to build a strong network with consistency in engagements
- Get creative in managing existing resources
Business is built on relationships. By focusing your attention on strengthening existing partnerships, you’ll not only build trust and loyalty, but also further develop your reputation, which can extend to new partnerships in the future as well.
Bright spot
When there are obstacles in the way of economic success, it’s important to think strategically and act quickly. In 2020, at the height of the pandemic, businesses deployed rapid digitization to allow employees to safely work remotely. Crisis can be a time of stress, but also a time to uncover what needs to change or improve immediately.
Advanced technology solutions have risen in recent years, offering new ways to solve problems and ease the burden on professionals in virtually every industry. Digital payments, for example, are on the rise due to their ability to streamline the payment process.
While uncertainty can make it difficult to build new relationships, it also has the potential to improve existing ones. These are people who already know you and your capabilities, and vice versa, which makes them more willing to listen to what you have to say. Building trust and loyalty is a major advantage for businesses, in good and challenging times alike.
As difficult as economic uncertainty is for anyone, there is a reason to be optimistic in 2023. Uncertainty drives loyalty and adaptation, and B2B relationships stand to see benefits from strategic buying decisions and partnerships. The situation will call on many businesses to be creative and smart with their decisions and, most importantly, to maintain good communication with existing and future partners.