CE Pro August 2023 - 56

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Readying to Ride
the Recession
Rollercoaster
Custom integrators can not only survive
during a downturn, but also use the
economic uncertainty to thrive by
tightening up loose business practices.
By Dave Chase
BUCKLE UP: After an
extended game of chicken
between rising inflation and
interest rates, the economy
looks to be cratering. The
U.S. Federal Reserve now
predicts that we'll enter a
recession later this year, and
slowly recover over the next
two years.
Sound like terrible news?
If you freeze up and fail to
adapt, definitely. Looking at
past recessions, we can make
some very reliable predictions
about how consumer
behaviors are going to
change when the next downturn
hits. If you understand
the recession mindset, you
can not only navigate the
downturn, but also use it as
an opportunity to eliminate
wasteful business practices,
build your customer relationships,
and emerge stronger
than ever before.
Know Your Customer
According to Harvard Business
Review, you can expect
56 | CE Pro August 2023
consumers to fall into one
of four categories during a
recession:
1. " Slam on the brakes "
- don't spend on anything
but essentials like food and
shelter.
2. " Pained but patient " -
will cut back on luxuries and
delay major purchases.
3. " Comfortably well-off "
- overall spending doesn't
necessarily change, but they
may be reluctant to make
flashy purchases.
4. " Live for today " - the
" YOLO " segment. These
consumers, often young
people, will continue to
pay for the brands and
experiences they love,
though they might be more
conservative about trying
new things.
The typical CE customer
falls somewhere between
" pained but patient " and
" comfortably well-off. "
They're relatively affluent
and fiscally responsible. A
lot of them might be comGet
better familiarized with your customers' M.O. and learn
to adapt your sales approach if necessary.
fortable planning projects
during a recession even if
they're hesitant to break
ground, so continue to nurture
the relationship. You
can work with that.
Focus on the Essentials
During a recession, your
customer's mindset will
change, so your sales approach
must shift, too. As
an alternative to painting
a picture of a dream home
full of possibility, consider
appealing to more basic
needs - security, stability,
and peace of mind.
Regardless of customer
category, everyone is willing
to spend money on " essentials. "
That's partly why the
CE industry grew during the
COVID-19 recession: during
quarantine, home office
and media room upgrades
seemed less like a luxury
and more like a lifeline to
sanity. What do you offer
that customers really can't
live without?
I often hear integrators
say, " I sell luxuries. " However,
one man's luxury is
another man's oxygen. How
would your customer react
if their home network went
down or was breached?
How important is the peace
of mind they derive from
their home monitoring or
control system?
Now is an excellent time
to double down on service
offerings relating to physical,
network, and energy
security. Your " comfortably
well-off " customers may
not want to invest in an
ostentatious new video wall,
but they will still invest to
protect their home and lifestyle.
Even if the economy
is seriously unsteady, you'll
be able to sell " essential "
services.
Be Ready to Negotiate
Everyone loves a deal, but
especially during a downturn.
You can use this
increased price sensitivity to
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CE Pro August 2023

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