Advice for B2B Firms in Volatile Economic Times

The on-again-off-again trade war and tariffs on foreign goods coming into the United States are not only sending shockwaves throughout the stock market. Socio-economic events once considered unlikely are roiling B2B buyer behavior, making traditional go-to-market processes obsolete, according to a new report from Forrester Research.

“B2B marketing, sales, product, and customer leaders face turbulent global markets, geopolitical and social upheaval, and technology disruption, and the sudden advent of systemic risk events are leading to constant volatility,” according to the research firm. “The constant volatility has upended carefully crafted strategies, budgets, and priorities and has left B2B leaders feeling unsure and overwhelmed but creates new opportunities for growth.”

While B2B leaders have always been expected to help their companies grow and become more profitable, now they have to do so in a volatile economic and geopolitical climate, the report says. “It will be challenging to resist reactive decisions (e.g., cost cutting) that are likely to disrupt the delicate balance between short-term [growth] and sustainable, long-term growth. Successful leaders will stay focused on creating buyer value through a revenue process transformation.

“It’s time to improve focus, optimize resources, commit to deliberate change leadership, and embrace enterprise risk management,” the research firm says. So B2B companies need to ruthlessly prioritize target market segments. While budgets tend to tighten in times of high volatility, focusing instead on target markets enables companies to optimize ROI, improve buyer focus, and drive stronger organization discipline, Forrester stresses.

Forrester recommends that companies create profiles of their ideal customers while also assessing the potential impact from market volatility across geographies, industries, and customers.

Best Practices

Other recommendations include the following:

• Leverage new and existing partnerships.
• Eliminate redundant technology as part of a larger effort to trim nonstrategic operating costs. The technology stacks at many B2B firms have grown unwieldy, with 80 percent of IT decision makers saying in the Forrester Q2 2024 Tech Pulse Survey that they have moderate to extensive tech sprawl.
• Double down on customer insights. During periods of high volatility, customer obsession is a necessity, not just a nice-to-have. Ensure that frontline, customer-facing functions prioritize listening and proactively share insights in near real time. This will help identify processes that cause customer friction and drive improvements.
• Stay one step ahead with scenario planning. Companies that are prepared are more ready to act when the situation warrants, so companies should develop cross-functional, what-if contingency plans across the full scope of people, processes, and technology.
• Change the pace of decision making and delegate more to front-line leaders. In volatile times, traditional annual plans and decision-making policies don’t work. Speed and adaptability are essential. Decisions need to be made in near real time.
• Keep data requirements front and center. Even though the political and socio-economic climate might be volatile, regulators and legal teams will still pay attention to compliance requirements. Companies will still need to closely scrutinize their data governance policies and how well they are adhering to them to ensure that nothing has fallen by the wayside. “Make compliance failures part of scenario and contingency planning.”
• Ruthlessly prioritize target market segments. Marketing, sales, product, and customer functions are the most heavily invested areas in B2B organizations, with marketing having the largest allocation of nonpersonnel budget. When faced with high volatility, leaders should anticipate budget tightening and ruthlessly prioritize target market segments to drive greater cost optimization, improve buyer focus, and foster stronger organizational discipline.
• Balance your focus on process and people. Too many organizations over-focus on processes when making changes. But organizational change requires changes to human behavior in the organization as well, Forrester says. “Don’t make the mistake of believing that highly productive people who steer your ship aren’t also burning out. People can both be burning out and be highly engaged. Encourage your people to improve their mental and physical well-being, which will lead to better outcomes for your business.”
• Make continuous learning part of the organizational culture. Organizations that survive and thrive in volatile times do so by cultivating a culture of continuous learning, enabling teams to adapt quickly as new technologies and business challenges emerge.

Taking these key actions will enable leaders to overcome and thrive in the chaos, Forrester concludes in the report.