Learn Strategies You Can Implement NOW to Increase Revenue During Economic Uncertainty and Recession-Proof Your Profit.
Current economic indicators are increasingly unfavorable due to a massive stock market correction, high inflation, and shock waves emanating from the ongoing war in Ukraine. These factors collectively contribute to a challenging economic environment that affects businesses globally.
According to the International Monetary Fund (IMF), "Global growth is projected to slow from an estimated 6.1% in 2021 to 3.6% in 2022." This significant decline indicates a reduction in economic activity, impacting various sectors and industries. Furthermore, the IMF also projects "2022 inflation of 5.7% in advanced economies," highlighting the rising cost of goods and services that consumers and businesses alike are facing. This high inflation rate erodes purchasing power and increases operational costs, making it more difficult for companies to maintain their profit margins.
In addition to these challenges, business demand has weakened. Deloitte notes that this is "largely due to fears that monetary policy will stifle economic growth." As central banks around the world adjust interest rates to combat inflation, borrowing costs rise, leading to reduced investment and consumer spending. This, in turn, creates an uncertain environment for product managers who are responsible for sustaining profitable operations amidst fluctuating market conditions.
Given these economic uncertainties, it is crucial for businesses to recession-proof their models. One effective way to do this is by leveraging strategies that can enhance revenue stability and ensure sustainable profits. Based on the popular blog series "Recession-Proof Your Profit," several key strategies can help achieve this goal. These include Term Renewal Acceleration, Segmented Term Renewal, Multi-Term Discount, and Pre-Term Development.
Jason Tanner, the Co-Founder and CEO of Applied Frameworks, provides valuable insights into these strategies. In his comprehensive guide, Tanner explains how each method can be used to accelerate subscription renewals and pull forward revenue. For instance, Term Renewal Acceleration focuses on encouraging customers to renew their subscriptions earlier than scheduled, thereby securing revenue ahead of time. Segmented Term Renewal tailors renewal strategies based on customer segments to maximize retention and satisfaction. Multi-Term Discount offers incentives for customers who commit to longer subscription periods, thus ensuring a more predictable revenue stream. Pre-Term Development involves engaging customers before their renewal date to address any concerns and reinforce the value of the service or product.
By combining these strategies, businesses can better navigate economic downturns and protect their profits. Tanner's expertise and practical advice provide product managers with the tools they need to strengthen their business models and achieve financial resilience in uncertain times.
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About the Series
This is the second session in Jason’s series focused on Software Pricing. In this series, Jason does a deep dive into all things about software pricing and how to best price your software solutions. Check out The Ultimate Guide to Software Pricing Strategies to learn more about how choosing a pricing strategy is the first step to developing a profitable pricing model.