7 Strategies to Help You Succeed During a Recession

With the Federal Reserve continuing to raise interest rates and the instability of the markets right now, many companies are planning for a recession. Recently, several of the large tech companies have begun layoffs. Just this month Twilio cut 1,500 workers, Yahoo has cut 1,000 jobs with more planned, GitHub is laying off 10% of its workforce, Zoom is slashing 15%, and even Disney is planning on cutting its staff.

With a possible recession looming, it might seem like a time to shutter our windows and hope the storm passes by us unscathed. Or we can do what the most successful companies do and plan for growth. A recession simply means that it’s time to get creative. It can actually help to fuel growth because it forces the great companies to get out of their comfort zone and innovate while the lesser companies perish.

Expanding your loan portfolio may be challenging in 2023, but challenges are what refine us. It’s time to get creative, enthusiastic, and innovative. Here are seven strategies to help you grow your loan portfolio, even during a recession:

1. Magnify Your Workforce

All the layoffs I talked about above can realistically be a good thing for your business. It means a major influx of talent is entering the job market. And this is excellent news for the financial industry. It means that there is a fantastic opportunity to bring in new talent that typically wouldn’t be available. And this talent can bring in a whole new skillset to help you expand your company.

Another way to magnify your workforce is to promote continuing education. The financial industry is constantly changing and growing, and we need to make sure employees are given all the training they need to be successful. An excellent way to do this is to provide continuing education, regular training sessions, and upskilling programs. You should also offer recession-specific training. For example, you could offer a training for credit officers on the additional risk factors they need to consider when issuing loans during a recession or you could have employees take a course on how to create targeted online marketing. And, above all, make sure all employees feel appreciated.

All these things will improve your workforce. And, since a company is only as good as the people that work there, it will improve your company as well.

2. Look for New Opportunities

Now is a great time to search for new opportunities and step out of your comfort zone. Identify the needs of your customers or community and develop niche loans that fulfill those needs. Think about what potential services you could offer that would increase during a down economy. For example, maybe you could start to expand your debt consolidation services, begin working with dealerships, or start offering small loans for emergency expenses? This is the time to think ahead and get creative. Straying from the traditional loans and services you offer may be uncomfortable at first but the success you’ll find should make that discomfort worth it in the end. If you don’t know where to start, reach out to us at GOLDPoint Systems. We work with a wide variety of clients who offer hundreds of different types of loans. We can help you find a variety of niche loans that can help you grow your business.

3. Increase Communication with Customers

Since new customers may be harder to acquire during a recession, you should make every effort to keep the customers that you do have. And that starts with communication. Frequent communication with customers will keep you top of mind and let them know that your company cares about them. Within communications, let your customers know that you understand their challenges and are there for them. This builds trust and continuous relationships. In addition, you can leverage the data you have on your customers to deliver personalized communications and to offer targeted products that your customers need or could use. All these efforts will increase customer satisfaction and lead to greater retention.

Not sure how to start, read this blog on Five Tips to Great Communication for some ideas.

4. Analyze Your Current Client Base

Speaking of your current customers, it will be worth your while to get to know them. Use data analytics to understand what loans they have and what types of loans they are looking for. If you don’t currently offer those types of loans, consider offering them. Lending officers can gain valuable insights into each customer by spending more time with them and examining those relationships carefully. These insights will lead to opportunities.

5. Boost Digital Marketing

If you haven’t already started, you NEED to create a digital presence. Most of your prospective customers will be found online. The younger generations aren’t looking at billboards or the latest hard-copy magazine ad, they are online watching YouTube and TikTok ads. They are scrolling through Facebook or Instagram and pinning the latest trends on Pinterest. By developing an online presence, you can raise awareness about your institution and the products and services you offer with both existing and prospective customers. And the best part of marketing online is that most platforms allow you to send your message to very tailored lists of potential customers. This means that the money you spend on marketing will have a much greater return on investment.

Need a place to start, using Instagram Stories could be just what you’re looking for. Read the Lenders Guide to Marketing to Millennials: Instagram Stories blog post for more information.

6. Utilize Technology

The right software can be a game changer during a recession. Haven’t offered electronic signing before? eGOLDSign may be what you need to bring in the younger crowd that is done with pen and paper. Want to cut costs without reducing your workforce? Try switching to electronic statements, it saved one of our clients over $100,000 per month. Need to make sure more of your customers make their payments on time? Make it easy for them by allowing them to make payments via text. Still relying on an old-fashioned and clunky website made solely for computer access? Perhaps you should consider using a mobile app. Or if you want to really be cool, you could offer instant debit card funding. Software can help you save money, increase engagement, make things easier on your employees, and lead to more growth in your business.

7. Implement Automation

Speaking of making things easier for your employees, have you ever thought about automation? If you can automate some of the routine tasks that your employees do, you can free them up to do more in-depth work to increase your customer base. You could use a notification system to automatically send out regular emails or text messages to customers to maintain contact and remind them of payments (pssst, we have one of those). You could automatically send out electronic statements instead of painstakingly mailing out paper ones. And you can even automate the entire loan onboarding process to free up loads of time. Our Automated Workflow Engine takes the loan application from start to finish through all your different parameters and benchmarks to determine whether to accept or reject the application, what terms to offer, and even the interest rate to apply based on the borrower’s history. It’s a pretty amazing product and I can’t tell you everything about it in this short paragraph, so you might want to check out the Welcome to the Automated Workflow Engine blog post. After learning about it, you’ll be scrambling to get it set up for your institution. The kind of automation offered by the Automated Workflow Engine will definitely help you to thrive during a recession.

If you can implement each of these seven strategies, you can ensure continued loan growth even during a recession. And if a recession doesn’t happen? Even better. You will have taken key steps to launch your company forward.

If you are new to GOLDPoint Systems and want to learn how we helped our clients process over four million loan applications last year, contact us today!