Can AI Help My Business in a Recession?
During an economic downturn, most business leaders and CEOs are focused on two things: (1) reducing unnecessary expenses and (2) conserving capital.
Perhaps you've already started implementing certain policies into your company's operations that range from postponing experimental projects or hiring practices to gently pumping the brakes on other growth plans for the foreseeable future.
You're certainly not alone. In fact, big tech giants like Google have announced an extension of its hiring freeze for the remainder of 2022.
It's true that recessions often present challenges for business owners, even in the tech industry. But if history has taught us anything it's that recessions also present unique opportunities to drive your business forward.
Businesses That Do Well In a Recession
You may be familiar with the types of industries that are known to thrive during recessions. A few examples include:
Healthcare
Grocery & Food Stores
Accounting and Tax Services
Financial Advisors
Repair & Maintenance
As our world continues to revolve (and evolve) around new advancement in technology and automation, it's clear that artificial intelligence and machine learning (AI/ML) will prove to be among these recession-proof industries.
In fact, despite fears of an impending recession, companies are expected to invest in technology solutions that will help them ride out the storm and drive positive business outcomes.
How Can AI Support Your Business in a Recession?
To demonstrate how AI and automation can support your business, as well as your customers, let's go back to the two common practices most companies will implement at the start of an economic downturn.
Reducing unnecessary expenses
Cutting or minimizing costs sounds like a reasonable business tactic. But how do you know which operating costs will actually save you money in the long run? For instance, during a recession, many businesses will cut their marketing spend, only to discover soon after that their competitors did not and are actually retargeting their customers and stealing their leads.
Similarly, a store owner purchasing less inventory decreases inventory costs in the short term, but could result in empty shelves, lost sales, and churned customers in the long term.
Reducing spending you "think" is unnecessary could actually cost you more in the end.
How AI Can Help
With the right data, AI allows you to analyze its patterns in order to predict future outcomes with a high degree of precision. This precision is of critical importance in tough economic times—when you’re trying to make key operating forecasts where an error in either direction costs you money.
Ultimately, AI provides you with deeper insights into your operations, so you spend less time guessing and can improve efficiency using data-based decisions.
Conserving capital
Opting into new technologies may first sound like the opposite of mitigating risk. But the truth is AI might be your best investment during a recession.
Due to its automation capabilities, AI ultimately allows companies to do more with less. For example, in addition to predicting customer behaviors and market trends, AI can help you automate routine processes and make decisions in real-time.
Credit card companies that use AI automation to monitor and track fraudulent activity, for example, can identify anomalies faster than humans and freeze transactions based on activity to protect customers and their finances.
AI has also been widely used in chatbots to help customers get access to 24/7 support. From answering frequently asked questions to redirecting them to the correct departments to solve an issue with a particular product or service, AI can help you serve more customers in less time and with minimal labor.
Fathom Video, a Rackhouse portfolio company, is a prime example of AI saving both time and effort for teams. As more companies rely on Zoom meetings, employees are required to take copious notes or record Zoom meetings as a way of recalling important information and facts from the meeting.
Fathom changes the way team members can recall information from zoom calls using AI to automatically transcribe and notate the entire meeting.
Is AI In Your Future?
As you plan and prepare your business for a possible recession, it's important to consider the benefits of harnessing the power of AI in your company's existing operations and infrastructure. The reality is many of your competitors may already be doing so.
By utilizing AI technology, you can expect more data-based intelligence to make informed decisions that affect the future of your company, allowing you to ride out the uncertainties and often thrive as a result.