Research by the Economist intelligence Unit and TripleIC shows that businesses would typically be likely to loose (and need to replace at a cost) 25% of their customers in 2008. This year is not, however, a typical year. For most businesses the outcome will be worse.

The IMF has today cut the forecast of economic growth in the UK to 1.4 percent, signalling a dramatic decline in confidence and far below the forecast of Her Majesty's Treasury. The simple fact is that we may well already be in recession. Bureaucracy always applies its definitions in arrears, so that delays the public awareness of the reality.

As investment and budgets are cut, new or replacement business will be increasingly difficult to find. You must have a clear and effective strategy in place to keep your best customers and bring new, but worthwhile customers to your door. That strategy can only be one of Customer Engagement for a number of reasons.

The argument.

Engaged customers are loyal customers in all conditions. In a market where confidence is low - and falling - only the actions of committed customers give you real credibility. So, the relationship between your engaged customers and your employees leads to you being able to deliver superior service at ever reducing cost. Your revenues and profits are sustained in all conditions. Investor satisfaction and loyalty are high and necessary finance is available to fund essential activities.

The problem.

Current woes are traceable to the venal, one might almost say, "criminal" acts of the Financial Sector, beginning in the USA and rapidly spreading throughout the world. There were no innocents here. Be assured that no one will be found to blame as neither Government nor regulator was keeping watch. Banks and brokers were mis-selling and pocketing massive personal and business gains. Rating agencies were turning a blind eye to risk. Greed and sloth gave the 7 Deadly Sins a jubilee.

But what has this to do with the price of fish?

Which customers migrate?

Let us take as an example the British banking sector. Further let us consider an untypical - I hope - but striking example, Northern Rock. This debacle carries warnings that are more worrying than those in power seem to understand.

Northern Rock has lost customers as they have lost almost £600 million in the latest quarter. They attempted, apparently with some success, to accelerate repayments of part of the loan of "last resort" owed to the Bank of England and the British taxpayer. So to answer my own question which customers have gone elsewhere?

The answer is obvious - those few that during a credit crunch are sufficiently valuable to be able to negotiate a better deal from another lender. In short the best and only customers that can provide the bank with necessary working capital and profit are walking out of the door. Meanwhile Northern Rock is multiplying teams to focus on repossessions. Leaving aside the ethical question of whether it is appropriate for a bank to use taxpayers' money to be make taxpayers homeless, recent research from the USA suggests that the best that banks are able to wring out of repossessions is 50 cents on the dollar.

As a business Northern Rock is between the proverbial two hard places. They have a duty to repay the massive loan to the British taxpayer. And as they repay the cash drain on their dwindling resources is depriving them of the money that might - with a following wind - have enabled more intelligent trading and a slow recovery.

Politicians intervene.

Mr. Darling, with uncharacteristic speed, intervened when Northern Rock announced their losses. He invested a further £3 billion of your money in the failing bank. Note this carefully - he made you and I stockholders. This means that whereas in respect of the loan that the Bank of England kindly and necessarily provided we, the tax payers, will be at the front of the queue to get what remains if - when(?) - things go totally wrong. As stockholders, however, we can whistle for our money from the back of the queue. Does Mr Darling not understand this basic business fact?

He says that we will get our £3 billion back when the "bank is sold". It proved impossible to sell while Mr. Darling dithered over nationalisation and the full ghastly truth had yet to come to light. What hope is there of a sale when the bulk of worthwhile customers has gone elsewhere and all that is left is a rump of those that have borrowed more than they can repay and a housing stock that, partly due to Mr. Darling's present inactivity, is losing value daily? The moment he hinted that he would "do something" to help the housing market every active purchaser paused waiting for the handout to be announced. Do you blame them? I cannot. I know however - as a lifelong Labour voter - who I blame.

Royal Bank of Scotland.

As I write the radio news repeats with glum pleasure that today the Royal Bank of Scotland will announce "the biggest losses ever by a British Bank". (As it turns out £691 million does not sound too bad these days.)

Mistakes have undoubtedly been made, but there are crucial differences. RBS is a massive bank with the strength to recover. Most of their losses result from one off charges as, for example, in respect of the questionable acquisition of ABN Amro.

They have talented people and have gone to some lengths to attract more. There is no reason for their highly profitable corporate customers to go elsewhere. In complete contrast to Northern Rock the Royal Bank of Scotland can minimise the loss of customers and, through the application of solid Customer Engagement principles, keep their investors on board as well so avoiding the dead touch of 'help' from politicians.

The simple fact is that in business you are on our own. You can expect little or no help from elsewhere. If help is attempted by politicians, much of it will do more harm than good. You cannot afford to sit, hands over eyes and brain in neutral as you wait for the danger to pass. What, therefore, will you do today to ensure prosperity and avoid customer churn in hard times?

The prof's views are strictly his own and do not reflect those of Triple IC Limited, the university or any other organisation. The point remains, however, what are you doing to build customer engagement, the sole key to prosperity in hard times?