How does your business handle recessions? The answer is often the difference between survival and business burial services. Whether your niche is dentistry, real estate, or insurance to landscaping and handyman work, it’s imperative that you make prudent business moves if you want to survive, much less thrive, during a recession. One such crucial move is to continue marketing your business during a recession. Why? How? Where? Let’s explore.
No One Is Immune To A Recession’s Wrath
Recessions are defined by certain economic conditions, including job loss, manufacturing and production slowdowns, real income decline, and decreases in consumer spending. As such, businesses of all sizes, ages, and niches are inevitably impacted by the slower consumer demand and increasing fears and limited product and credit availability.
In other words, consumers are either hiding out and fearful, pained and patient, financially comfy but uneasy, or still living and buying for the day as their credit allows. Each purchase for all of the above are now either essential, indulgences, postponable, or unjustifiable.
So, people with minor dental complaints are looking to put off services until they become unavoidable. Insurance becomes a luxury, not a necessity. Previously privileged homeowners now turn to DIY for repairs and lawn care to save a buck. Real estate agents are trying to sell and buy just as much as they are a particular property.
Of course, this isn’t just an issue of existing customers and future services. New customers are harder to come by and accounts receivable and liquidity issues for non-payment greatly disrupt your cash flow and reserves. For the business without a recession plan to enact, it leaves a lot of scrambling for solutions and room for critical errors.
Scrambling For A Recession Solution
With problematic cash flow and depleted reserves, many businesses must make some hard financial decisions to keep their doors open. This is a crucial pivot point, and you must ensure that it’s not taking you two steps backward or sideways and forward to a brighter tomorrow.
One of the most obvious cost points is your marketing budget. You may think of it from a consumer standpoint of it being an unjustifiable or postponable service. So, you slash it or pause it for the savings. After all, existing and potential customers are watching their dollars so closely that few are following you down a sales funnel right now anyway, right? So, marketing dollars are just being wasted, right? Actually, no. Nothing could be further from the fact.
This mentality is a disaster in the making for any business. While sales are harder to secure during a recession, allowing yourself to fall off of consumer radar, becoming unseen and unheard, is a gigantic marketing mistake that sinks ships.
Likewise, Harvard Business Review explains, it’s a mistake to alter your brand’s fundamental proposition or positioning.
Instead, the goal is to stabilize your brand and position it as a survivor. With this stability, you demonstrate to customers that you’re here and present as a positive light during the bad times. You’re weathering the financial storms with them and because of them, and you both will be better for it when good financial times return.
Four Marketing Mistakes To Avoid
1. Changing The “Who” Of Your Marketing
It’s tempting to rebrand to target a pained segment of immediate buyers to boost sales. But, shifting your marketing efforts down-market or up-market is a huge mistake.
During a recession, your survival is largely based on the enduring cash flow and organic growth (free marketing and C2C recommendations) from satisfied existing customers. These are the customers that believe in your brand’s value and have already selected you from the crowd at least once. They recognize, trust, endorse, and even promote you. Plus, did you know it’s actually cheaper to re-market to existing customers than acquire new ones?
If you skimp or do away with patron marketing like newsletters, emails, direct mail, postcards, and so forth you’re leaving room for another brand to push you aside with a better value proposition to all those loyal customers. Out of sight, out of mind.
Likewise, changing your brand to accommodate a more vast “who” is a mistake. Think about how existing, trusting, and expecting patrons of a fine dining establishment would feel if it suddenly added a dollar menu to lure fast-food consumers in to dine. Food for thought, right?
The fact is that your target consumer (the who) hasn’t and shouldn’t change. They’ve just reassessed spending, reallocated funds, and redefined value during a recession, and you need to pivot with them.
If you haven’t looked at customer retention metrics and/or don’t have a customer retention strategy, Shopify walks you through all the steps, including marketing directions like emails and loyalty programs.
2. Taking A Digital Marketing Break
Social media is a free and vastly-reaching source of digital marketing, but it takes time and diligence to keep up with, and campaigns and ads still cost money. With money tight and attention turned inward during a recession, it can be tempting to make the mistake of taking a social media break. Don’t.
A lack of social media presence today has dire consequences, including:
- Fewer click through on your website
- Lower search engine rankings
- Decreased brand awareness
- Lower conversion rates
- Lower customer satisfaction
- Less brand loyalty
- Less brand authority and authenticity
- Lower marketplace insights
- Missed networking opportunities
- Narrows your marketing reach
Instead, you should be leveraging the free aspect of social media more than ever in your marketing strategy.
- Use posting to keep patrons and potentials aware that you are open and ready to serve their new needs.
- Let onlookers know about innovative ways your business is meeting their needs and pains during a crisis, whether that be scaled down options, convenience, added value, rewards, or so forth.
- Offer relatable self-help tips for savings elsewhere so they can make room for purchase from you.
Avoid the excuse of not having time for social media. There’s simply too many free and inexpensive tools and sources for help:
- Try out social media tools.
- Get free expert advice.
- Outsource professional social media help via an SEO agency or freelance site like Upwork.
- Draft a college kid. They work cheaply and are the most familiar with social media concepts.
3. Drastically Slashing Prices
So, you’ll get an immediate draw from that class of buyers always looking for a deal if you slash prices. These are the consumers that make an immediate U-turn in the middle of the road when they see a store’s liquidation sign. Yet, this will not be the customer you survive upon. This will not be the customer supporting you after the recession, either.
Meanwhile, your core base becomes disenfranchised that they bought at ‘x’ price from you a few weeks ago, and you’re now basically telling them they significantly overpaid.
This core base will also associate price cuts with two disastrous negatives – simultaneous quality cuts and/or that you’re doomed to go out of business. The latter will not encourage the cash-strapped consumer to buy now and in excess. Instead, most will demise that they might as well go ahead and learn to live without their beloved product or service.
Of course, recession means making cuts, but don’t think that price slashes are going to restock your coffers. You may have to make a sacrifice for your marketing budget. For the savvy business owner, however, all that translates to is finding the most affordable, thoughtful, and targeted forms of marketing, such as:
- Use of direct mail to re-market to loyal customers instead of high-dollar general rollout ads.
- Instead of running big giveaways, you can send a thoughtful postcard to let your clientele know you’re thinking about them. Wise Pelican is an excellent vendor that has hundreds of free templates that are fully customizable.
- Use your website’s blog and social media pages to write about pain points, solutions, tips, and tricks that will connect you to potential buyers as an authority and positive brand.
- Send out care packages of product samples to investigators and previous clients.
- Become involved in local and national charities, events, fundraisers, and community programs. Show you’re a brand who cares whilst also enjoying the positive brand awareness the respected entity naturally brings to your company.
4. Drastically Raising Prices
Going too high with prices is just as harmful as going too low. You look like a price scalping profiteer, and you limit your sale direction to only the unconcerned credit buyers and completely financially secure buyers. Even they, however, likely won’t bite if your price is drastically unreasonable.
Budget shortfalls should never be accommodated with such tactics. You will lose consumer trust instantly and indefinitely.
It’s understandable that prices may go up as your cost of goods and delivery go up. But, your sales shortfalls and limited marketing budget should be made up for by you, not the consumer. How? Here are some ideas:
- Co-advertise with a neighbor.
- Use coupons and special offers to direct business between allies and encourage volume buying.
- Expand your digital footprint and NAP across free listing sites such as Google, Yelp, and niche-specific directories.
- Boost your local ranking with stellar SEO practices.
- Invest in paid digital marketing to boost conversion rates, decrease website errors, streamline click-through processes, cost-per-sale ratios, and so forth.
Are You Making The Above Mistakes?
As you can see, these four mistakes are so multifaceted that it could take days to explain in detail. The bottom line is that marketing to the right audience in the right ways is even more crucial when business volumes are at their lowest.
It’s illogical to think that this would be the time to press the stop button on your efforts. Understand that every marketing expense, such as outsourcing fantastic SEO, digital marketing, and direct marketing, isn’t necessarily an expense so much as it is an asset to get your business through turbulent waters. And, those pros can help you understand and utilize key metrics to know exactly where your marketing dollars are most efficiently and effectively spent.
