Should you be thinking about how to recession-proof your small business?
-
- A glance at the headlines would indicate that the answer is “yes.”
- war in Ukraine
- supply chain disruptions
- oil and energy price increases
- rising interest rates
- looming real estate market collapse
- diminishing consumer confidence
Even the tech giants are feeling the pinch.
-
- YouTube advertising revenue fell by about 2%.
- Meta average revenue per user decreased to $9.41 compared to $9.83 earlier. As a result, it’s looking at significant layoffs across its social media assets.
- Apple and Amazon have announced hiring freezes.
Difficult economic conditions challenge business owners, especially entrepreneurs, solopreneurs, and small and mid-size businesses.
-
- Is now the time to launch a new business or to scale my business?
- Should I follow through with my plans to increase staff?
- Will my business model take me through the storm, or should I pivot?
- Should I wait until things settle down before expanding into new markets or launching new products or services?
History has taught us that periods of economic disruption can offer exceptional opportunities. For example, leading corporations such as Microsoft, FedEx, and GE launched during a recession or depression.
You can recession-proof your small business with a strategic outlook, positivity, creativity, patience, and grit.
So, let’s jump into our favorite tips to help you recession-proof your small business and leave the doomsday stats to the journalists.
Concentrate On Customer Retention
Now is the time to think outside the box.
Get in touch with your current customers and ensure they get everything they need from your company.
Customer churn is something you want to avoid. It will be much more challenging to win new business during a downturn. If your existing customers are not completely satisfied with your products or services, find out why and course correct.
-
- Tailor products that meet their specific needs.
- Focus on cross-selling and upselling.
- Offer incentives such as special pre-sales events, discounts, coupons, loyalty rewards, etc.
- Optimize your customer touchpoints to build trust and brand loyalty.
Most people now use feeds to discover content and use messaging for deeper connections. (Mark Zuckerberg)
According to Meta’s recent performance update, users are moving away from posting updates to connect with others. Message groups have taken over that role. The main feed has become a place for entertainment and to find out about brands, products, and the latest news.
WhatsApp could be a powerful tool to help you stay in touch with your current customer base. Meta just released a new best practices guide to help you mine the best features of WhatsApp to build relationships and nurture your leads through the entire sales journey.
Discover The Needs Of Your Potential Customers
While staying true to your brand’s vision, mission and goals, look for novel ways to address the needs of your prospects. Then, as the needs of your consumer base change, adjust and do what you can to fill those gaps. It could be as simple as changing your packaging, offering extended shopping hours in your physical store, improving the UX on your website, setting up social shopping on your social media channels, or other strategies that make it easier for new customers to purchase products or services from you.
Network
Join online and offline networking groups. That old saying, “two minds are better than one,” is true. You’ll tap into fresh ideas and make new connections. By networking, you’ll discover opportunities for collaborations and learn outside-the-box strategies for growing your small business, even during times of economic uncertainty.
LinkedIn hosts many communities. Getting involved is one of the best ways to recession-proof your small business. But there are other platforms, too, such as Reddit and Facebook groups.
Automate
Invest in software that will help you automate time-consuming tasks, simplify workflow for your team and eliminate unnecessary paperwork. With the right technology, your employees will be free to focus on generating demand and quality leads, closing sales, and keeping current customers happy. Technology can also empower you to optimize your marketing strategy by providing you with real-time data to personalize messaging and measure outcomes.
Recession-Proof Your Small Business With Strategic Marketing
During a market downturn, company valuations also go down, leading to decreased spending.
Consumers’ net worth also goes down when a company’s valuation falls. According to Fool.com, 43% of the American population owns stocks. That’s a lot of consumers feeling the pain. When consumers have less disposable money, they spend less. As a result, they will be much more strategic about what, where, and when they buy.
A typical knee-jerk reaction to a tightening market is to reduce the marketing budget. But that’s a mistake.
Now is the time to be more strategic with your marketing budget. For instance, you’ll want to be sure that your customer personas are valid. Everyone is not your customer, and during challenging economic times, you don’t want to waste your money marketing to people who will not buy from you.
Focus on proof of value
Proof of value should be an inherent part of your marketing strategy, but it is critical during an economic downturn when consumers have less purchasing power. Products or services of necessity will top the agenda. Your customers will be looking for the best value for the best price. Your marketing message must convey that your products or services meet those objectives.
Consumers trust other consumers
Increase the amount of UGC (user-generated content) that you publish. Potential customers will be more trusting of content from previous users of your products or services. Share your success stories. Consider adding influencer marketing to your mix. However, save money and collaborate with smaller influencers who can bring you prospects that will convert.
Expand your market
In the digital space, you can be global. Expanding to new regions is one way to recession-proof your small business. In addition, you’ll build demand for your products or service and increase brand recognition. You’ll also find that advertising is much cheaper in other areas of the world.
Optimize your email marketing
Email marketing is much more than sending out weekly or monthly promos. On the other hand, you don’t want to bombard your recipients with daily emails unless you have something new to offer.
-
- segment your email list
- personalize your messages
- talk about the challenges of living through economic disruptions
- make a heart-to-heart connection
- send interactive emails
- provide a clear CTA
- use automation software
Omnichannel marketing
As mentioned earlier, consumers will be looking for the best products or services at the best price. They’ll be looking for value and authenticity—brands they can trust. And much of that search will take place online. So, to reach them, you need to be omnichannel.
However, remember an earlier tip: marketing on social media requires commitment and consistency.
Match your channels to your consumers and pick platforms with features you enjoy using.
Brands are all over TikTok, but if you don’t have the capacity to create the type of video that succeeds on that platform, skip it.
How do you find out where your customers are?
Social listening tools are imperative. It’s the only way to find out what your current customers are saying about you and where they are having these conversations.
For example, with social listening tools, you’ll know when potential customers are asking for suggestions of brands or where they can buy the types of products or services that you offer.
Listen in on what consumers are saying about your competitors too. Discover what types of content and keywords are working for them, and up the ante.
Bottom Line
It’s impossible to know with certainty when (or if) the world will enter a recession, even though all indicators point in that direction. The world’s leading economists all share different scenarios. Whatever comes, history has shown us that nothing lasts.
-
- maintain agility
- be strategic
- take advantage of opportunities
- focus on customer retention, and don’t panic.
Leave us a comment and let us know what you’re doing to recession-proof your small business. Or if you’re planning on launching a startup next year.
Don’t forget to sign up to follow this blog (if you’re not already a subscriber). Follow us on social media too. We’d love to hear from you!