In the wake of recent global events (from the oil market instability and the new Coronavirus), an impacted business world in the US and worldwide is left scrambling. Small businesses, as well as corporations, across the United States of America & the world are experiencing the possibility of the first recession in over ten years.
The owners & leaders of these businesses are left with one question, what can they do to prepare and come out of this potential drop better & stronger while not letting this minor bump substantially impact their business bottom line.
Cost cutting is one of the first measures that businesses naturally turn to for initial relief. However, we are here to urge you (unless you are now under a mandate — some businesses obviously are now forced to be closed and cannot make any revenue at all), to not stop your advertising. Instead (if your business is not forced to close), we recommend that you view this cool down of the economy as a potential big opportunity.
Recessions should be viewed as a great opportunity for growth instead of doom & gloom
Noticeably, when organizations are faced with the possibility of a recession, they start to cut back on their expenditures. One of the first areas they begin to cut back on, unfortunately, is advertising. We say unfortunately because often, it is a major mistake. Understandably, businesses want to lower outgoing expenses as their profit revenue will in no doubt be affected, but that is always the case in a recession. It can seem difficult to stop it completely, but, as odd as it may sound, there is still a way to use a recession to your advantage.
In a post by Buxton, an industry leader in customer analytics, they cited a research recessionary marketing study completed by McGraw Hill. The study found that after examining 600 companies over a five year span, those who maintained or increased their advertising during a recession had an average sales growth of 256%.
How is it possible to grow your sales during a recession?
These companies came out of recession with such tremendous growth in their sales due to the fact that only 25% of companies increased their marketing in the last recession. These companies that took the bold step to continue their marketing didn’t fall behind; they actually surpassed their competitors by 2.5 times in market share growth.
So when other businesses decided to make cuts to their advertising, it may have helped them in the moment of the recession. Still, it drastically put them behind when American companies escaped, and the business world continued on as it did before. But don’t just take our word for it, take a look at these businesses that grew after the recession in 2007.
Amazon, Inc. Grew During The Great Recession Of 2007/2008
That’s right, the online technology empires’ sales grew 29% during the great recession a decade ago, and it was all due to the fact that they took that time to innovate and market their low-cost alternative products in a struggling economy.
Food Service Direct Competition Example (Taco Bell and Pizza Hut’s strategy vs McDonald’s in the 90’s):
In the 1990-91 recession, Mcdonald’s decided to drop its advertisement and promotion budget. Taco Bell and Pizza Hut took advantage of that decision and maintained/increased their marketing. This resulted in a 61% sales growth for Pizza Hut and a 40% sales increase for Taco Bell. Oh and Mcdonald’s, well they suffered a 28% decline in sales.
The Unfortunate Current Reality We All Face
The recent outbreak of the Corona Virus and its impact on families and businesses across the world has left people with one question, what’s next? We are here to say, focus on a better tomorrow. And even though there are negatives in light of recent events, the business world needs to continue pushing forward, start creating a brighter future for its companies, and not let this outbreak bring them down.
Get ready, because your business is going to be in for some serious uphill work, but don’t get discouraged, this is the time to let your clients know that you are here for them and will continue to serve their needs.
Preparing For the Long Haul
In a matter of business survival, companies are looking at ways to reduce costs and still gain on their investments, trying to create the best cost-effective way to provide their products and services.
But like we mentioned earlier, you should stay away from making the wrong or knee jerk changes to your marketing. Sure, right now it may seem like a good short term fix that creates a bit of extra space in your budget, but cutting marketing efforts will have a substantial negative impact on your business in the future.
Your clients are also trying to cut back on their expenses, but they also need to know that if they are going to spend their money on a service, it should be yours. The best way to do that is to build a trustable image and look at what their specific needs are, letting them know that if they need a service or product, they can confide in you.
Small Business Recession Survival: Five Digital Marketing Strategies
1. Stay Focused On Your Current Customer Base
If you don’t keep in touch with your current customers, you run the risk of losing them. Remember, it’s always more cost-effective to keep any current customers than finding new ones.
Creating a strong connection: Now, we aren’t talking about constantly bugging your customers and sending them an abundance of emails and notices. Marketing automation is an easy way to keep costs down to stay in contact with your customers. You should be sending out information that is personalized to their needs where they are looking, social networking channels. There is nothing worse than a chain of annoying and irrelevant spam emails.
Also, by focusing on a strong and consistent appearance on familiar channels like social media and the main search engines, you create a natural marketing flow that won’t make your customers feel bugged or pressured to buy your services during these difficult times.
Staying Relevant: It is imperative that you stay consistent in the lives of your customers. Think big and take every chance you can to tell your customers what you are doing that makes you stand out over your competitors.
Continue To Engage With Your Customers On Social Media: Facebook, Instagram, Twitter and TikTok are the most popular place that your clients will be looking for information on your products and services, seeing what you offer, and reviewing your business history. Staying connected on social media is a cheap way to make sure your clients know that you are still there.
2. Become more apparent in front of potential consumers
- Staying relevant to what you are selling is extremely important, which means giving people a reason to go to your website. The best way to get new clients is by giving them a reason to choose you when they are looking for what you are selling
- Your future clients already have an idea of what they want in mind; you just need to make your products and services that they are familiar with attractive to them. Center your business on providing quality content that your clients will share with their social base; this helps your image spread without spending more to reach other future clients.
- Update what you already have. Instead of paying more to create new content, update your existing content. It will help you stay relevant while in turn creating better rankings for your business on the top search engines. Adding video as often as possible will lift up the value of the page and keep your visitors longer on your website and have a better chance of converting them now or in the near future.
- Sure, you can say that you are the best business in town, but how far does that go when entrusting others with your services? By creating unbeatable content, this will drive your clients to rave about what you are selling, what other people say about you is more important than what you say about yourself.
3. An Easier. Faster & Relatable Experience for Your Clients
To keep costs down, creating an easy way for your clients to access personalized content will improve their experience from the moment they click on your website and/or page.
- Proof is key. Don’t give your current or future clients a reason to choose your competitor. Make sure your clients see why you are the best option for them by personally marketing to them on your networks.
- Social documentation and posting positive stories about your business. Revisit how you are using your case studies, recommendations, and reviews at every touchpoint in your marketing, and take the time to weave this content throughout your website and share actively on social media.
- It’s all about the client. Customer experience can make or break, so create a fast and personal experience for them. This is a cheap way to prevent future costly impacts on your business.
You need to compare your success to the amount of money you are spending on marketing. If you are spending more than what you are getting back, well that is just money down the drain.
You should measure your sales, numbers of lead generated, up-sells, or referrals to see what exactly is working and what’s not.
- Configure Analytics correctly. Ensure that you are covering all the basics and that your marketing efforts are truly doing what they are meant to do. Google Analytics is a free way to make sure that you are keeping up.
- Measure your social media output. When budgets get tight, you start to look at smart options to reduce costs. Social media activity may be somewhere that you can take a step back from. Take a look at what you are spending on time and personnel and see if your engagement, visibility, and profitability out-ways the costs of keeping up with it.
5. Experiment & Learn – Innovate and improve
You will need to be agile and inventive. See what’s working and what’s not, but you will never know until you try!
- Experimenting should be quick, cheap, and simple to present.
- If it works, then great, if not, move on and focus your time, energy, and money on to something that will!
Remember, if budgets are short, look at all areas where you are investing your money and make the appropriate changes. We highly recommend keeping up or increasing your marketing efforts using cost-effective ways, because, at the end of the day, your business depends on your clients, and they need to know about you!
In order to maintain your client connections & web presence, this is what we suggest:
- Optimizing your site and update core pages (great time to spring clean evergreen content on website & update!)
- Creating fresh and engaging content: video tutorials, video update of the business, new specials
- Utilize social media features such as Instagram / Facebook live to engage with audience (here’s some quick help with video and video livestreaming on Facebook and Instagram)
- Consistently highlight reviews from customers / clients / patients
- Cultivate & engage your current audience
- Virtual and Phone Consultations – Catered specifically to client needs
- Gift Cards and Coupons offered at discounted rate – encourage use for later
- Keeping messages open/live and/or offering to answer questions & communicate directly for any inquires
- Video chat or moving services to remote options
The smartest businesses have great success during recessions.
This is clear proof that even some of the biggest companies can be affected greatly when it comes to making a decision about marketing plans during a slump in the US and World Economy.
What should you do as a small business owner to get through and grow during this time?
We recommend that you follow what the most successful businesses have done over the past few decades.
In a 2008 article amidst the great recession, the Harvest Business Review encouraged companies to focus on eight factors: research the customer, focus on family values, maintain marketing spending, adjust product portfolios, support distributors, adjust pricing tactics, stress market share, and emphasize core values.
A recession can be a stressful time, but keeping in mind, it isn’t just stressful for companies but for their consumers, as well. Yes, the reality is, you may see that your consumers reduce their expenditures towards your business. Yet, it is extremely important to be sensitive during these times and show that you are right there beside them, and we promise that when the smoke inevitably clears in the coming months, not only will they remember your business, but they will trust MORE in your products/services vs your competition.
Getting down to the basics with cost cutting, it’s easy and should be done. However, if you decide to cut your budget on advertising and fall behind in marketing growth, you run the risk of an immediate sales drop, and worse, that your future customers will forget that your services/products exist.
If you need to find a way to maximize your company and reduce spending during this time, we urge you to not let the doom and gloom of a recession get you down, and look away from making negative changes to the marketing of your business.
Again, we feel for the worst hit businesses that have no option but to close down during this virus epidemic. We are here to help you as soon as things stabilize. We are available for conference calls and video conferences to guide/prepare you all throughout, so that you can recover as quickly as possible as soon as we are in the clear.
#trueCharu is Here to Help You!
We want to assure you that we will continue to deliver the level of excellence you’ve come to expect from us here at Charu Interactive. We see this as an opportunity to take your digital media strategies to the next level!
As we find ourselves in this unprecedented time of uncertainty and concern for the well-being of those around us, we are all adjusting to this “new normal.” Our primary concern is for the health & safety of our clients, employees, and their families.
Our goal is to ensure that your business remains at the forefront of the current market & is well-positioned for the future!
Contact us today to schedule a free consultation to come up with a strategy that will make your business money during this recession and any future recession, as well as grabbing as much market share as possible. We are also available for video consultations so it’s like we’re right there with you!
See how you can prepare and start planning for a brighter future for your company and visit us here.