Economic downturns, such as the one brought on by the COVID-19 pandemic, negatively impacts all businesses. But changing conditions can often provide you with new opportunities to outsmart competitors and thrive during periods of economic downturn. Here’s how:
Marketing and social media
You may feel tempted to slash your marketing budget during a downturn to cut costs but marketing initiatives can help your business and brand stay in the minds of consumers. And when consumers do decide to buy goods or services, they will turn towards the businesses that maintained an online or offline presence over businesses that didn’t.
Maintaining an online presence is also a crucial part of any marketing strategy particularly as consumers increasingly choose to shop online. A social media presence will not only help your brand maximise its reach but it will also help keep consumers informed about business hours, business updates, latest offers, giveaways and events, especially during turbulent times.
Manage cash outflows
Cutting costs during a recession is a no-brainer but doing so in an effective manner is key. It’s important that you assess costly purchases, planned expenditures and other business activities based on their level of need and cut down spending on all nonessential goods and services. The money you save by cutting out unnecessary costs can be allocated to areas that increase profits such as marketing, quality and customer service.
You can also try to negotiate with suppliers, contractors and landlords for more favorable prices or payment terms. Your vendors or contractors might be willing to renegotiate terms rather than to lose your business entirely so it is always important to ask what options are available than not.
Invest in customers
Acquiring new customers during a recession can be quite challenging as people become more cautious about their spending habits. Therefore, investing in your existing customer base is crucial. One of the most effective ways of doing this is to maintain good customer service and make your customers feel valued. This includes acknowledging customer complaints and feedback and proactively addressing them. Going through customer feedback on Facebook, Google or your website is an easy way of finding out if customers are satisfied with service delivery.
It is also important to remind customers of the unique value provided by your goods or services that makes them choose your services over those of competitors. Price is definitely an important factor driving consumer choices, but if your prices are higher than that of competitors, you can still gain a competitive advantage by providing higher quality products or superior customer service.
Economic downturns are difficult to navigate, especially for small businesses with limited resources. But leveraging on your existing strengths and prioritizing customer needs can help your business capitalize on new opportunities and continue to grow during difficult times. Do you agree? We’d like to hear about your experiences navigating the pandemic in the comments below.
Image credits: Tim Mossholder/Unsplash
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