Five Ways to Prosper During a Recession
In each economic downturn there are many people who really benefit from the recession, and there is no reason for your company to not be included. In a bear market, business owners do not have to beat the bear, they just need to beat the competition. The trick is learning how to beat your competition and expand your business.
Here are five tactics to consider to help your company prosper in a recession.
1. Sell, sell and sell more
During boom times, a company often ‘forgets’ how to sell. “If a prospect does not buy, another will come by shortly.” Selling becomes too easy… In a recession, on the other hand, customers become very conservative and circumspect on how they spend money. That does not mean that they are not going to buy, you simply need a better sales process to help them solve their issue and spend the money. Studies have shown that a buyer will see, review and reconsider an average purchase of seven times before making a decision. In contrast, most sales personnel resigned after trying to close the sale once, and only a few will try up to three times before giving up. That is not good enough in a good economy and terrible in a bad one.
You just need to ask for the business more frequently. Get in front of more prospects. And most importantly, be persistent, optimistic and positive.
2. Know your target market and expand your offer
In difficult times, a company should stick to what they do best. Eliminate the next shiny idea and weak products that are not part of the main business. Instead, the company should spend all its energy on strengthening those central products and services that contribute the most to the volume and margin of sales. Then, make it easier for customers to spend more money by identifying any upsell and cross sell opportunities and make sure you have quality offerings that are easy to supply.
3. Increase marketing spend
For successful companies, marketing is not a cost, it is an investment that generates income from new customers. From that perspective, the business owner should be willing to spend some percentage of income to acquire new perspectives. This percentage will be based on the company’s average customer value (cost of acquisition vs life time value) and should increase during economic recessions. Customers are harder to find and close so we need MORE of them.
4. Deploy an ‘easy to buy’ strategy.
Make it easier for people to do business with you. Surprisingly, in difficult times, many companies will make customers buying decisions harder. They adjust credit policies, shorten the business hours or eliminate customer loyalty programs. An ‘easy to buy’ strategy does the opposite. If the competitors are reducing and running scared, we welcome their customers with open arms. Offer terms. Free shipping. Better warrantees. Better service. Better everything.
5. Clear unique selling proposition (USP) and return on investment (ROI)
Even in a “recession”, people will always spend money. They might be more careful, or not spend as much, but the needs of people have not changed and they will continue to buy things with perceived value. To win your business, you must demonstrate that value clearly. Provide detailed information and show them exactly how they will benefit. Consider creating case studies, whitepapers, videos and product demonstrations.
As an owner you can consider expanding the geographical region in which you compete. The conclusion is in difficult times, you just have to be a better owner of a business. And, perhaps have a business coach to help you.