How do you keep your business profitable during uncertain times? The answer may be simpler than you think: through marketing and business strategies that not only help you maintain your current profits but also help you make more money. Here are some proven business and marketing strategies to help you recession-proof your business. They work for my small business clients and can work for you too.
Keep your pricing in check
In uncertain times, it is important to keep your prices in check. While it may seem like a good idea to raise prices beyond inflation to make more money, it can actually have the opposite effect. During tough times, customers are often on a tighter budget and are looking for good deals or a lot of value.
Where possible, keep your prices steady in order to stay competitive and attract more customers. You can also offer special deals or promotional packages to entice target customers and increase sales.
So how can you improve margins without raising prices? Two things come to mind. First, look for ways you can add value to your current products or services. Add complimentary services such as audits or maintenance checkups or offer additional warranties or even free shipping. You can bundle products or services together to make them more attractive.
Second, look for ways to reduce the cost of sales such as materials, inventory, and service / direct labor. Can you get discounts or better pricing from vendors? Can you improve efficiency in service delivery? All of these strategies can help you increase gross profit without raising prices.
Get lean and mean
When it comes to making your business recession-proof, getting lean and mean is key. You need to make sure that you’re operating as efficiently as possible and not overspending in areas that don’t need it. Here are a few ways to get lean and mean:
- Re-evaluate costs. Take a look at all of your expenses. Can any be reduced without sacrificing long-term growth and profitability? Consider things like office or warehouse space, supplies, insurance, and travel. Staff and marketing are always options, but remember you still need sales and people to have a business. So put thought — short-term and long-term impact — into the cost-cutting you do.
- Consider outsourcing. If you’re feeling the pinch of a tight budget, outsourcing may be an option for you. Outsourcing certain tasks or operations can help save money in the short term, as well as free up resources for more important aspects of your business.
- Go digital. Investing in digital tools and technology can help streamline your business processes, freeing up time and energy to focus on the core aspects of your business.
- Create a contingency plan. Creating a contingency plan is always a good idea in case something unexpected comes up. This plan should include backup funds, a line of credit, or other resources in case you need to quickly pivot or adjust your plans.
- Stay focused on customer service. Customers appreciate how much attention they receive from businesses during this time period. Remember, being empathetic and helpful doesn’t cost more but customers notice.
Keep these in mind as you set your roadmap for the coming year.
Related: 7 Do’s and Don’ts to Make Planning Easier and More Effective
Diversify your offerings
In the face of an uncertain economic environment, it is important to diversify your offerings. This can include expanding into new markets, offering new products or services, or creating new channels of distribution. It is important to stay informed and up-to-date on emerging trends so you can anticipate customer needs and identify opportunities to capitalize on them.
Like many of us did in 2020 when the pandemic hit, think outside the box. Or in this case, outside traditional ones for your business. By diversifying your offerings, you can reduce risk and increase the chances of staying profitable during uncertain times. Not only will this help you make more money, but it will also help you create a larger customer base and build loyalty. Furthermore, diversification can lead to cost savings, as you may be able to leverage existing resources or form strategic partnerships to create additional revenue streams.
Finally, make sure that you are closely monitoring market conditions and making timely adjustments to ensure that your diversified offerings remain relevant and competitive. By doing so, you can increase your chances of staying profitable during tough times.
Focus on your existing customers
It can be tempting to focus on getting new customers during an economic downturn, but it’s important to prioritize your existing customer base first. Your current customers are the ones that know and trust you and will be more likely to stay with you during difficult times.
So, maintain those strong relationships. Send out email newsletters to keep them updated, share relevant information and show them you care. Connect with them on social media and invite them to take surveys or offer feedback so you can continue to improve. Reach out by phone or email to ask them to write a review for your business.
Don’t be afraid to get creative: If your company does well by sticking with tried-and-true methods like coupons and sales promotions, don’t stop now! But try new things like raffles or contests every few weeks or months. Just have fun with it.
These strategies will help you maintain loyalty among your existing customers and can even bring in new ones. It may take some extra effort, but focusing on your existing customer base is essential for long-term success — and helps recession-proof your business during uncertain times.
Invest in content marketing
Content marketing is one of the most effective and cost-efficient ways to attract and retain customers during uncertain economic times. Content marketing involves creating and sharing content (such as blog posts, videos, podcasts, and social media posts) that educates and entertains your target audience. It can be used to build trust with potential customers and showcase your company’s expertise.
Creating content can help your business gain visibility and build credibility. By producing quality content regularly, you can connect with current customers, engage new prospects, and drive organic traffic to your website. Additionally, content marketing can help you stay competitive, even when other businesses may be scaling back their marketing budgets.
When it comes to content creation, it’s important to focus on topics that are relevant to your target audience. Create content that answers their questions, provides useful information, and solves their problems. This will help increase engagement and establish you or your company as a trusted source of information. And remember it’s okay to repurpose things you did last year or beyond. Just update and make sure it’s still relevant.
Like all marketing efforts, measure performance and track results. This will help you identify what works best so you can focus your efforts on creating content that resonates with your audience and drives more leads and sales.
Create a great customer experience
Attracting new customers is easier when people are already talking about your business. Positive reviews and word-of-mouth promotion can go a long way when times get tough. Here is a little fun fact to keep in mind: 74% of consumers identify word of mouth as a critical influencer for buying decisions. And that is what a great customer experience can help create.
Here are three fundamental ways you can impact the customer experience: quality products that solve problems or meet their needs, customer service that is friendly and knowledgeable, and a commitment to continuous improvement. These are the foundation or starting points.
It’s also important to remember that your customer experience goes beyond providing good products or quality service. It’s also about communication, convenience, building relationships, and creating a sense of loyalty. Engaging with customers on social media, responding quickly to customer inquiries, and personalized offerings or discounts can go a long way toward creating a positive customer experience. And when something goes wrong, how you handle it also goes a long way as well. And if you can create an experience that stands out from the competition, you’re more likely to keep customers coming back even in difficult economic times.
Go after new markets
Another way to keep your business competitive and profitable is to target new markets with your current products or services. To find new markets, start by researching who your current customers are and what other markets might be interested in your products or services. Identify any gaps that exist in the market that you can fill and target those specific audiences. You may also want to consider partnering with other businesses in related industries to access their customer base as well.
Once you have identified a potential market, you can begin to craft marketing messages that resonate with that audience. You’ll need to tailor your messages based on their buying behaviors and preferences. You may also need to adjust your pricing strategy for the new market, depending on supply and demand.
By tapping into new markets, you’ll be able to remain competitive and generate additional revenue during uncertain times. With the right strategies in place, you can recession-proof your business and come out stronger in the long run.
Keep an eye on your competitors
Keeping an eye on your competitors is a key part of any successful business strategy. During times of uncertainty and economic recession, it’s even more important to monitor your competition. By understanding what your competitors are doing to improve business and grow sales, you can make sure your own business remains profitable.
Here are a few things to keep your eyes on:
- What campaigns or promotional efforts are they running?
- Are they launching any new products or upgrading some they already have?
- Are they offering discounts or savings?
- Have they made any changes in their overall pricing strategy?
- Are they implementing any new payment options or terms? How about loyalty programs?
- How are they responding to the current climate: cutting costs, reducing staff, investing in new technology, or marketing?
Observing your competitors’ strategies can give you valuable insights into how to best position yourself for success during uncertain times.
Yes, these are uncertain times for many small business owners. But challenges provide opportunities to grow stronger if you are willing to take action. You don’t need to do all of these business and marketing strategies today. But pick one to help recession-proof your business — and get started. Then add more as you go along.
Need help prioritizing what you need to do and how to do it? Let’s have a conversation. Click here to schedule a brief phone call.