Business owners and executives might start to worry if the economy slows. If consumers reduce their spending, how will business owners and executives be able to sustain revenue or grow? Business leaders can be compelled to adopt consumer-like actions when facing recession woes. They seek ways to cut spending. This includes delaying large projects and instituting a hiring freeze.
Some companies are more affected by a slowing economy than others. However, if there is a recession, leaders and their teams will have to figure out how to overcome it. Contrary to popular belief, a recession does not necessarily mean all hope of growth has been lost. Leaders can capitalize on a slowing economy to create business opportunities. Here are four methods to achieve this.
1. Increase your client base’s marketing efforts
Consumers won’t stop spending if the economy slows down. People might consider different options to prioritize household budget items. Others shoppers won’t make drastic changes to their spending habits as they have enough income to weather a recession. Although some customers might change their buying habits, they won’t often purchase products or services they don’t know about.
Businesses find selling to new customers in growing economies more challenging than current customers. This is true even more in a recession. Your business can sustain revenue by shifting your marketing efforts to existing clients during slow times.
A growth marketing strategy focusing on customer retention has a better chance of producing tangible results. Research shows that selling to existing customers has a success rate between 60% and 70%. However, this number drops to between 5% to 20% for new customers. Targeting existing customers can lead to growth in new products and referrals.
2. Build Online Communities
Imagine you are in a room with someone new, trusting them. It’s more likely that you will engage with someone you already know. A familiar face makes it easier to interact with, regardless of whether there is a feeling of security or established rapport. It’s risky to start a conversation and go out on your own. The risk of going wrong is more remarkable when you don’t know what’s happening.
This scenario can be translated to consumers who are looking for solutions. Consumers will either stick with brands they are familiar with or ask someone they trust for recommendations. Social reference groups are a powerful tool for companies that invest time in building brand trust and identity. The psychology of affiliation also plays a role.
Companies can use social media and digital PR to build brand awareness during times of uncertainty. It’s not about getting people to buy immediately or placing your products and services at the forefront. It is to demonstrate that consumers can trust your brand.
Online communities built around a company’s identity create enthusiasm. This reinforces the belief in a brand’s reliability. People will buy if they know that they can trust a brand.
3. Network Your Way Into New Markets
Marketing to existing customers is usually cheaper and more efficient. However, it doesn’t mean you can’t discover new markets in a recession. You can weather any storm by diversifying your product lines or client base. However, it is not the best way to spend thousands or millions of dollars advertising to prospects.
Networking with other executives and business owners can help you find new opportunities. Perhaps one of their vendors isn’t meeting expectations. You might consider forming a partnership if your company offers the same solution.
Perhaps a company wants to offer additional services but does not have the resources or expertise necessary to do so. They will need someone to help them with the initial rollout to continue delivering their current services. You may be able to diversify your business if your company has the resources to provide these assets. You don’t have to sell only to end consumers. Instead, you can create a business solutions department.
4. Tap Into Employees’ Insights
Employees’ anxiety about job security may rise as the economy shows signs of trouble. Stress from the workplace and home can cause staff morale to drop. Employees can be involved in the strategic planning process to reduce disengagement. Employees will feel more purposeful if they are actively engaged in developing solutions to keep the company afloat.
Employees’ ideas and insights can help you grow. Employees can see and hear how customers react, which benefits the company. You may find additional information from your staff that isn’t available through market research or customer surveys. Employees might point out a problem with the positioning of a product or identify a back-end issue that is frustrating them.
These problems can be turned into solutions, and market obstacles may be eliminated. Employees may point out that customers are more responsive to pricing structures that highlight the monthly cost of a product. Offering installment plans rather than requiring customers to pay the total cost upfront may increase sales. You can increase the variety of ideas and strategies by brainstorming with your staff.
Recession: Growing in it
Businesses of all sizes are affected by recessions. A slowing economy can lead to a decline in sales. Leaders who are willing to change their focus can still find growth opportunities. Growth marketing strategies and leveraging employees’ ideas are two examples of such options. Businesses can keep their revenue flowing by paying close attention to market changes and signals.