Last month in our blog post “How to Recession Proof Your Business – Part 1” we defined “recession”, we talked about industry winners and losers and where that leaves small businesses. In Part 2, we want to give you some tips on how you can protect your business from consumer behavior changes during a recession.
1. Focus on the people that are on the fence.
When Reddit conducted their survey, they found three types of buyers:
- Loyalists who won’t change their spending habits and buying behaviors
- Budget-cutters who are gung-ho about eliminating unnecessary spending
- Fence-sitters who are a middle category of consumers that are on the fence about a range of personal finance issues.
So, in this market, if someone is a budget-cutter, it will be hard for you to convince them to buy no matter what discounts or specials you offer. Instead, you should focus on the fence-sitters. Those that have expressed interest in your business and are looking for a reason to buy or indulge, so give them a reason that makes them feel that they need to choose your brand.
2. Sell the benefits of your product or service.
You give people a reason to buy your brand by selling the benefits of your offering. Benefits are the emotional desires they’ll feel by choosing your brand. For example, having more time with family, achieving a certain social status, or becoming a thought-leader. So make sure your advantages and benefits of your offerings are readily visible; don’t just talk about all your features. All this information should be outfront, clear and concise so consumers can easily learn what you offer. If you’re on social media, promote your offering at least every 6th feed post so that your offers are always at the top of your feed.
|If you need help defining your features, advantages and benefits, contact us to book a sales coaching session, where we can do a “FAB Exercise” together.|
3. Be empathetic & use empathetic messaging
We are all in the same boat and your customer needs to trust not only your product/service, but also your brand as a whole. Acknowledge that you too feel the effects of being in tough financial times and that you’re here to make it easier on them.
4. Help people feel better about their indulgences.
During hard times, people will look for comfort in small things. If you’re a luxury or “nice to have”, throw in a little something extra to make people feel even more comfortable with their splurge. For brands, there’s an opportunity to tap into this desire by appealing to the sense of escapism that resonates with consumers during periods of economic stress.
5. Be flexible about negotiations and discounts
Don’t let customers slash you completely. Figure out ways in which you can still help them. Give them some level of value while still securing some of the revenue. It’s important that your customers feel that you genuinely care about supporting them in hard times despite what things cost. If you’re loyal to them, they are more obliged to stay loyal to you when times improve.
6. Prioritize Existing Customers
Acquiring a new customer can cost five times more than retaining an existing customer. Schedule check-in calls (do not just email!), coffees and catch-up meetings to remind them you’re there and ready and willing to help at any time. This also gives you an opportunity to understand how the recession is affecting them personally and professionally and could help you uncover even more ways in which you can support them and serve as a valuable resource.
And finally, the most important: Think outside the box! Some industries could struggle more than others, just like it will be harder for some people than for others. So take time to think about the recession-proof industries or people and consider whether you can target these markets with your existing or a slightly modified version of your product or service.
As many of us finally learned to embrace the 2020 pandemic as a time to reassess and reevaluate our lives, businesses and purposes, a recession can also be a time to sit and reimagine your business, operations and offerings to make sure you’re making the impact you really want.