19 Aug Investing in your Business Amid Recession
There’s no denying that we’re in the midst of an economic recession. Americans in particular are cutting back on spending as they plan for a downturn that might not end until the coronavirus pandemic is over. But even in the middle of an economic slump, there are opportunities for businesses to ensure their continued success by investing in areas their competitors aren’t able (or willing) to focus on. Today we’ll share some tips for identifying and taking advantage of these opportunities!
Understanding the customer mindset
In a recession, your customer base is going to be all over the map in terms of purchasing ability. Unfortunately, a segment of your base will likely find their total income diminished and unable to continue purchasing items with discretionary income. However, a portion of your base will find their circumstances less affected, or possibly improved by the economic downturn, and in fact may have more discretionary income. For instance, amidst the current epidemic travel, dining and entertainment experiences and the like are not possible, so customers who would normally have a wide array of choices on where to spend their discretionary funds now have fewer places to do so. This means more money can be spent on supplies and activities that they can do on their own – crafting has never been better positioned!
This article from the Harvard Business Review, though written back in April 2009, still offers valuable insights on how to understand your customers’ mindset and how best to market to them.
Although your first inclination might be to cut your marketing budget, now is the time to strategically place your products and services in front of customers who are looking for new products and activities. This article from Forbes gives several reasons to continue to advertising amidst a recession:
- The general “noise level” in the industry drops as competitors cut back on their ad spending. This gives you room to fill that void, and even reposition your brand to capture a larger market share.
- You can project to your consumers the image stability during challenging times – despite what’s going on in the world, you can reassure your customers that you’re still here for them!
- Advertising costs generally drop during a recession. You may find opportunities open to you that you couldn’t previously afford!
- When you cut back on your ad spending, your brand loses its “share of mind” with your consumers, and that means you may be losing out on sales. An increase in “share of voice” typically leads to an increase in “share of market.” You may be able to increase your share of the market and, in turn, your profits!
Investing in long-term infrastructure
If you have the resources, now is the time to invest in your long term infrastructure. Whether that’s upgrading your point of sale system to handle online sales, revamping your website, or enabling other shopping opportunities (Facebook Shops, Pinterest Catalogs, Instagram Shopping etc.), any enhancements that make it easier for customers to purchase your products and services from the safety and comfort of their own homes will expand your reach.
During this pandemic, crafty businesses who have greatly expanded their online communities have enjoyed a steady income (and for a few of our clients, improved income!) despite the uncertain economic forecast. Whether that’s investing in resources like Zoom to hold virtual events, creating Facebook Groups where customers can congregate and share experiences, trying your hand at videos or “live” events on Facebook or Instagram, those who are working to create tightly-knit online communities are prospering.
Developing Timely Content
As a crafty entrepreneur we know that your time is limited. But if you find yourself with spare time due to retail closures, there are still plenty of things you can do! One of the best ways to remind your customers you’re there is to create valuable content for them.
Blogging is still a great way to create cornerstone content, informative articles where you share your expertise and help educate your customers. The bonus is that most of this content is also evergreen; that is, it doesn’t expire and will be as useful three years from now as it is today. Design content that your customers are looking for: inspiring projects, your best tips and tricks, and explanations of techniques they’ll need to create those projects.
We always say your email list is worth its weight in gold. While social media platforms are popular, you never know when they may disappear or fall out of favor, but your email list is something you can control. Work on developing the right message to reach the right customer at the right time.
This can take the form of automations (do you have an automatic welcome message for when your customers sign up for your email list?), or spending some time segmenting your customers based on their preferences and developing messages that cater to those preferences. Even in the age of endless email, an expertly crafted and timely email can produce great results (see the notes on direct mail in the Advertising section).
Email also produces the best trackable ROI (return on investment) of all the marketing opportunities. If you have link tracking enabled in your email platform, you’ll be able to determine which sales resulted from a specific email. Do that a few times and you’ll have an idea on what kind of content you create is most profitable to you!
We hope these tips give you clarity on where and how to spend your time and resources during the downturn. Even though your instinct might be to slam on the brakes, a recession can be an excellent time to put your foot on the gas and gain market share when your competitors can’t.
For help in strategizing where to invest for maximum impact, or executing on some of the items