The recession is coming! The recession is coming! The GDP is increasing at a slower rate. Bond funds are showing an inverted yield curve. Capacity utilization and industrial production is not particularly robust. Blah, blah, blah.
How do we really know a recession is coming? The economy is cyclical. Upswings are followed by downswings are followed by upswings again. What we don’t know is exactly when an upswing will decide to become a downswing. We do know that a downswing will eventually become an upswing again. The last official recession was from December 2007 until June 2009. Looking at the recent history of recessions, they typically occur seven to ten years apart. This is no scientific analysis. I’m a marketer, not an economist. Common sense simply tells me this, “We’re due.”
Now that we can all agree a recession is going to hit us sometime in the near future. What do we do when the recession does hit? How does marketing help?
Know your message. If you haven’t already clearly defined why someone should spend money with your business and what sets your business apart from the rest, now is the time. Your message should be simple and to the point. For example, “Our rust-proofing extends the life of your car.” Bonus points for showing good value in your message. When the economy is in turmoil, consumers are looking for the most value for their spending dollar.
Focus your ad spend. So many experts and articles will tell you that it’s very important to keep your marketing budget consistent or even increase your spending in order to increase your market share during a recession. (Get a larger slice of the smaller pie, so when the economy improves you will have a larger slice of a bigger pie.) I don’t think that’s always realistic for small businesses. Most small businesses already run very lean with their expenses and there are few non-fixed expenses that can be reduced. Marketing is one of those expenses that falls under the microscope when business is slow. Identify what marketing channels give you the best return on investment and focus your advertising budget and efforts there. It is crucial to continue to market your business during the slower times. In the case of marketing, silence can be deadly.
Use social media and email marketing to build your tribe. Social media is free BUT paid social media ads are much more effective, and they are relatively inexpensive. At the very least you absolutely need a social media presence, and if you can include paid ads in your budget, even better. Email marketing is also quite inexpensive. There are many services to choose from and all are quite easy to learn and use. Rather than ask every customer for their email address, ask them if they would like to join your online fan club (or something similar.) It’s important though, if you are going to send your customer base emails, that you are providing something of value to your customers. If your emails are non-stop sales offerings and asking for more businesses every time, you’d be better off not to send emails out at all.
Talk to your sales reps at your media companies. Ask for their help either through reduced rates or no-charge bonuses to get you through the slow down. Your success is also important to your media partners. They know that if you are no longer in business, they are also losing a client and your revenue. Be up front and honest with them. Agree to a specific time frame (six months, one year) for the reduced rates and then a return to normal rates. Remember, they will work with you but media companies also have a business to run, employees to pay and a head office to answer to. Working together as partners to get through a recession will ensure your mutual success.
Use marketing to increase your average sale. As fewer people come through your door, it is important to encourage each customer to spend more. For example, “With every rust proofing treatment, we offer windshield water repellent treatment at half price. Be safe when driving in the rain.” Higher margin add-ons will help your profit margin when you are seeing fewer number of sales.
The recession is coming. When it will arrive and how long it will last is anyone’s guess. But with some effective marketing and a dose of reality, your small business can come through the other side intact and dare I say possibly stronger.