As 2020 nears, there is ample discussion of whether the United States is headed toward a recession, with many signs pointing to “yes”. Though economists and industry experts are still split on the imminence of a 2020 downturn, preparing your business now can save you time, money and worry in the event a recession takes place next year.
We started our agency during the great recession in 2008 and since then, we’ve learned a thing or two on how to thrive when times are lean. No matter what kind of business you run, planning for slow times is critical for long-term success. Here are nine ways you can recession proof your business for 2020 and beyond.
1. Know Your Numbers
Most business owners have a good understanding of their company’s financial performance, but the best time to take a deep dive into your company’s numbers is while the economy is strong. Investigate your P&L statement, employees and merchandising costs, marketing ROI, and overhead costs. Develop an understanding of those things that are driving revenue for your organization and those that are not. Be prepared to make a decision on which things you can cut back should the economy take a turn.
2. Get Cozy With Your Customers
Do you know your customers? You should have an intimate understanding of their pain points, the times of year they tend to purchase and what products or services they buy most. Take some of your clients to lunch for a touch-base if you have not had the chance to meet with them recently. Anything you can do to get closer with your customers and better understand how you can support their needs will help make your business a must-have for them, whether economic times are good or bad.
3. Niche Down
Chances are you started a business because you were really good at one or two things. But when times are tough, there is temptation to begin offering more products and services, spreading yourself thin. Like the research that shows you are more productive when you focus on one thing rather than multitasking, your business is far better off performing one thing very well rather than trying to do many things with mediocrity.
4. Embrace Research
Put your email lists to good use with a survey to solicit insights from current, past and potential customers. Take advantage of feedback software that distributes post-purchase questionnaires to learn more about your consumers’ buying experience. You can also create your own free Google survey or an inexpensive Surveymonkey.com one to elicit feedback and insights. Responses can be a treasure trove of information for your business, from sales and marketing to operations. Those insights empower you to identify strengths and weaknesses while tightening up any “leaks” and amplifying those things your clients say you are doing well.
5. Focus on Forming Allies
Cross-promoting your business is an effective way to pump up messaging for you and other like-minded, complementary business. Working together to discover ways to support one another can help all organizations involved stay strong, even during a recession. This is an inexpensive, or even free method for getting your message out to target audiences you may not yet be reaching while strengthening brand loyalty.
6. Prioritize Third Party Validation
Recent research shows that 91% of consumers read online reviews, and 84% trust those reviews as much as they trust personal recommendations. If that is not reason enough to focus on third party validation, take note that positive online reviews also improve your website’s SEO and help it rank higher in Google searches, driving more people to your home page. Laying this groundwork now can make sure your organization is the go-to resource, even if a recession hits.
You can garner reviews after purchases by using software mentioned in tip number 4 above or by simply including signage at your business and messaging in your signature line asking your happy customers to leave an online review. These reviews can also be displayed on your website and used in marketing collateral.
An additional method for securing third party validation is through earned media opportunities. Having a trusted, local voice shine a spotlight on your business helps legitimize your organization as a trusted resource. You can amplify your earned media wins by posting the coverage your social media, featuring in your company newsletter or writing a blog for your website that links to the coverage.
7. Dial in the Customer Service
Make sure your customer service is in tip-top shape. A 2018 report showed that poor customer service costs businesses more than $75 billion (yes, with a “B”) per year. The same report noted that brands are failing to create an emotional and positive customer service experience, causing a sharp increase in consumers who are willing to switch brands because of a negative experience.
Create loyal brand fans through impeccable customer service. And don’t forget, social media is now a form of customer service, so make sure you are using these platforms to connect with your audience and are regularly engaging with comments, questions and feedback there.
8. Make the Most out of Existing Relationships
During lean times, people want to do business with those companies they already know and trust. Before a recession hits, make sure you are investing in and nurturing existing relationships. Connect with clients through handwritten notes or a simple email just to check in. Host special events where you can get face time with current and potential customers, and make sure you participate in local industry networking opportunities.
Word-of-mouth marketing is worth its weight in gold, and spending time on your relationships is one of the best ways to reap this reward.
9. Lean In
When times are tough, marketing is often the first thing to go, thought of as an extravagance rather than a necessity, but this could not be further from the truth. Henry Ford is attributed with saying, “A man who stops advertising to save money is like a man who stops a clock to save time.” Marketing can be the difference between sink or swim for a business during an economic downturn. When consumers are on the hunt for new buying decisions, your marketing efforts ensure yours is the brand they come across, rather than a competitor’s.
While other businesses may reduce marketing spend during a recession, if possible, your company should increase yours. This will result in strengthening the volume and share of your organization’s voice at a time when the competition has weakened its own.
Expect the Best, but Prepare for the Worst
Anticipating a recession can be a difficult thing to think about, but by preparing now, you protect your company while ensuring best practices are in place while the economy is still strong. At Rainmaker Integrated, we hope to avoid any sort of dip in 2020, but we are ready to help organizations prepare. If you’re interested in learning more about ways to recession proof your business and invest in your marketing efforts, reach out to us for a free consultation at 480-305-2017 or firstname.lastname@example.org.