The word “recession” is often feared by almost everyone, especially business owners, and lately we seem to be hearing that dreaded word with increased frequency. Recessions can happen at any time, and successful business people know how to weather these economic storms.
While most people are apprehensive during a recession, or the threat of one, I will demonstrate how you can succeed in any economy. It is also important to realize that ups and downs are part of the normal cycle, so there is no need for fear. The following principles and strategies are not just for a recession or economic downturn, they are for any economy, but are especially important right now as concerns of a recession loom over us.
The very first step is to develop an attitude and mindset. Think briefly about other businesses and your competition. Even in a good economy, at least 80% will fail in five years or less. With failure rates that high, the majority is obviously not always right, so you cannot afford to think like them. I recommend reading books written by proven leaders so you can adopt the right thinking.
One pitfall to recognize as you are reflecting on other businesses, is that they are generally reactive instead of proactive. To beat the odds, you need to plan your success rather than react to circumstances.
It is beneficial for you to realize something else that easily gets missed when considering economic conditions. Consumer spending is not as volatile as we’re usually led to believe. Even in a slow economy, people still spend money. Your job is to find out what motivates them so they spend it with you.
Another extremely important principle is you must remove failure from your options. If you don’t, you will easily gravitate toward making excuses for failure and allow it to happen. You may have setbacks, but failure only happens when you give up. The economy is not a valid reason to fail.
The second step is to develop a strategy. When the economy slows, many business owners respond by cutting back. That classifies more as a reaction than a strategy. That reaction can be very detrimental, especially when cutting back includes marketing and advertising. Those who react this way may not survive a recession, much less come through strong when the recession is over.
You may very well need to make adjustments in your business to grow stronger. A brainstorming session can be very helpful. Customer surveys, both formal and informal, could provide valuable information, too. Look for opportunities because they always exist.
Once you identify opportunities, then developing a strategy will help you seize those opportunities. Focus on what motivates people to buy, identify who should buy from you, and then convince them to buy from you. With that, you will have a winning strategy.
People buy for one or more of the following reasons:
To make money.
To save money.
To save time.
To make things easier.
To make them feel better or satisfy a desire.
To solve a problem.
To take away pain.
Once you know which of these you can use, or which combination of them, then it’s time to get your message out.
Let me use a simple example to illustrate this point. Several years ago when there was a recession, the makers of A1 Steak Sauce® made a very wise decision. They reasoned that people might not buy steak as much during tough economic times, which could hurt their sales. So they launched an ad campaign touting the merits of using A1 on burgers to make them taste better. That strategy worked great, and sales went up.
The third step is to realize that marketing is not just for big business. Many times, small business people have the perception that they can’t afford marketing. Marketing is not the same as advertising. Advertising is part of marketing. The steps above are part of the marketing process. Marketing also involves creating a perception of how your market views your product or service, both in what you say, and in what you do.
Every business is actually marketing whether they realize it not, and whether they are good at it or not.
One piece of marketing material that very few businesses can afford to be without anymore is a web site. Even if the web site is not selling directly by having “Buy Now” buttons, it is either creating sales or missing opportunities. Buyers frequently research on the web before making a buying decision, including offline purchases.
Businesses with informative web sites that have been professionally designed have a serious advantage over those that don’t. This is even more crucial when finances get tight and people need more confidence about their buying decisions.
Perhaps the most important factor in marketing is being different from your competitor. Your customer must have a good reason to choose you. If all things are equal, then you are forced to have the lowest price to win. If the value exceeds the price, then you don’t have to be the cheapest.
That brings us to what not to do. Just as most businesses fail, there are some things that are commonly done in business that you should not do. Following conventional wisdom and reacting the same way as most others will produce the same results that most others are getting.
I’ve already mentioned that cutting back on marketing and advertising is a bad idea. When the market is down, that’s when you need to be the most aggressive. Those who are the most diligent win in any economy, but especially a tough one. Besides, when things turn back around, the strongest get stronger while the weak have an even greater disadvantage.
Another popular practice that belongs in the bad idea department is price slashing. There are many things that influence buying, and price is only a small part of it. As long as the value exceeds the price, selling is not a problem. I believe the primary reason price slashing is so popular is because many decision-makers fail to realize how to create value. Slashing prices is a very dangerous practice because it degrades value and digs a deep pit that often ends up being a grave.
In your marketing materials, do not talk about yourself. Think about all those brochures you read where they tell you about all of their awards, when they built their building, and how Grandpa got a flat tire on his first day in business. Those things are understandably important to the business, but to sell a product or service, you need to let the buyer know how it will benefit him. Avoid anything that does not directly address the needs of the customer.
This one may surprise you, but no not use production artists. For example, if you advertise in publications, do not rely on staff artists to design your ad. Think about this logically. The same person is laying out ads for all the advertisers who take advantage of the “free” design service. It’s free because it’s worthless. You want your ad to stand out!
Many print shops will offer “design” services. If they design a brochure, what you most likely will get is your logo proudly displayed on the cover. I’m sure your logo is great, but unfortunately, it offers very little motivation for someone to open the cover. You need a cover that compels someone to read what’s inside. Production artists rarely have the time or the skill to create something truly effective.
And now the conclusion… Basically, you need to have a sound mindset and expect to succeed. Identify an opportunity you can seize, and devise a strategy to take advantage of it. Do not mimic your competition, but be the better choice for your target market. Know who your target market is and what is important to them. Understand what motivates people to buy and provide the solution. Make sure your marketing materials provide a clear, consistent, and effective message. Work with people who understand marketing. Just because someone is an artist does not mean he knows marketing. Every aspect of your business should reinforce your marketing message. Success in any economy relies on having the right message, getting your message out, and then delivering on your promises. You can learn other great business strategies by taking online courses in business.