Recession-Proof Your Business: Top 5 Rules to Abide By
Recession is a phenomenon that can break at any time without any prior notice. Businesses, in 2020, must be ready to face the brunt of economic slowdown, as the entire 2019 predicted the succeeding year to be at the onset of a recession.
Considering the statements made by the US economists about the economic slowdown in 2019, the fear of investing in the market stayed in the Americans during the entire year resulting in a decline in market investment from 41% in Q1 to 34% in Q4.
As per a November 2019 Statista report, 50% of respondents aged between 18 & 29 in a survey conducted in the U.S. said the next recession to hit America will be serious. However, only 36% of those surveyed in the age group 65 & above agreed with the same.
As high as 400,000 small businesses went bankrupt in the last economic recession in the U.S.
Keeping the above-provided facts in mind, making your business recession-proof should be your top priority. To achieve the same, you need to craft a marketing strategy now that could save you in times of hopelessness and despair. One must always be ready with their recession business strategy framework. You need not wait for the stocks to dip, or a recession to be officially announced.
Here Are the Top 5 Rules to Abide by To Neutralize the Effects of Recession on You
1. Don’t Irresponsibly Lower Down Your Marketing Budget
2. Measure Your Target Customer Base’s Recession Behaviour
3. Track & Re-Analyse Things from Scratch
4. Keep Your Centre of Attention on the Existing Customers
5. Tweak Your Marketing Strategies to Optimize Conversions
#1. Don’t Irresponsibly Lower Down Your Marketing Budget
The marketing budget is typically the first thing that a business owner thinks of cutting down onto, which proves to be one of the bigger mistakes in the long run. It’s a well-established fact that slashing marketing expenses during the recession only results in defending profits for a short period. Eventually, the brand will come out from the slump weaker than ever.
The way out is maintaining your brand presence during these tough times. And that is why the organizations having a robust branding in the market withstand the repercussions.
#2. Measure Your Target Customer Base’s Recession Behavior
Not all customers behave the same during times of economic slowdown. Customers belonging to different income segments do not behave the exact same during the times of recession. You need to study carefully the behavior of the target customer base in this period of time.
Here is a true-life example to depict the non-conforming behavior of customers of a specific income group in the automobiles business vertical during the recession:
A business owner in the high-end luxury automobile domain thought he has got the perfect marketing plan for the recession times, as he had his business grown in the early days of the internet. He had an MBA from a top business school, and thus, had watched the market very closely.
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When the crisis hit his business, he didn’t worry, thinking he knew his customers. He thought his customer base in the luxury segment will avoid the high-luxury range of vehicles, and instead, will prefer mid-grade luxury vehicles over the former as the same had happened the last time during the recession.
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And therefore, he soared upon his stocks in the mid-grade luxury line and adjusted his marketing strategy accordingly.
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To his shock, it proved completely disastrous, as his existing wealthy customer base did not cut on their automobile spending, as it’s a one-time spend, and his rich customer segment was not too wary of spending big on such lifestyle-defining possessions.
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Besides, the new vehicles he had filled his inventory with proved too expensive for the general customers. As a result, his high-end clients got inclined towards competitors for purchase, and his business took a severe hit.
#3. Track & Re-Analyse Things from Scratch
Reassess your digital marketing strategy and the leads and conversions being generated out of them. Identify your best-performing marketing strategies based on metrics observed on an analytics platform, such as Google Analytics. Find out the marketing initiatives taken that are not working, and quickly scrap them to lower your spending.
During a recession, an intelligent business strategist would find out his best marketing investment that is yielding an optimal ROI. He will use digital marketing as his primary weapon during these difficult times as it is a low-cost, high return strategy with easy measurability & targeting.
#4. Keep Your Centre of Attention on the Existing Customers
Irrespective of which industry you fall into, during the economic downturn, your most valuable asset should be the existing customer base. Ensure to have your business strategy framework revolves around them. Put all your might behind serving your loyal and happy customers. Ultimately, these loyal communities of customers will repay you by providing recommendations and positive reviews.
#5. Tweak Your Marketing Strategies to Optimize Conversions
A business strategist with a good marketing acumen would tweak his old strategies to extract the best out of them. A little tweak in campaigns on the web can lead to drastic changes in revenue-collection. After every change, one needs to test it for results obtained, thereby finding the best-performing strategy.
Make brand new strategies and test them for success and cost-effectiveness. Any campaign on digital can be tracked. Know the statistics, and formulate your next change based on the figures recorded while doing campaign analysis. The more the data, the better the opportunity for improvement.
Once you have found the best-working strategies, repeat them to bring
Originally published at https://www.thebaynet.com.
