Inflation is up, interest rates are rising, and the economic outlook looks a little sketchy.
This is when many small and mid-sized businesses take to the mattresses. They eliminate jobs, reduce employee hours, and cut back marketing efforts. The goal, of course, is to hunker down and weather the rough times. Unfortunately, these practices also inhibit growth, which can lead to stagnation and loss of consumer interest. The result is often the very thing businesses hope to avoid.
It is possible for small and mid-sized businesses to be successful and even grow in a down economy. A recent Forbes article points out that “many of the world’s greatest companies were built during recessionary times,” including General Electric, IBM, Trader Joe’s, and Microsoft. Downturns are an inevitable part of the economic cycle. However, business growth is possible in a down economy. It requires adopting a mindset that looks for opportunities in difficult times.
“A down economy is a good time to take a step back and assess,” said Elizabeth Eiss, Founder and CEO of the talent curation and freelance recruiting platform ResultsResourcing. “Business owners can look at what is profitable and not, focusing their time and energy on the highest ROI activities. This means determining what core operations are essential to delivering customer value, what non-core tasks they can accomplish another way or even do without.”
Fewer competitors
For those forward-thinking companies, one benefit to other businesses adopting a “hunker down” mentality is less competition.
“When others pull back, that is the perfect time to look for opportunities, such as new markets to enter, new services to offer, and new partnership prospects,” said Eiss. “It’s also an excellent time to reach out to current and potential customers. Find out how the economic downturn affects them and how you can help. It’s a perfect opportunity to serve and build customer loyalty, especially as other companies de-emphasize customer service and experience.
“The idea is to meet your clients where they are right now.”
More available eyeballs
Fewer competitors also mean that it is easier to catch the attention of your target audience.
There are some beneficial steps that small and mid-sized businesses can take to increase customer loyalty during a down economy.
- Create reward programs.
- Reach out to provide money-saving tips for effectively using your services.
- Partner with complementary businesses to create bundle offers that provide tangible benefits for your target audience.
- Create a customer referral program.
- Actively follow and support your customers’ social media.
- Partner with your best customers by creating social media posts highlighting their business.
Focus marketing efforts on what works
During boom times, marketing can be flashy and less focused. However, when the economy turns, it’s time to reevaluate your marketing efforts. That does not mean abandoning all marketing; it means focusing your efforts exclusively on programs with the highest ROI. To determine these programs:
- Carefully track Google and social media analytics for all of your online business presence.
- Research other methods besides ads to offer value, such as articles, checklists, videos, and newsletters.
- Discover new ways to network, including online and business groups.
- Utilize paid ads as a last resort, and carefully monitor their effectiveness to ensure they reach your intended target market.
Streamline operations without negatively affecting customer service
During an economic downturn, it may be necessary for small and mid-sized businesses to pull back and reduce some of their services or operations. The crucial part is to do so thoughtfully so, as far as your clients are concerned, there is no disruption to their service.
“Start by reviewing positions within your company and determine which ones are core roles and which are non-core,” said Eiss.
Core roles directly drive customer value. These tasks impact business performance. Non-core roles are positions that support core work. Important but non-core examples include marketing, social media strategy and administration, copywriting, graphic design, and website design and support.
“Core work is likely done by employees,” said Eiss. “Non-core work is ideal to outsource to quality contractors. This frees up core employees to focus on customer value delivery. This is how small and mid-sized businesses can grow during a down economy without sacrificing quality. Using this nimble talent strategy, companies can scale up and down based on demand for their goods and services. It provides some much-needed agility and access to a massive skilled talent pool during uncertain economic times.
There are always growth opportunities, even in a down economy. Is your business prepared to grow? Use our FREE ROI Calculator to find out.
