The last two years have been brutal on small businesses. The Presidential election, COVID-19 pandemic, massive shift in remote employment, and the housing crisis have all created instability for startups and companies with 50 or fewer employees. Sadly, when the economy is experiencing a downturn, one of the first things that small businesses purge is their marketing budget.
This is understandable. After all, as a small business owner, you need to allocate vital resources to staff compensation, product movement, operation overhead, and other ground-level expenses. However, even in a poor economy, it is possible to continue promoting your products and services so that you remain relevant in your market. Below we look at how to market your small business in a poor economy.
First, Learn Recession Psychology
Recessions have a tendency to create panic. This panic typically trickles from economic experts, political leaders, and, of course, the media, down to consumers and then on to business owners. The overriding feeling is that there is no more disposable income, lack of confidence in the future, lack of trust in business (including small businesses), and a drop in values that encourage consumption.
As a small business owner, overcoming this consumer cloud seems nearly impossible – but it isn’t. You simply need to have an understanding of two things:
1. Where Your Customers Are Mentally During a Recession
If you already have a solid grasp of your buyer persona, then you probably understand what drives their purchasing decisions and behavior. For instance, during an economic downturn, there are four basic types of consumers.
- Slam-on-the-brakes: They put a halt on all unnecessary spending until further notice.
- Optimistic but patient: Are confident about the long-term economy, but willing to wait it out by curbing some of their spendings – still spend some.
- Riders on the storm: Households with enough stable income to ride out the economic storm. They are likely to continue their current lifestyle, but at 80 to 90 percent of their normal spending habits.
- Live for today: Regardless of the economy or their financial situation, this group will continue spending as normal with no real regard of their financial situation down the road.
2. How Consumers in Any Category Prioritize Spending
Now that you have identified which type of consumer your buyer persona is, the next thing you need to understand is how they prioritize spending. Whether intentionally or subconsciously, consumers divide products and services into four main categories:
- Essentials – perceived as necessary for survival
- Treats – justifiable indulgences (the reason doesn’t matter)
- Postponables – purchases that can be delayed
- Expendables – unnecessary and unjustifiable purchases
Understanding the type of consumers that purchase your products and how they prioritize purchasing in a poor economy can help you create a marketing strategy that meets consumer needs – be it real or perceived.
Second, Learn How to Market on a Budget
Unfortunately, many small businesses go into hibernation when the economy crashes. As a result, they crash right along with it. However, you don’t have to stop marketing your business during a downturn. Instead, you simply need to learn how to make your marketing dollars go a lot further. If you have to market on a budget, here are some tips for promoting your business.
1. Know Which Marketing Channels You Can Still Use for Free
That’s right, some marketing channels are still accessible for free or at a drastically reduced cost. For instance, you can still post on your social media pages even if you don’t have the money for paid ads right now. You can also continue sending out emails, although it may require a little more manual work and some strategy. You can also continue printing flyers and brochures at a minimal cost. Figure out which marketing channels you can use for free and spend your energy using them.
2. Outsource Your Marketing
It seems counterintuitive to think that hiring a digital marketing agency will save you money. However, numerous studies have suggested that you actually spend less and get a higher ROI by outsourcing your marketing. Many digital marketing agencies have smaller marketing packages that actually produce better results than what you’re spending on marketing in-house.
3. Prioritize Your Marketing Campaigns
Just like consumers, you may have to prioritize where you spend your marketing dollars. You can start by prioritizing the strategies that are working best for your business right now. For instance, if Google Ads is driving traffic to your website, then you may want to keep it for now. Likewise, if your mail outs are converting more leads, then you may want to leave them untouched.
Last, Improve Your Marketing Management Skills
One of the reasons your marketing efforts are not working may have nothing to do with a sour economy at all. It could be that you need to do a better job of managing your marketing campaigns. Improving your marketing strategy typically begins by performing a comprehensive marketing analysis and then adopting a plan that reflects the analysis.
Ask yourself the following questions:
- When was the last time you conducted a full market analysis?
- How often do you assess and reassess your campaigns?
- Do you know what your actual marketing ROI is, or are you simply guessing?
- What tools (or people) are you currently using to perform your analysis?
- Are you monitoring your competition?
When every other company is going into panic mode during a recession, now is the time for you to educate and empower yourself by developing an effective marketing strategy. Doing so can help your business not just survive but thrive when times are tough.
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