Lauren is the CEO of S&G Content Marketing, an agency that helps brands build industry-leading thought leadership and customer engagement.
The word “recession” may strike fear in many business owners. But if your gut instinct is to slash prices, halt product development and stash unused budgets in a rainy day fund, here’s the unfortunate truth: Reacting—rather than taking a proactive approach—can hurt you.
While you can’t change the fact that some consumers are tightening their purse strings, you do have a choice about how to pivot your business accordingly. In fact, with proper planning, resource allocation and strategy shifts, smart brands not only can stay afloat during turbulent times but also win market share when the economy bounces back.
Strengthen relationships with key customers.
In a recession, building and maintaining strong relationships with your customers is more important than ever before. The key is to adapt to changing customer needs and find opportunities that build trust, whether that’s by:
• Creating valuable, no-strings-attached content that helps you build thought leadership and expertise in your industry.
• Offering added-value products or services.
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• Investing in processes, infrastructures and technologies that provide a better customer experience.
Invest in brand marketing.
History has shown that companies that increase advertising initiatives during economic downturns can snag market share from more conservative competitors. That’s right: With businesses shrinking their marketing budgets across the board, brands that invest in brand awareness campaigns benefit from lower advertising costs. While this strategy may not immediately result in a sale, it will contribute to higher brand recognition when consumers are inevitably ready to spend again.
During the 2008 recession, McDonald’s not only managed to stay afloat but grabbed a significant amount of market share from its competitors, including Burger King and Yum Brands (which operates KFC and Pizza Hut). The key to McDonald’s success? It wasn’t just a low pricing strategy (hello, Dollar Menu!), but a shrewd marketing strategy that involved taking advantage of cheaper TV ad rates. Without having to substantially increase its originally planned ad spend, McDonald’s seized the opportunity to blast promotions for new products and reinforce its selling position to its target customers, who, unsurprisingly, had become more price-conscious.
Pro tip: When it comes to finding the budget and resources for marketing, be creative with what you already have. For instance, repurposing existing content into something new can reduce production costs and keep your content fresh.
Use technology to boost productivity and innovation.
Here’s a fun fact: Groupon, WhatsApp, Venmo and Uber were all founded smack dab in the 2008–2009 recession.
Instead of panicking and cutting costs in a way that will hurt your brand long-term, use the downtime offered by a recession to be more productive and innovative so you can bounce back faster when the recovery comes. One way to do that? With the right technology!
Having robust project management software and automations in place can translate to more seamless processes that boost your team’s efficiency. Similarly, social listening and search behavior monitoring tools can help you spot new trends ahead of your competitors—as long as you move quickly to capitalize on what you uncover.
Prepare for a change in demand.
While these tactics can go a long way in helping you prepare for a recession, there’s no sugarcoating it: You will likely experience a change in demand, which can be confusing and discouraging to navigate.
Hiring experts to help you plan ahead can empower you to make smarter choices about where your business should invest its time and money, saving you from making rash decisions. Similarly, business intelligence software and customer relationship management systems can identify changes in customer behavior before they become noticeable, giving you the necessary heads-up to adjust your strategies accordingly.
Most importantly, the best way to tackle any market change is to develop a plan that clearly outlines your goals, milestones and budgets. Use this as a starting point to review production processes and staff competencies to prepare your business for any changes in demand or supply and pivot as needed when charting through unpredictable times.
An economic downturn can be a massive opportunity to rethink strategies, build relationships, invest in your brand and significantly increase market share. Remember: Winners are never passive; stay agile and don’t be afraid to take some risks!
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Author: Lauren Fairbanks, Forbes Councils Member