Director, Content Marketing
Plenty of business owners are panicking as they struggle with recession dread and debate whether or not we’re headed into an economic downturn. No matter what you believe, most small businesses are facing difficult challenges: inflation, labor shortages and supply chain issues, to name a few. Despite all the economic unknowns, you can still prepare for the future, recession-proof your business, and breathe a little easier.
Follow these six recession-proofing steps to help keep your small organization safe and financially healthy:
Step 1: Strengthen your relationships with customers
When learning how to recession-proof your business, keep in mind that no company will succeed without the support of loyal customers. Many of us working in marketing, sales and customer service feel fulfilled in our jobs, partially because of our ability to appeal to customers on a regular basis.
Strengthening relationships with new and existing customers can involve everything from offering exclusive deals to loyal customers (like a loyalty program) to personally answering questions from clients who need help with your services.
When it comes to sussing out how to recession-proof your business, particularly in terms of customer service and support, CRM can help you more easily provide individuals with personal attention, support and rewards. Your customers have high expectations for you — and when you don’t have enough bandwidth, it becomes tough to meet those expectations on your own or manually. CRM software can help you strengthen productivity and communication, as well as increase sales.
A CRM feature that comes in particularly handy is bulk email (like email marketing campaigns that are sent to a large number of recipients). Let’s say that you're a marketing manager for an athletic company. You notice that some of your loyal customers haven’t bought any new items for several months, so you send them a “just-checking-in” bulk email. Sending this type of message will remind people about the high-quality products you offer and inspire customers to re-engage with your brand. Making use of CRM data can also help you know exactly how and when to reach out to customers.
Data in your CRM system lets you keep tabs on customers that have been inactive or out of communication, as well as accounts that recently completed an engagement and may be interested in additional services. Using custom fields and tagging, or pipelines, your CRM platform allows you to filter lists of customers that fit into different buckets. From there, you can develop campaigns to engage these lists with content that’s personalized to their specific situation.
Step 2: Take advantage of free tools
Whether in your business or in your personal life, cutting costs and expenses is one of the easiest actions to take during a financial crisis — and as a business owner, it can help you avoid the painful step of layoffs.
Many modern recession-proof businesses use the latest marketing tools to stay ahead of competitors. But these tools can cost a pretty penny, meaning companies run the risk of exceeding their marketing budget. The good news is that there are plenty of free marketing tools that offer valuable features that can even rival paid software. While locating such tools will require research on your end, if it helps free up more funds in the process of recession-proofing your business, it’s likely worth the effort.
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Step 3: Invest in the right tech and reevaluate retainers and subscriptions
Some paid tools might be too essential to give up, which makes it all the more important to invest in the right technology. This includes a CRM system that helps minimize manual data entry and increase your entire team’s efficiency.
As you continue to evaluate what you need to do to attract new customers, it may also be a good time to reconsider which roles to keep in-house versus outsource. Many organizations work with external marketing and/or PR agencies that tend to have costly retainers. Take the opportunity to reevaluate these engagements and determine whether any of these responsibilities can be brought in-house, like design or copywriting. Alternatively, consider hiring individual freelancers, who often charge less — though they may need additional supervision.
After evaluating your existing tools and resources, review your business’s monthly subscriptions. Over time, organizations tend to accumulate numerous paid subscriptions for different software and products – and all too often they lose track of the tools they’re no longer actively using. Conduct an audit of recurring payments that appear on your bank statement(s) and make a list of all current business subscriptions. Once you’ve compiled the list, cancel anything that you no longer need.
Step 4: Use upselling and cross-selling to boost revenue
Upselling and cross-selling can positively contribute to recession-proofing your business. Upselling involves successfully persuading someone to upgrade to a higher-tiered program or plan than they already purchased or are thinking about purchasing.
Let’s say you work for a creative agency. A prospect is considering a basic monthly social media package that includes posting twice weekly on one platform, such as Facebook and Twitter. Your salesperson could explain that the basic package won’t get them nearly as much exposure to build brand awareness as a larger package that includes posting four times weekly across three different platforms. By successfully selling a higher-priced offering, upselling can help both increase your revenue and lead to higher levels of customer satisfaction in the long run.
Cross-selling entails selling additional services or products to prospects beyond what they’ve already purchased or are currently paying for. For example, consider a consulting firm that’s engaged with a family-owned business for a Leadership coaching program. When the lead consultant discovers the current owner is planning to retire in two years, they’re able to cross-sell the client a Succession planning package to help the company prepare for the transition in leadership.
To master upselling and cross-selling as the owner of a recession-proof business, create a clear action plan with specific targets. Develop concrete key performance indicators (KPIs) that are ambitious but attainable, like “close $10K in upsells or cross-sells in Quarter 3.” Set and record your goals before the start of every quarter to help hold you and your team accountable, making it easier to stay on track and keep everyone motivated.
Identifying the right customers to target for upselling and cross-selling opportunities is also critical to succeeding at this initiative. As we mentioned before, CRM data lets you segment current customers for targeting based on criteria such as last date purchased. But a long-term customer engagement strategy is also key here, which often involves tactics like email newsletters. By sharing engaging and educational content with your client base on a regular basis and showcasing new features or offerings in your newsletters, people will be more likely to keep your company top-of-mind — and those customers that are interested in additional offerings will have a quick and easy avenue to get in touch.
Step 5: Field feedback and adjust offerings to meet customers’ changing needs
Just like automakers are constantly redesigning car models to improve features and technology, successful businesses constantly evolve to keep up with their customers and the broader market. Listening to the people who know your offerings best — your customers — will help you make informed decisions about improving the quality of your products or services and satisfying your customers well beyond their current expectations. Start by fielding customer feedback to determine where to make improvements, whether big or small.
Outside of talking to existing customers, speaking with your peers or industry leaders gives you different perspectives on the current market landscape.
The feedback you receive from customers and thought leaders should go a long way in helping you strengthen the customer experience as your company works to become a recession-proof business. As prospects move through the customer journey, consider all the information you learned from your research. Making sure people have the right resources to advance their knowledge and help maximize their success with your offering will make a big difference in improving the customer experience.
For example, a technology company might build a resource hub or customer community to give customers immediate access to information that they can engage with on their own time. Contributing to your clients’ ongoing professional development gives them another reason to stick around.
Create lower-priced offerings
Sometimes, upselling and reducing costs won’t cut it. If you find that business development efforts that worked for you in the past are no longer leading to conversions — or not as many as you’d projected — price may be a factor. Perhaps you even received feedback during customer research suggesting that your customer base is becoming more cost-conscious. Consider creating lower-priced offerings to help meet clients’ shrinking budgets. This doesn’t mean watering down your offerings, but simply cutting back on what’s included in your programs or packages. Sure, it’s easier for certain types of businesses to make price adjustments than others; but if you can’t offer lower costs, consider running a limited-time promotion or sale instead.
The main goal here is to get new customers through the door, and then work to nurture them and identify upsell or cross-sell opportunities down the line once they’re confident in the value you bring to the table.
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Step 6: Study data to inform business development initiatives
Use data to make informed decisions about your business. Data-driven sales forecasting techniques allow you to predict sales based on current sales pipeline data as well as historical data. Use your CRM platform to look at how many opportunities you have at each stage of the sales pipeline. If the top of the pipeline is light, you’ll likely need to invest more time or resources into outreach to bring in a larger volume of opportunities and ensure your pipeline stays full. If prospects are falling off at the middle of the pipeline, then it’s time to dig further into the data to see what barriers are standing in the way — and adjust efforts accordingly.
When the market is rocky, it’s also important to keep close tabs on industry data and look for notable shifts in your specific market. Maybe demand has shrunk, or perhaps consumers’ needs in your niche have changed. For example, if fewer people are shopping in the mall, then your children’s clothing boutique may see business slow — strengthening your e-commerce presence can help boost sales. Consider whether a larger pivot is warranted to keep up with industry changes.
Analyzing other data in your CRM can help inform adjustments to your sales processes and marketing campaigns. For example, by evaluating lost opportunities, your team can identify patterns and then devise a strategy for counteracting certain factors that are negatively affecting your sales. If you realize that many prospects who drop off before the sale are going to a specific competitor, you can build more straightforward comparison points into your sales scripts and marketing efforts to clarify the advantages of your solution over the competition.
Speaking of competition, it may be worth performing a deep-dive competitive analysis to identify your competitors and analyze how their marketing, corporate structure and products stack up to yours and identify fresh opportunities for business growth. Study competing products or offerings as well as your rivals’ marketing and sales initiatives and customer experience and identify gaps that your company can fill. Taking it a step further and performing a marketing SWOT analysis can then help your team focus on addressing specific threats and opportunities in the market.
Keep calm and forge ahead
By following these recession-proofing steps, your business has a much higher chance of succeeding in the face of financial obstacles and uncertainty. With increased workforce flexibility and more accessible and affordable technology, it’s possible for small business owners to persevere during difficult times.