Updated: Jan 26, 2019
What should you do to survive the next recession? This article will give you some ideas.
What Goes Up Must Come Down as the idiom coined in the 1800s goes. It coined as a reference to gravity, but it is true for pretty much anything, including economy.
After the last recession, things in the US economy went up stream for a nice long period. Because things went up so nicely, and not only in the USA, the word "recession" is now a hot topic. On December 2018 people thought the recession has come.
It's pretty clear there will be a global slowdown, which is natural, but fear drives irrational behavior which can make an already volatile house of stocks tumbling down even if it shouldn't. "Panic, which is fear-driven and not based on fact but on emotion, has tremendous power, the power to change the direction of business." sais Donald Todrin on Entrepreneur magazine article.
With the US federal government partial shutdown, the declarations of banks and institutions about clients' pull out, the tension in France, and the Brexit, things look very uncertain.
Some say the recession is inevitable and will come this year or the next. No one can predict the future, but they can get ready.
To get ready for a downturn in the market, or a recession, you should start work on your branding. Yes, it sounds strange, but a strong brand can help your business traverse the next recession. Brand awareness and positive brand equity helped brands in the past and it will help every time there is big uncertainty in the market, because if people believe in your brand, if you have great brand awareness and brand equity, you will find support in hard times from both your customers and financial institutions.
People seek relationships and trust more than money, and good branding is about creating relationships. That's why you need to shift your marketing thinking towards branding activities.
Lately, marketing budgets in the UK stall as a sign of the stress and fear of an economic slump caused by Brexit.
Usually, during times of uncertainty businesses cut their long term marketing while pushing more on short term marketing.
Long term marketing activities are about brand awareness, longevity, and sustainable growth, and short term marketing is about immediate sales. The push on getting as many sales as fast as can be is understandable, but it is an irrational business behavior just like selling all your stocks when the market shows all red.
Pounding on the sales team to make more sales is always good, not only when you think the market is going to shrink or crash. But panicking and having too many sales, and spending on sales campaigns is not the right thing to do if you want to still be in business after the recession.
Due to a widely spread misconception, branding is perceived as expensive and elaborate design work only the big players can afford. Most business owners see branding as a luxury, but the truth is that branding is not about design at all, it is about building relationships and trust. Good branding work inspires. When done right it is money well spent for a very long time. A well defined brand strategy can save you money for years. In today's world of commerce, it's a make or break. Due to the lack of understanding of branding concepts and fundamentals, most businesses don't invest in branding and brake.
Usually, when the boss is stressed about sales, he forgets about trust, about values, about the brand's promise to its customers. The ego raises its ugly head and he starts thinking about the brand and not about the customers. This kind of thinking kills businesses, today more than ever.
So what should you do to survive the next recession? Think about the customer, not your business.
Now, it's important to understand, this is not for the cynical business owners who just want to make a quick buck, care about themselves, and don't really think long term to begin with. If that's your bag, this strategy is not for you.
To survive the next recession, you need to create trust. Trust creates relationships. Trust creates positive word of mouth, and in times of tight budget, what's better than happy customers giving your brand a shout out on social media? Social media content is not expensive and can drive sales and brand awareness.
As long as you don't try to sell, organic content and activities will make wonders for your brand. Put the customer in the center, and focus on communicating your brand value proposition on all touch points. There are many of them: website, newsletter, emails, packaging, ads and so on. You already spent money on them, so utilize them for customers retention and strengthening your brand. Retention is much more beneficial than customers acquisition.
Change your newsletters from repeatedly writing about your product's features or how good your service is. Write about how your product or service helped a customer, give your customers tips. For example, if you sell light bulbs, send them a cool video how the bulbs are being made, send them tips how to save money on electricity, if you sell teeth whitening laser treatment, send tips how to whitening teeth with household products.
Automated emails are great for sales, but use them for more than just up-sell or abandoned cart retention. Use automated emails to give, not take. Again, don't make the customers who get the emails after visiting your website feel all you want is their money. Tell a story they can relate to, a piece of valuable knowledge instead of reminding them you want them to come back to your website and spend money.
Make as many DIY and tips videos, and post them on YouTube, Instagram, send them on eblasts.
Create CTAs (call to action) that are not "click here to buy". If you use the word "buy" when money is tight, you kill conversions. In fact, you should show examples how you save your customers money, even if it's not directly. Set a contest with your customers so they will post how they save money using your product or service, then you should use this UGC in all your brand's relevant touch points. You can link from a video post on Facebook showing how a customer saved money, to the blog where the full story is, and use the text "click the following link to save money" or "link to learn how you can save money too"
Use PR. It is cheaper than advertising and is better for SEO. A good story can send tons of traffic to your website.
Have the best customer service you can. Really try to be helpful and solve your customers' problems.
A brand has a community it serves. Find your brand's community and a way to help and inspire it. Support the community, connect with the people on an emotional level. People connect with people, so the more human-like your brand is, the more people will trust it. This will increase your business' chances to be here after the next recession.
So act, don't react.