As we all know, inflation is at historic highs in the United States — the biggest yearly increase since 1981— and it’s obviously affecting consumer spending power. In fact, according to Statista, eCommerce revenue is expected to shrink for the first time ever in 2022.
Money is tight in many US households: New data from the Bureau of Economic Analysis shows Americans are saving much less than they did last year.
However, consumer spending — the largest part of the US economy — didn’t stop rising. That’s a good sign for the economy. Household spending grew in June by 1.1%, up from a revised 0.3% increase in May, the Commerce Department reported.
On average, recessions last 11 months. Have you prepared accordingly for it?
We can say, from historical experience, that recessions are a normal part of the business cycle, which means it’s important to plan for them. As much as certain industries are pretty much “recession-proof” because they meet customers’ primary needs (food, transportation, hygiene, etc,) even those can be a little bit affected in quantity.
So, today, we want to give some advice we’ve learned over the years about how to resist and rise from a recession.
1- Customers are the priority.
We’re all going through a rough patch, and empathy is always needed. Be sensitive to the situation, and don’t push a hard sell. Here are some ideas that might help:
- Run loyalty programs – reward them somehow every time they choose you over other businesses.
- Invest in existing customers – they are cheaper than getting brand-new ones. Connecting with them through channels such as email and social media is always a must!
- Stay present on social media and run contests for your followers.
- Find a way to adapt your product to your customer’s basic needs at the moment. Modifications can be made to the product itself, how it’s delivered, or how it’s priced.
2- Don’t cut down on marketing efforts.
Now, many companies tend to cut down some expenses when a recession comes. Which makes sense. But marketing tends to be one of those, and we believe that to be a mistake. Why?
During a recession, more than ever, it’s important to stay present for customers. Be clear about your competitive advantage. What makes you stand out? What makes you worthy of the audience’s trust? You need to spread that message and make your product more attractive during a downturn. How will it benefit them?
However, if you need to cut down, make sure you measure the effectiveness of your marketing campaigns and strategies, so you know exactly where to adjust the belt and where to bet a little bit more. You want to be informed of what’s working and what isn’t, to concentrate your effort and your money where it’s truly making an impact.
3- Extend your geographic footprint.
Start selling online if you don’t already – and promote your eCommerce. After the tough times have passed, you’ll have a new source of income, which is always a good thing, right? Of course, making a website from scratch can be expensive, but you can start small, and whenever better times come, invest in it.
Those were our honest tips to hang in there. We know times are hard, and staying sensitive and empathetic towards clients and other businesses is necessary. If you want to stand out, you need to stay in touch with your clients to offer them support, and they will remember that after tough times have passed.
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