Recessions are part of the business cycle. If you plan on being in business for the long run, you will need to prepare for recessions as well as learn how to survive them and come out on the other side even stronger. If you have ever played sports, learned a new language, taken lessons to play an instrument, or completed any other complicated task, you will know that adversity is a part of the process. You also know that how you learn and grow from those adversities ultimately determines your level of success.
Although there are naturally some businesses that thrive in a recession, most business owners will lose sales, customers, or even their entire business. The good news is there is hope. In this article, we will discuss 5 ways to increase sales during a recession.
5 Ways to Increase Sales During a Recession
Offer Discounts or Run a Sale
You don’t want to start a price war with competitors when things get tight. However, you can strategically run some discounts or sales that will benefit your customers and your business by building a relationship that will last long after the recession ends.
A few ways you can incorporate this strategy include:
- Bundle a collection of products that bring a lot of value to the customer and help them to feel they are truly getting their money’s worth.
- Research the current market and add short-term incentives that will get customers in the store without sacrificing the ability to bring the products back up once the economy recovers.
- Run sales on products that are not selling well but could still add value to your core customer.
Reward Customer Loyalty
The most effective way to reward loyal customers is to ask them what they want or need right now. Then, find ways to meet them there. Offer e-mail surveys, Facebook polls, and other Q & A opportunities that set you apart from the competition. Show your loyal customers that you not only value, them but also respond to their feedback.
One trending loyalty program strategy is to offer subscription boxes/programs that give the customers weekly or monthly insider perks or gifts. These boxes are often delivered directly to their door or inbox. Many customers make purchases once they receive an e-mail with a coupon, especially if it has an expiration date that hastens the call to action.
This strategy is also a great opportunity to hone in on your level of customer service and show your loyal customer base that you value them and their business. Humans crave connection and want to feel seen. If your business makes them feel important every time they visit your store, they are more likely to return.
Partner With Other Businesses
Another way to increase sales during a recession is to partner with another business. Finding businesses that might not be your direct competition but are still in your outer niche can be of great value. Not only for your customer but for the businesses involved.
Maybe you sell athletic wear and have a Crossfit or other local gym in your neighborhood. You can partner with the gym owner and offer a coupon for a discounted class at the gym to try it out. Conversely, you can offer a benefit if they sign up for a class at the gym. The offer may be a discount coupon for an outfit in your store. The partnership adds value for the customer as well as your local community.
Only Offer Products that Sell the Most
Recessions force most households to cut back on unnecessary spending to take care of their basics. With this in mind, you need to look at what your business offers and see if you have the best products that sell in a recession or what you can do to incorporate them into your business plan.
You don’t want to eliminate your diverse product line. However, you should consider slimming down the inventory and focusing on what offers the best value for your business and your customers. One way to implement this would be to find a core product such as toilet paper or cosmetics and offer a “good, better, best” variety in your store. This helps the customer feel that they have choices and gives them a sense of control over their decision.
Maybe they want to splurge for the name-brand eyeliner and save a little on their paper towels or laundry detergent. By giving them options, you can capture sales that may have been missed by your competitors.
Increase Marketing Efforts
The gut reaction when a recession begins to hit is for businesses to start cutting costs dramatically, but your marketing plan is not where you want to start pulling the dollars away. Marketing and advertising is your way of reaching customers and, when used correctly, can be the main tool that keeps your business afloat during a recession.
You do want to focus on what marketing efforts are producing the best and not only reaching the most customers but getting them either in the door or clicking the “buy now” button on your website.
Is TikTok giving you the most return? Does anyone even see your newspaper ad? Did those flyers you sent to every mailbox in town bring a single customer in? Anytime a customer makes a purchase, be sure to record what led them to make this purchase and then put your marketing efforts to work in those spaces!
When analyzing your data, get to the nitty-gritty of what works and what is not. Break down your demographics, and then break those categories down again. Who are you reaching the most effectively? Where is your reach struggling? Are there more efficient ways to reach your ideal customer?
Collect the data. Work through it. Find solutions. Check out our article on how to advertise in a recession for some ideas on how to do it right.
No business, whether big or small, is immune to the effects of a recession. The key to increasing your sales and keeping your business thriving will come down to how you react when things get tough. Even if you have the type of business that performs poorly during a recession, you can still find a way to survive.
If you panic and drop prices without an end-game strategy, you could find yourself hanging up an “out of business” sign. If you go into the recession aware of the dips and with a plan to keep your head above water, you will find yourself celebrating your successes.