How To Make Money Online During The Recession

Consumers Are Nervous - But They Aren't Broke
Consumers Are Nervous - But They Aren't Broke

Making Money Isn't Impossible Right Now

For several weeks now, we've been hit by a barrage of terrible economic news. The word "recession" is being bandied about more and more.

At least one friend of mine reports that all of his websites experienced a 70% drop in sales in January and February. Which would lead many business owners, both online and off, running for cover.

In fact, conventional wisdom for recessions (or serious economic downturns, whether they meet the technical criteria to be called a "recession" or not) is merely to survive. Don't try to profit or expand during times like these, the pontificators will tell you. It's impossible. Your customers are broke, and too focused on paying bills and making ends meet to buy the things you're selling.

But that, as Colonel Potter (my favorite character from M*A*S*H*) would say, is "Horse hockey!"

Fear Mongering From The BBC

First, The Economy Isn't As Bad As They Say

The video to the right is an outrageous example of the media hype that has the potential to frighten business owners into their "recession" bunkers.

Why on earth would anyone want to try to sell things when all of America is one payment away from living like this?

Well, it might help to know the truth. Truth that's pretty easy to dig up if you, unlike your average reporter, are willing to look.

The "tent city" in this video was started by the city of Ontario, CA in July of 2007 to benefit its local homeless population. At that time, said population was estimated to be around 140.

These are the chronically homeless, the ones who will essentially always be among us for a variety of reasons.

Word quickly spread about the freebies being offered residents of Tent City, and so it began to grow as homeless types from all over the country raced to get on board the gravy train.

As late as December 2007, Reuters did a story on Tent City with a headline proclaiming it to be the result of economic woes and foreclosures. Yet even they had to admit, 3 paragraphs in, that none of the residents of Tent City were there due to foreclosures.

The BBC claims in this video that 60,000 homes were foreclosed "last month", and that these residents are the result of those foreclosures. They have "nowhere else to go" despite some of them having fairly decent RV's and family elsewhere.

The truth is that Tent City had 400 residents as of March 20, and the city of Ontario was taking steps to evict over half of them because they were nothing more than freeloaders who'd come from as far away as Connecticut and Florida for handouts. Not because they were victims of recent foreclosures.

People Will Still Spend Money If You Convince Them They're Getting Value
People Will Still Spend Money If You Convince Them They're Getting Value

Most People Are NOT In A Desperate Financial Situation

Let's recap what is wrong with the economy: Lenders were too free with mortgages, and loaned people the money to buy more house than they could afford. Many did so with adjustable rate mortgages which came with artificially low introductory interest rates.

Two things happened at the same time: over-inflated housing prices began to decline, (meaning homes were worth less) and interest rates began to rise (meaning payments on ARMs went up.)

Suddenly, people now owed a payment they could no longer afford on a house that wasn't worth what they paid.

According to the Center for American Progress, 8.8 Million homeowners in the US currently owe more than their house is worth. And there were 900,000 foreclosures in progress during the last quarter of 2007.

These are record numbers to be sure. And for those roughly 10 million people, times are indeed desperate. (This is assuming that none of the 8.8 million homeowners who owe more than the house is worth has the ability or desire to simply keep making payments until the situation resolves itself -- either by their increased equity or by the natural cycle running it's course and their home increasing in value again.)

But there are over 218 Million adults in this country. Which means that there are over 200 Million people right now who aren't being directly affected by this crisis.

Those are the people you're trying to sell stuff to.

When Money Is Tight Consumers Want Value
When Money Is Tight Consumers Want Value

What Consumers Want When Money Feels Tight

To be sure, the housing crisis has had a ripple effect. Banks are struggling, some have collapsed.

People have lost jobs. (Yet the overall unemployment rate has actually gone down, from 4.9% in January to 4.8% in February, remaining at record low numbers.)

Then there is the whole other matter of ridiculously high fuel prices.

So even though the majority of Americans (and most likely consumers in other nations as well) aren't personally headed for places like Tent City, money feels a whole lot tighter than it did just a few months ago.

Which means it's going to be that much harder to pry it away in exchange for your products and services.

Harder, but not impossible.

When money is tight, conventional wisdom says that consumers get bargain happy. The smart response is supposed to be lowering prices.

But the truth is it's no smarter now to compete on price than it was when the economy was booming.

Because what people really want when money is tight is value. They don't want the cheapest version if that means it's also the lowest quality. That simply isn't a wise use of money -- you've not saved anything if what you buy falls apart and you have to buy it again in a matter of weeks.

The same goes for services. If the cheapest option doesn't really do what it promises, or if it winds up costing more time or hassle, then it isn't the best value.

Even Wal-Mart, the epitome of the "low price leader" has seen this. They've begun offering higher-quality (and slightly more expensive) items right beside the traditional bargains. And it's working out fairly well for them.

The thing business owners must understand is that rather than cutting costs and prices to the bone, and trying to compete solely on price, they'll make more money by offering value.

When money is tight, consumers want to know they're making smart choices with what they have. They don't want the cheapest option - they want the best value.

Give it to them and you'll make more money -- online or off. And while your competitors are hiding out in their recession bunker, or making customers angry with cheap quality, you'll be rocketing to the top of your market.

Targeted, Quality Marketing Will Make More Money
Targeted, Quality Marketing Will Make More Money

The Most Important Thing You Can Do Right Now

The last recession to hit America was 2001. That time, the culprit was a combination of the "Tech Wreck" and September 11.

Spending on advertising during that recession dropped somewhere between 8% - 11%, depending on who's giving the figures. It dropped even sharper online -- some estimates are as high as 25% -- but that's due in part to the collapse in value of stocks like Amazon that sparked the recession to begin with.

But companies that retreated to the bunker to wait the recession out lived to regret the decision -- if they lived at all. Because when it was all over and the economy began to rebound, they'd lost market positions that some would never get back.

Which is why the single most important thing you can do right now is to invest in the most effective, highest-quality marketing you can possibly afford. There is money out there to be spent. But it's going to take better convincing to get people to spend it on your products or services.

Make sure your voice is heard loud, clear, and often. And make it convincing.

Right now, numbers are again down for traditional "old media" advertising -- print, TV and radio. No doubt this reflects the waning influence of these outlets as more and more of the world moves online.

Online advertising -- especially on social media sites like facebook and MySpace, is continuing to climb.

There are several important things you should take away from these facts:

  • Much of "old media" advertising is eaten up with "branding" or "image building" messages that are a waste of time and money in a good economy. High quality direct-response style ads will not only stand out in these mediums, but are likely to be less costly right now due to waning demand

  • The internet is the place to be. Invest in the best quality website you can afford, and in the most persuasive copy you can get.

  • Build relationships with your customers through autoresponders, videos, forums and conversations on your website

  • Develop a presence on social media sites like facebook, MySpace, HubPages and more that bring added value to your potential customers and deepen those relationships. A good social media strategy can bring tidal waves of quality traffic to your website for a fraction of the cost of PPC

Bottom line: Provide value to your customers. And let them know about it in every way possible.

FREE eBook Tells You How To Make More Money
FREE eBook Tells You How To Make More Money

More Great Advice On Making Money During The Recession

If you'd like more advice on making money during the recession, I've got two great resources for you.

First, I cover this topic regularly on my blog, "Lisa Packer's Internet Marketing Blog."

Second, I've created a FREE report (I'm not even asking for your email address) titled, How To Profit During The Recession. It's 15 pages of pure content that you can distribute as freely as you'd like. Give it away to clients, to people who optin to your email lists -- however you feel it will benefit you.

You can get your copy now on my blog, or you can click the link above to download it now.

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Comments 17 comments

WeddingConsultant profile image

WeddingConsultant 8 years ago from DC Metro Area

Thank you for this hub. Finally there is something written with a little optimism about the economy. I think the biggest part of the economic problem today is the fear in the lives of Americans. That fear is fed by the media, of course. Eliminate the fear and you've got things back to normal!


Lisa Packer profile image

Lisa Packer 8 years ago Author

Thanks, Wedding!

I couldn't agree more -- the biggest part of any economic downturn is fear. If we just refuse to give in, we can make this one short and get back to business!


crazycat profile image

crazycat 8 years ago from Philippines

Good to read your post. Very positive.


yojpotter profile image

yojpotter 8 years ago from Iloilo City

I agree with you Lisa..it is really important to find out what people really need especially during recession period..that way you'll be updated to the latest trend there is..anyways thanks for the very positive note..^^


earnest edwards profile image

earnest edwards 8 years ago from sacramento california

thanks lisa, love to hear truth in not so good times. iam a new internet marketer would love to hear more from you.


myella1 8 years ago from Baton rouge, Louisiana, USA

very helpful... thanks for the info.... keep goin....


Rob Jundt profile image

Rob Jundt 8 years ago from Midwest USA

Great hub and very informative. Having graduated from a well known and respected school of journalism, with an emphasis in advertising, we were taught that the best time to spend $ on marketing and advertsing is during economic down cycles. Thanks for the reminder.


Cindy King profile image

Cindy King 8 years ago from Just South of Paris France

Nice Content, you also forget that the rest of the world can buy online as well as Americans that have not been impacted (yet) by the recession. This link http://cindyking.biz/boost-your-company-way-out-of... speaks of the recession and the "Foreign Lingo" section has instruction on how to target the foreign market.

The Foreign Lingo section is things that works and over the weekend I had someone search in Greek for one of my keywords, and landed on my Greek page. Having foreign language pages is easy and helps getting a new market to see you.


Lisa Packer profile image

Lisa Packer 8 years ago Author

Thanks, Cindy! -- that is fantastic advice. It seems that the media here in the US and in Britain are really on the recession bandwagon, but elsewhere in the world customers may not be so nervous.

Rob: I've seen studies that prove companies who continue to advertise during a recession gain market share both during and after the recession is over. So by continuing to promote yourself now, you could easily find yourself as the leader in your market by the time it's all over.

Crazycat, yojpotter, earnest and myella -- thank you so much for your kind comments. It is very much appreciated!


Shaun Lindbergh profile image

Shaun Lindbergh 7 years ago from Cape Town, South Africa

Thanks Lisa, greta hub! When the going gets tough, the tough get going. Did you know that HP was started during the Great Depression? This is the time for courage. All the best. Shaun


How to make money during the recession 7 years ago

Here is a very good site on how to make money during the recession. http://recessionsuccess.com


Scott Mandrake profile image

Scott Mandrake 7 years ago from Alberta, Canada

Not to rain on the money making parade, I know we are all looking out for #1 and all that, who could blame you, but there are some points to consider here.

It irks me to see such advertising as above, with the competition hanging on for dear life and all that. One would think that a recession or depression, even one formed in fiction, would bring out thoughts of conservation and community rather than further greed.

Greed is what has led us to economic imbalance, among other factors to be sure. In this case however, I'm thinking that the fighting fire with fire has a cumulative effect rather than a homeopathic one. We all do what we have to do to get by, but being aware of what we are actually doing in the long run my give us the incentive to look for alternatives.

Scott


Paul MDS 7 years ago

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I have been looking for a way to increase my income from nil since I finished on a project in the construction industry. Unfortunately, like those of you whose employment rotates around project work, job security isn't always there and when economic crisis occur you better pray your project isn't due to end for at least another few years or make sure you're guaranteed in writing a slot in the next up and coming big thing.

Since the end of 2008, I have been going from site to site looking at different ways in which an income can be achieved. I found out that there are quite a few different methods, but some were more to my taste than others. In addition to what Lisa has said you may find there are other opportunities that are more to your liking. I've noted a few in my blog.

http://paulmdsmoney.blogspot.com


Paul MDS 7 years ago

I have been looking for a way to increase my income from nil since I finished on a project in the construction industry. Unfortunately, like those of you whose employment rotates around project work, job security isn't always there and when economic crisis occur you better pray your project isn't due to end for at least another few years or make sure you're guaranteed in writing a slot in the next up and coming big thing.

Since the end of 2008, I have been going from site to site looking at different ways in which an income can be achieved. I found out that there are quite a few different methods, but some were more to my taste than others. In addition to what Lisa has said you may find there are other opportunities that are more to your liking. I've noted a few in my blog.


jGaunt profile image

jGaunt 7 years ago from London

Well I think you should also consider what people buy. Traditionally they hold of on buying big ticket items like HD TVs and cars, in a ressession. While smaller consumer goods keep selling well.


clean 7 years ago

How to start a foreclosure cleaning business www.Cleaningforeclosures.com has all the information you need to start a foreclosure cleaning business .Everything you need to know can be found at www.cleaningforeclosures.com


forumsendil 7 years ago

hi,

great!

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