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8 Recession Strategies for Success

Updated on June 13, 2014
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Recession strategy for discretionary businesses

A recession is a situation where people spend less. From a company's perspective, revenue must be expected to fall during the recession, and as a result expenses must be cut. To maintain revenue, extra effort and creativity will be necessary. The ideal approach will vary depending on the exact nature of your industry and your company's specific circumstances.

Companies providing entertainment, for instance, will suffer whereas staples like food, water or personal hygiene will not. For a company that deals with more discretionary, less essential goods or services, how can you succeed or at least survive in this difficult environment? Here are some ideas.

1. Demonstrate uniqueness

Focus on the unique offering, what is compelling about the product that makes it an appealing option to spend money on. Be creative and make your website, social media presence and promotional materials stand out.

2. Value for the money

Demonstrate the value being offered. This can be hard because the product is not really measurable in a tangible way (there are no units of entertainment or happiness, for example). But it can be approximated with user testimonials, photos, videos, and vivid descriptions conveying how much enjoyment customers get out of it.

3. Customer experience

Invest in the customer's experience so people feel it was a good purchase. This makes repeat purchases and positive word of mouth more likely. Remember that the experience begins the moment the customer becomes aware of your product--whether from a search engine, an advertisement or press coverage. It also includes their experience with your staff and personnel, such as sales representatives or customer service.

4. Gifts

Emphasize the value of the good or service as a gift, which is something people try to spend money on even if money is tight. Think of birthdays, holidays, weddings or other special occasions in people’s lives. Make extra promotional efforts around major holidays.

5. Sell to the right market

Try targeting groups that tend to have lots of disposable income: the very wealthy; people who live in certain cities, states or geographic areas where income and wealth is higher than average; teenagers and undergrad college students. The ideal is the teenage or college student children of high-income families, who live in wealthy and high-income locations.

6. Cut expenses

Wherever possible, cut costs that can be cut, but don’t skimp on the customer experience. Costs should always be kept in check, and this is especially vital in a recessionary environment. Even if revenue is tough to manage, you always have control over what you spend.

7. Have a good presentation

Maintain an exciting, positive energy to draw people in so they can forget about the difficulties of their work or day or other issues in their lives (of which there are plenty in a recession). Enthusiasm, optimism and fun are scarce commodities in a recession, just like everything else. They can go a long way in how people perceive your company. A positive facade by itself generates buzz and interest, which will ultimately indirectly translate into sales.

8. Cut prices smartly

You can offer discounts, referral and affiliate programs, special offers, etc. But be careful because once the prices go down, it’s very difficult to raise them when the economy turns up. People also get used to the lower prices and will be less likely to spend more without an increase in services. Make it as clear as possible that these are temporary prices or offerings that won't last. This enhances the perceived value while conveying urgency.

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    • secularist10 profile imageAUTHOR

      secularist10 

      6 years ago from New York City

      Buyabiz:

      You bet. Recession just raises the stakes and makes effective value generation and cost minimization all the more essential.

    • secularist10 profile imageAUTHOR

      secularist10 

      6 years ago from New York City

      Glad you found it useful, Editor. You don't necessarily need to offer more expensive products to appeal to the wealthy. The point is to make an effort to target those groups in your promotion, even if you are selling the same basic things. You can repackage and rebrand it to appeal to them, even if your cost structure remains unchanged.

    • BizVT34 profile image

      BizVT34 

      6 years ago from USA

      Seems to me like all of those apply anytime, recession or not. The issue for every business, every day is providing value. Those that do succeed, those that don't eventually fail.

    • editorsupremo profile image

      editorsupremo 

      6 years ago from London, England

      Useful hub, thanks for the info. However, tip no.5 what product could you offer the wealthy that would not cost you some investment? and as you know in a recession businesses get strapped for cash because people are not buying.

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