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8 Recession Strategies for Success
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.
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.