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‘Recession’ isn’t a word businesses like to hear. The mere mention of recession can make your stomach flip, the hairs on your arms stand up and your mind race with anxious thoughts. What business strategy should I choose? Will it be the right one?
Okay, enough spiralling.
The key is to step into the winner’s mindset when discerning how to navigate a recession. To help you out, we’ve got three strategies that make the perfect recipe for surviving a recession.
Fear no more! Let’s get into it.
Strategy #1 - Cut costs
Your first reaction to the threat of a recession might be figuring out ways to cut costs. Makes sense, right? Less money coming in, less money has to go out.
Some of the initial steps to cut costs include:
Reviewing employee salaries.
Reducing non-essential services.
Examining supply chain costs and inventory levels.
While these strategies are a great starting point, they can also backfire if implemented incorrectly. For example, if businesses cut costs too drastically, it can decrease the quality of products and services, harming customer loyalty.
Additionally, reducing costs can decrease employee morale and productivity. Businesses need to be strategic when reviewing costs to ensure they don’t have any negative repercussions.
The main takeaway is strategically reducing spending in a way that isn’t obvious to your customers. Your customers will know you’re experiencing the effects of a recession, but you want to appear as though you’re not a victim of a recession.
The goal is to thrive during a recession, not just survive.
More intentional strategies:
- Reduce employee hours instead of redundancies – Your employees will stick with you through the downtime, meaning your business will remain strong once the recession’s over.
- Review your tech stack – Replace outdated tools and cancel subscriptions you no longer use.
- Monitor company spending – Hone in on who’s spending extra money and who’s allowed to sign off on such purchases.
- Reduce energy consumption – Examine excess energy usage that may be driving utility bills.
Strategy #2 - Identify new opportunities and nurture existing ones
During a recession, your business must adapt to your customer’s changing needs. Customers are spending less and perhaps earning less. By introducing new and affordable products and services, you can maintain your existing customers and attract new ones.
However, this might require additional marketing costs. The good news — they don’t necessarily have to increase. When marketing new products or services during a recession, revisit the marketing strategies that have worked for you previously.
With that said, also identify which strategies weren’t working and consider stopping or significantly reducing them. If one area is working for you, stay there and work on standing out.
To drive that message home, you can reallocate that money in the area that was working for you by cutting out marketing costs in an area that wasn’t working for you, which will further increase your reach and success.
For example, you’re spending money on Instagram but your account has never taken off. In the back of your head, you know your ideal customers aren’t there.
The first step is to acknowledge and readjust. Suppose your customers enjoy browsing Twitter for a good read on their commute home. In that case, consider investing your marketing strategies into a high-converting blog to put on your website.
Ultimately, you will have spent your money wisely instead of wasting it in areas that weren’t working for you in the first place.
Of course, this is only one example. The marketing opportunities are endless if you adopt this strategy, get out of the fear mindset and view the recession as a challenge you’re ready to conquer.
Strategy #3 - Shift employee roles
Your employees are the backbone of your business and you should use them as wisely as possible. First, identify which employees can take on more responsibility without suffering from burnout.
For example, if you have a freelancer for any role, consider shifting these responsibilities to a full-time employee on salary. Your full-time employee may enjoy new tasks, improving morale and cutting costs simultaneously. And it works both ways — outsourcing tasks to a freelance might make more sense.
The takeaway is to reshuffle any employee roles that may benefit your financial state during a recession. Be open and honest with your employees and try to make it seem beneficial to them.
Get more tips to help you through
We all fear a recession, but hopefully, you have a more positive outlook on the situation now that you have some ideas for tackling it head-on. Ultimately, do what feels right. The most important mindset is to believe you can survive this recession.
You can sign up for our webinar 'Marketing in a Recession' or watch previous events from our webinar library.
We’ve also got helpful downloadable resources to level up your marketing game and keep you motivated through the more difficult times.