An economic downturn, especially when it’s officially categorised as a recession, can be daunting for small business owners. It changes the entire marketplace in a blink of an eye and it’s caused the downfall of many businesses.
So how can a small business survive (and even thrive) during a recession?
By becoming indispensable to their customers.
To become indispensable, a business should have strong customer attraction and retention strategies in place. These are essential for establishing and maintaining high quality customer service, and it’s a cornerstone to a business’ success during downturns and times of growth.
Studies show that 84% of consumers prioritise customer service as a key factor in deciding whether to purchase a product or service. And 95% of them say that customer service is important in building brand loyalty.
For a business owner to provide high quality customer service, they need to understand customer attraction and customer retention and implement the best strategies from both. While they are completely different, both are equally important in making a business indispensable.
Customer attraction, also known as customer acquisition, is the process of acquiring new customers. On the other hand, customer retention is the process of persuading new customers to stay with the company rather than switching to another brand.
More specifically, customer attraction strategies include marketing and referrals to increase brand awareness and establish a connection with the target audience. Retention strategies focus on customer satisfaction, product and service innovations, and loyalty programs to build customer loyalty.
Smart business owners know to strike a balance between the two because both play vital roles in the company. A business can’t retain customers if it doesn’t make an effort to attract new ones. At the same time, if a business only focuses on acquisition, it will lose loyal customers.
Focusing on customer attraction and customer retention helps a business stabilise and grow (if done right) despite unexpected scenarios.
Many business owners know the saying “if you take care of your customers, your customers will take care of you” because it’s applicable in any situation. But it becomes even more important when a business is impacted by a recession.
A business can actually be “recession-proof” if it has strong customer attraction and retention strategies in place. Strong customer connections and relationships can lessen the negative impact of the economy by their continued support in your business.
Both large and small businesses have utilised attraction and retention strategies during a recession.
Applebees, an American casual dining chain, promoted their “Pick ‘N Pair Lunch Combos” to entice potential and loyal diners.
Small business owner Lou Lynne Moss of The Flower Shoppe got through the challenging times in her industry by maintaining customer relationships through “hard work, long hours, networking, a focus on quality and exceptional service.”
Meanwhile CEO and founder John Jahn of Spokane Movers adapted by focusing on his customers’ needs and marketing their moving services into more enticing packages.
Each recession or downturn has different characteristics. It’s what makes them so unpredictable and discouraging. But your customers can be a source of stability and growth during times of uncertainty if you take care of them the right way.
These are the five best ways of acquiring and then keeping customers to ensure that your business is indispensable even during tough times.
During a recession, many businesses tend to reduce the marketing budget when they’re cutting costs. But you actually need to market more during this time, not less.
Cutting costs on marketing and brand presence can negatively impact a business in the long run. A recession is a great opportunity to build relationships and create a new customer base because the marketplace is also shrinking. When the economy eventually recovers, you’ll be better positioned than everyone else.
Because there’s less competition, it also shows your target customer that your business is strong and reliable even during tough times.
Knowing the latest marketing trends will help you strategise the best way to promote your business to customers. When you prioritise creating a strong online and face-to-face presence, you establish a genuine connection with your customers.
Successfully attracting and retaining customers requires a deep understanding of your target audience. Failing to meet your customers’ baseline expectations at the very least will lead them to switch to another brand.
A customer-centric marketing approach ensures that your audience is happy and satisfied with your products and services, which then increases the likelihood of retaining them.
According to marketing innovator Epsilon, 90% of consumers find personalisation in businesses appealing, and 80% of them are more likely to purchase from a business that offers a personalised experience. When a business takes care of their customers’ needs and wants, it makes them feel special and important to the brand.
Gaining a deep understanding of your target audience ensures that your business can attract new customers and persuade them to become loyal customers.
Here are a few things a business owner must understand about their target customer:
Focusing on the core competencies of your business will ensure that you offer the best products and services in your industry.
Part of good customer retention is becoming indispensable to them so that they keep making repeat purchases. The value of your products and services are primarily defined by your customers. When your business addresses specific problems or pain points with efficient solutions, you become valuable and important to your customer.
Asking for feedback and actively listening to the customers’ reviews about a brand allows a business owner to further improve their products and services. Feedback also creates a genuine connection because it shows that you care about your customers’ thoughts and opinions.
It can be difficult to maintain honesty and transparency towards your potential and long-time customers during a recession. But telling them what they can expect from your business builds their loyalty in you.
Prioritising your integrity in business results in long-term success alongside a credible brand reputation. And having honesty and integrity as a business owner is a mark of true leadership. It means that your customers can trust your words and promises. And it inspires your team to do the same, which boosts the positive influence of these qualities.
A business needs to have the right processes and tools to effectively serve its customers. Establishing efficient business systems will increase the probability of getting new customers and keeping old ones.
Having a system in place ensures that the whole team can work productively in achieving your business goals. It also means that customers consistently receive the same quality of products and services from your brand.
And it also allows you to review high-performing areas and develop better problem-solving processes. A system is particularly helpful during recession because it serves as your guide in adapting to a new business landscape.
Attracting and retaining customers involves different strategies in ensuring that your business sees through numerous economic downturns and times of growth. Book a call if you need help to make your business indispensable.
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