With all kinds of troubling news on the economy these days, you may be asking yourself questions like:
What are the strategies I can use to help my business survive in a struggling economy?
The good news is, there are more ways than ever for your small business to not just survive a recession, but thrive in one – and beyond.
Most small business owners know that there is opportunity to improve their business with digital solutions, but many may not be aware of just how beneficial these can be, especially in a recession.
By using low-cost online tools and methods, you can set your small business up for success even when the economy is down – and put yourself in a position to emerge from challenging economic times better and stronger than ever before.
In this brief guide, we’ll cover several things every small business needs to do in order to succeed in a recession – the necessary strategies to not just survive, but thrive, despite a struggling economy – as well as the digital solutions that will enable small businesses to enact those strategies.
Understand that recession is opportunity
The first step for any business to succeed in a recession is to adopt the right mindset – to understand that recessions are a natural part of the economic cycle, and while they pose great risks, especially to small businesses, they also provide opportunities to grow and thrive.
This may seem counterintuitive, or like some kind of “power of positivity” affirmation. But it is a fact backed up by statistical evidence. While economic downturns do force many businesses to close their doors, they’ve also been shown to be periods of innovation and growth for businesses that approach them as such.
A study conducted by global management consulting firm Bain & Co., published in 2019, showed that the number of businesses that substantially improved their profits in the “great” recession of ‘07-’09 was 47% higher than during stable economic periods.
Of course, many businesses lost profitability or closed entirely in the same period. The difference between the two groups was how they approached the challenges posed by a struggling economy.
The Bain report details that the businesses that have fared the worst in recessions and their aftermaths “switched to survival mode, making cuts and reacting defensively,” whereas the businesses that succeeded in and after the recession found more efficient ways to do business – streamlining their processes, trimming costs, and increasing their value to customers and clients through digital solutions.
By doing so, they were able to not just stay in business through the recession, they were able to expand and find new avenues of profitability while their competition stagnated or closed down entirely.
The great news for small business owners today is that the digital solutions that will enable their business to survive and thrive in a recession are more powerful and accessible than ever before.
Adopt digital solutions to drive your business
Recessions are an especially tough challenge for small businesses, which often lack the access to capital that larger ones lean on in a struggling economy.
Fortunately, digital solutions are more affordable and powerful than ever before, putting tools in the hands of small business owners that used to be available only to the largest corporations.
In fact, these digital tools have become so powerful over the last few years that they can become your small business’ marketing, public relations, and analytics departments at a fraction of what these kinds of services used to cost.
It all starts with the basics – a website and social media presence.
More people than ever are using the internet. As of 2020, over 90% of consumers had used the internet to find a local business – a figure that continues to grow year by year (BrightLocal, 2020). This fact alone should be enough to highlight the importance of having a web presence for any kind of small business.
But just having a website or social media page is not enough. Having a web presence becomes truly transformative when your small business’ website and social media are properly optimized for search engines and integrated with some of the many digital solutions now easily accessible to even the smallest of businesses.
By taking advantage of these tools and methods, small businesses can gain valuable insights into their operations, run more efficiently, expand their reach, increase their value to new and existing customers, and identify new, low-cost opportunities for growth.
All of which are necessary for a small business trying to survive and thrive in a recession.
Develop a plan for success and monitor your progress
To succeed in business, even in the best economy, requires a clear plan based on good information. But what can small businesses do when a recession comes along and changes all the circumstances their plans were based upon? Many businesses, as found in the Bain report, will respond reactively, cutting costs and corners in a losing battle against the economic tide.
Successful businesses instead develop a proactive plan to rise above unfavorable economic trends, finding new opportunities and seeking insights into their core strengths to leverage them in new and more efficient ways.
Unfortunately, one of the disadvantages traditionally suffered by many small businesses is a lack of deep informational insight. This doesn’t mean that small business owners don’t know how to manage their day-to-day tasks or take care of their customers and clients. It means that quite often, there’s simply too much information that a small business doesn’t have the resources to keep track of.
A small business usually doesn’t have the resources to handle things like market analysis, trends forecasting, and customer research by any of the traditional methods – usually handled by entire specialized firms contracted by larger corporations.
The digital solutions accessible to small business owners today can handle the task of organizing and analyzing massive amounts of up-to-the-minute data through the power of AI.
Once your business’ web content has been optimized, you’ll be able to benefit from the incredible amount of information that tracking and analytics tools can provide. You’ll gain valuable insights into customer preferences, needs, and behavior to better serve them. You’ll get immediate, valuable feedback on which projects, marketing campaigns and online content are making a positive difference for your business and which aren’t.
In a recession, efficiency is key. With up-to-the-minute analytics, your small business can quickly eliminate wasted effort and spending, saving your valuable time and money to reinvest it into projects that are already working or show potential.
This will enable your small business to increase profits and trim costs without cutting corners. It will save you and your employees time and energy, and give you a clear picture of where you are in your business plan at all times – enabling you to adapt to the constantly-changing landscape of a struggling economy quickly, easily, and with confidence.
Broaden your reach and dial in your targeting
If you’re a small business owner looking to trim expenses in the face of a recession, it can be tempting to cut your marketing budget. After all, you’ve got payroll and bills to pay. But research indicates that businesses that market proactively are more likely to have success during and after a recession (Harvard Business Review, 2020).
The good news for small business owners today is that marketing can be made more cost-effective than ever before by adopting digital solutions – allowing your small business to keep reaching new customers and clients while the competition drops out of the race.
These are the primary areas of digital marketing that will help you broaden your reach while at the same time dialing in your targeting – enabling you to reach new customers and clients that are highly likely to engage with your business, more efficiently and cost-effectively than ever before.
1. Search Engine Optimization (SEO) and Local SEO
We’ve touched before on SEO in this article, but it can’t be stressed enough how important it is for any small business that wants to take full advantage of the opportunities presented by digital solutions in order to succeed in a recession.
Search Engine Optimization (SEO) is a set of methods and practices used to improve a website’s ranking for relevant search terms on search engines like Google.
Google is the most visited site on the internet, with 99,000 searches per second, or 8.5 billion searches a day, and up to 90% or more of pages clicked on Google come from the first page of results (SimilarWeb, 2022; Moz, 2017).
SEO enables your small business to compete for a place on the first page of Google and other search engines, dramatically increasing your chances of getting the attention of people who are actively searching for terms relevant to your business – in other words, people already interested in the products and services you provide.
SEO can also help promote your small business directly to potential customers and clients in your local area, through services like Google Maps and the map pack on Google Search.
According to Google’s own research in 2018, searches including the term “near me” had grown over 900% over the previous decade – and they’ve continued to grow since. People are increasingly using the internet – especially on their mobile devices, which often double as a GPS – to find local businesses.
By utilizing SEO on your web content, your small business can be featured among the first results for these searches. This will greatly increase the number of contacts with customers and clients searching directly for businesses like yours in your local area – and lead them right to your door.
2. Digital Advertising
Digital advertising can be a powerful complement to SEO for your small business. Digital advertising services like Google Ads harness the power of AI to serve targeted online advertisements directly to qualified web surfers on their networks – people who have shown an interest in products and services like yours and are likely to engage with your small business, whether online or offline.
Digital advertising campaigns are highly targeted and only charge when someone actually clicks on the ad, making them among the most efficient and cost-effective methods of advertising available.
Digital advertising services like Google Ads use millions of data points about their users to identify who to serve your ads to, instead of the “scattershot” approach of radio, billboard, newspaper and TV ads. And they cost on a “pay-per-click” (PPC) basis in most formats, meaning if someone sees your ad and ignores it, it costs you nothing. You pay only if someone demonstrates actual interest in your ad. That’s a benefit to small businesses even in the best economy – let alone in a recession.
The incredible amount of data stored by online networks about their users can be put to work for your small business, ensuring that your digital advertisements reach the very best potential customers and clients for you.
You can tailor your small business’ digital ad targeting to people in your local area or multiple areas where you do business, people who are likely to make online or offline purchases based on past behavior, people who have shown a passionate interest in topics relevant to your business, and the list goes on. The incredibly granular data points that online networks have about their users can be combined to produce innumerable – and often unexpected – unique audiences for your small business’ digital advertisements.
Fortunately, you don’t even necessarily have to come up with your targeting yourself – digital advertising networks use machine learning to develop valuable targeted audiences as well as test your ads for you.
Gone are the days of needing an entire marketing department and multiple rounds of testing to develop effective advertising campaigns. With digital advertising services like Google Ads, all that’s needed is a few ad elements – text, pictures, video – highlighting what your small business has to offer, a web address for the ad to link to, and whatever guidelines you want to set for the system, like geographic area or certain demographic information.
With that, AI goes to work for you, developing target audiences and testing advertising strategies and layouts that, as the machine learns over time, will yield the best possible results for your small business – leaving you free to handle your other responsibilities and at a minute fraction of the cost of older advertisement methods.
People are increasingly doing their shopping online, a trend only accelerated by the COVID-19 pandemic and subsequent lockdowns. Even with brick-and-mortar locations reopening their doors, 2021 saw ecommerce grow by 14.7%, claiming 13.2% of all retail sales in the United States for a grand total of $870 billion (Forbes, 2022).
Any small business that sells physical or digital goods can benefit from the increased reach of ecommerce and transform their local business into a national or worldwide one practically overnight.
But ecommerce isn’t just for selling goods – any small business can benefit from the reduced overhead, increased convenience, and 24/7 service provided by ecommerce solutions.
A study in 2019 by the Atlanta Federal Reserve found that three-quarters of respondents had used some form of online payments, and that percentage has only increased in the wake of COVID. Services like online bill pay, scheduling, appointment-setting and more are growing increasingly popular.
In fact, 74% of consumers now prefer digital methods to traditional forms of payment (Onbe, 2022).
ECommerce solutions also have the added benefit of generating useful, easily accessible data on customer and client behavior through tracking software, which can then be analyzed to gain actionable insights for your small business.
With ecommerce solutions more accessible – and more popular -than ever before, any small business would be wise to investigate how these digital solutions can help them reduce overhead, generate useful data and increase availability and customer satisfaction, especially in a recession.
4. Affiliate Marketing
In a recession, finding new ways to promote your products and services for less is key. With low or no up-front costs, affiliate marketing is a perfect solution for small businesses looking to increase their reach online.
Affiliates are third parties who will promote your small business for a commission – meaning you only pay them a percentage of the profits they bring to you.
Whether your small business provides services or sells physical or digital goods, affiliates can do the legwork of finding new clients and customers for you – driving business to you while you focus on other tasks.
There are thousands of professional affiliate marketers online, and several affiliate networks that will give your small business the ability to vet affiliates and choose which get access to your affiliate programs.
By choosing reliable, professional affiliates, your small business can gain the benefit of a direct sales force without any extra overhead – a key advantage in a recession.
5. Strengthen your relationships with current customers, clients, and suppliers
The old saying about “a bird in the hand” applies even more in the unstable environment of a recession. Your most reliable relationships are the ones you already have. So while your small business must continue seeking new customers and revenue streams, you’ll be wise to deepen the relationships you have with the people and firms that already do business with you.
Increase your value proposition
There are many ways to increase your value proposition to customers and clients. Once you’ve optimized your web presence and implemented tracking and analytics, you’ll be able to gain valuable information about what exactly your customers and clients value about your business – and maybe a few places where you could use improvement.
You can also increase your value proposition quickly and easily by sharing your knowledge about your industry through your online content.
Part of search engine optimization (SEO) for your site and social media is publishing consistent, valuable blogs and articles about your business, your industry, and related topics.
This can help your business in multiple ways: helping online searchers find you more easily, increasing engagement with current and new customers, clients and suppliers, and providing you valuable data through your tracking and analytics.
Increase points of contact, increase engagement
There’s a reason why most major corporations have a website, blog, email list, and presence on every major social media site and app – they’re low-cost methods to stay on the minds of people who interact with their brand, as well as sources of data for their analytics.
Your small business can gain the same benefits as the largest corporations with the digital solutions readily available to you online.
Social media posts, blog posts and articles on your website, and regular email updates are a simple, low-cost, and effective method to stay in touch with your customers, clients and suppliers – and the more you stay in touch, the more likely they are to continue to bring their business to you, despite a struggling economy.
And the great news for busy small business owners is that many of these processes can be automated for maximum reach and efficiency with digital solutions.
One of the many benefits of improving your small business’ online presence is the potential for cross-promotion. It’s an easy win-win to write up a blog or social media post about one of your client firms or suppliers and encourage them to share it on their own site or social media with a link to your content.
Especially in a struggling economy, the businesses your small business interacts with will greatly appreciate the free promotion, and you’ll benefit from the extra attention your content will get when they share it.
You can even do something similar with individual consumers on social media. Many active social media users like getting more views and likes on their content, regardless of whether they benefit from them financially. Encouraging your customers to share their experiences with your services and products, and then sharing their social media posts on your own feeds is a great way to get free promotion and build customer loyalty and engagement.
6. Re-engage lapsed customers and clients
Increased customer churn can be a challenge for a small business in a recession. By implementing a recession-proofing plan and proactively increasing engagement with current customers, your small business can reduce lost customers and clients, even in a struggling economy. But you should have strategies in place to regain them as well if they do lapse.
Digital solutions make it easier than ever before for small businesses to remain engaged with their customers and clients, the first step to reducing customer churn and establishing relationships that will bring lapsed customers back in time.
By incentivizing your customers and clients to engage with your small business online, you’ll gather more methods of contact than ever before. Email and social media contacts are a great way to remind customers of the valuable service your small business provides – reducing customer churn and influencing lapsed customers and clients to do business again with you when they’re ready.
You’ll gain valuable points of contact from implementing tracking and analysis software on your web content, as well as by utilizing ecommerce solutions.
These can be used to help retain and regain your valued customers and clients, as well as collate data that can be used to retarget your current and lapsed customers and target new, similar audiences with digital advertising – increasing your reach, targeting , and impressions among qualified audiences likely to engage with your business.
You’ll also gain insights into what your customers and clients value most about your business, and be able to use that information to reach out to lapsed clients with effective messages relevant to their needs.
This is one of the most important strategies for any small business in a recession. Having in depth knowledge of your customers and clients’ needs and preferences will enable you to craft effective messaging to keep the ones you have and regain any you might lose due to a struggling economy.
7. Diversify Revenue Streams
In a recession, your small business will most likely need to move beyond “business as normal” and find new sources of revenue. Fortunately, digital solutions make this an easier process than ever, enabling small businesses to gather the data needed for proper planning and providing them with the tools to diversify effectively and at a lower cost in money and human resources.
Developing new products and services becomes easier when you have in-depth insights into your small business’ customers’ wants, needs and preferences, and the instant feedback provided by digital solutions will enable you to quickly adjust your new offerings if needed. But it’s not just about brand-new products and services – in many cases, it’s about repackaging your current offerings or making them available to customers in new ways.
In an article published in the aftermath of the Coronavirus outbreak and its related shutdowns, the US Chamber of Commerce focused on digital solutions as the answer for small businesses looking to diversify revenue.
They focused on four main digital solutions – ecommerce, affiliate marketing, online courses and workshops, and adding subscription services as part of your business model (US Chamber of Commerce, 2021). We’ve touched on ecommerce and affiliate marketing earlier in this article, and hopefully it’s clear why these are attractive online options for your small business to diversify revenue streams, opening up your business 24/7 and increasing your reach to new customers and clients online.
The Chamber of Commerce also suggests the possibility of using your online presence as a vehicle for your small business to diversify into affiliate marketing itself – using your website and social media to promote related but non-competing products and services from other businesses for a commission.
This can be a great way to leverage your newly-optimized web content and digital solutions to generate mostly-passive income for your small business – and develop new contacts in your industry that may be helpful in the uncertainty of a recession,
Developing online courses and subscription services is more accessible to small businesses than ever thanks to digital solutions. By tracking and analyzing data through your online channels, you can develop strong ideas on what parts of your business are the most valuable to your customers and clients.
From there, you can come up with a plan to repackage your current products and services into a recurring subscription model, providing your business with a new stream of steady revenue from your most committed customers. You’ll also be able to determine what topics related to your industry would most benefit your customers and clients – as well as new ones you haven’t reached yet – in order to channel your know-how about them into ebooks, online video courses and seminars.
Every industry and every business within an industry is different, but with digital solutions, any business can establish new streams of revenue by developing a data-driven strategy and driving new offerings with the power of their online platforms.
With these new revenue streams, your small business can not only find new ways to make money, but new and profitable directions to take as an organization – enabling you to not only survive a recession, but come out on the other side stronger than ever before.
Remember, recession is an opportunity for your small business.
Every recession will see more businesses than usual fail, but the ones that adapt proactively and seek new opportunities will often come out stronger and more profitable than ever before. Digital solutions are more powerful and cost-effective than they have ever been, and by utilizing them effectively, your small business will gain the advantages needed to survive and thrive in a recession.
“In the midst of every crisis lies great opportunity.” -Albert Einstein
If you’d like to learn more about how to implement digital solutions to find the opportunities lying in the midst of any crisis, connect with us today!