Are you prepared for the challenges that your business may experience over the next year? Although economists are divided, key indicators point towards a U.S. recession by 2023. How you prepare could mean the difference between staying afloat or sinking like a ship in a storm.
The National Bureau of Economic Research says a recession involves a significant decline in economic activity that is spread across the economy and lasts more than six months.” What that could mean for your business is a tougher time making sales because heading into and during a recession, consumer confidence in the economy drops and customers buy less.
A Nielsen consumer survey suggests that when money is tight people stretch their budget by drinking less expensive beer, wine and spirits. Cannabis products follow that same pattern with consumers actively comparing shelf prices and seeking out deals. People are not likely to cut out smoking (tobacco or marijuana) and alcoholic beverages altogether because they’re a way to destress and a reward they give themselves for making it through another day.
While it might be logical to scale back on marketing during a recession, that shouldn’t be your plan of action. Instead, businesses need to stay top-of-mind with their customers now more than ever. Ways to do this include email marketing, regularly updating your blog, consistent and engaging social posts, and making sure your website is up to date with any news, events, sales, etc.
Once you’ve got their attention, keep customers coming back by continually providing them with products that exceed their expectations for quality and value and by showing them that your business has their back. And how do you do that? Loyalty programs, which offer discounts on future purchases, are a great way to give a little back.
Behind the scenes, stay lean and flexible. Delete those expenses that serve little or no purpose. Now is also a great time to work with vendors to bring in the best selling products and to see what you can do to make deals on the wholesale side — maybe it’s free shipping or discounts on bulk orders — every penny counts. If all of that is a no-go, find a supplier that offers the same quality products but at a lower price.
During a recession, shoppers want the most for their money. Don’t get into a price war with the shop around the corner because nobody wins that battle — instead look at what areas your competitor outperforms you, and figure out how you can adjust and move ahead. When times are tough, it’s time to focus on your strengths. Promote the products that you offer that the competition doesn’t.
And don’t forget — customer service goes a long way — be nice, be helpful, and with every purchase, no matter how large or small, say “Thanks for your support!”
You might think fewer customers means it’s time to cut back on inventory, but in reality, now’s the perfect time to expand your product offerings. By diversifying the products on your shelves, you’ll be able to not only engage with your current customers, but also bring in new customers looking for products they can’t find anywhere else.
The best way to recession proof your business is to stay in the game and focus on growth rather than simply surviving. A positive mindset will help you to get through a recession and, hopefully, come out stronger than you’ve ever been before.