Keeping your small business afloat especially during an economic recession is extremely tough. More often than not, owners of small and medium enterprises (SMEs) will adopt a system with only their businesses’ survival in mind. They will often resort to cost cutting strategies that would allow their businesses to survive. While these strategies may often work in ensuring that their businesses stay alive, this success however is short-lived and may cause long-term ramifications in the future. When times get tough, a lot of SME owners tend to cut their marketing budget. However, marketing experts believe that marketing should not be sacrificed and instead owners should increase their marketing experts during times of slow economy. Here are some other tips for SME owners during times of economic recession:
Reduce waste but do not over-sacrifice. While it is a sound idea to reduce costs during times of slow economy, SME business owners must be careful not to overdo it especially when it comes to marketing. They can reduce their monetary budget reserved for marketing provided that they offset this by increasing their marketing efforts in other ways that do not involve money. SME owners can task their marketing team to focus on strategies that will not involve a lot of money. A good principle to follow for focusing on marketing is the Pareto Principle or the 80-20 rule which states that 80% of a business’s success can be derived from 20% of its marketing efforts. It is the task of the marketing team to determine what marketing efforts to prioritize and to focus more on while putting the other strategies on hold.
Develop existing customers. The Pareto Principle also applies to getting customers. It is a well-established fact that 20% of your customers will give you 80% of your business. Also efforts to win a new client will be six to seven times as much as the efforts to get an existing client for repeat business. Although every business owner should make it a point to generate new customers, the efforts in making existing clients to repeat their orders must be increased especially during economic recessions. Simple strategies such as giving incentives or loyalty awards to existing clients for their repeated business will help generate more sales. Offering loyal customers special discounts will also encourage them to stick to transacting their businesses with you instead of your competitors. Making existing customers feel special will make them feel that they are getting more value from the products or services that they are offering. This may result to them referring your business to their friends and other relatives.
Never compete on price. Most SMEs are too small to offer low prices as those offered by large corporations. When SME owners compete with large corporations for prices, they will lose on the profits and eventually will sell products at a loss. Never compete with large corporations in terms of prices; instead, SME owners must concentrate on the quality of their products and services and must offer flexibility to cater to the needs of each individual client.
Don’t miss out on any opportunity. Never miss out on any client calls. Having a professional phone system, such as the ones offered by VoIP provider RingCentral, will ensure that you will never miss out on client calls. Also, never miss out on opportunities to market or advertise your products and services. Simple strategies such as passing your business card or mentioning your business to new acquaintances will help generate new clients.
Being in an economic recession is hard especially those who own SMEs. However, business owners can get through these tough times by following the above recommendations.