How to Prepare for the Effects of Economic Uncertainty
We know 2023 has started out with a lot of uncertainty, making the importance of listening to consumers before making strategic decisions more important than ever. Understanding consumer behavior means performing the necessary research to help understand how economic changes can and will impact your business, and then adjusting your plans accordingly. By gaining insights into consumer behavior, businesses can identify new opportunities and tailor offerings or adjust operations to meet the changing needs of the marketplace.
The pandemic shook the core business strategies of many companies that were impacted by this major economic shift. Other companies remained almost “recession-proof” by researching and planning their marketing strategies that built upon the emotional connection their customers have to their products and positioning themselves as indispensable.
According to a national survey conducted by Fiverr Business, with a potential recession currently looming, 85% of US businesses have plans to implement hiring freezes and 78% are planning for layoffs in case of an economic downturn.
Here are a few marketing plans to consider to prepare for a time of financial uncertainty.
During economic uncertainty, businesses should consider expand their verticals, meaning they might want to broaden the range of their business offerings to diversify their revenue streams. Expanding vertically can be an effective way for a business to grow, but it requires careful planning and execution to ensure the expansion aligns with the company’s long-term goals and objectives. Hiring staff that has expertise in vertical industries can reduce the cost of outsourcing or consulting.
Another consideration would be to streamline your verticals by simplifying products/services and increasing marketing spend for more popular products/services that customers have more trust in.
Starbucks is a great example of utilizing a vertical strategy by being hands-on in its supply chain process. Working directly with almost 300,000 coffee growers around the globe, Starbucks is successful in working with its suppliers during every step of the process in order to meet its quality standards, a core aspect of the brand.
Identifying customer behaviors
The key to resistance is to stay competitive and look for ways to diversify your customer base. This could mean targeting new customers who may have more leisure time on their hands due to unemployment.
Data from the American Time Use Survey during the Great Recession shows household work like cooking, cleaning, laundry and more, as well as childcare, took up 45% of the time that used to be allotted to previous work schedules.
Resting, sleeping and television consumption took up 50% of the time while the rest of the time was dedicated to job searching.
All of this extra time allows opportunities for businesses to provide affordable, convenience-focused products and services for the home, childcare, health or wellness, as well as, leisure activities or hobbies.
Affordable & discounted products
Customers are always looking for a deal, especially when being burdened by increases in their monthly budget due to current inflation. According to research from Statista, 93% of shoppers use a discount code or coupon when available.
Businesses should consider offering promotions and discounts to attract new customers and retain loyal ones. Strategizing ways to offer discounts or promotions will keep web and foot traffic flowing.
When done correctly, it’s a great way to keep business revved up without devaluing your product/service or inadvertently training your customers to only buy when there is a promotion.
Companies battling a not-so-favorable economic climate should consider marketing to a new demographic. Partnering with other businesses to cross-promote can increase visibility, which could attract a new audience.
In 2008, during the recession, Netflix was only beginning to introduce its new streaming services after years of offering mail-in DVDs.
They partnered with Xbox so that consumers could stream through their gaming platform. This innovative marketing idea and cross-promotion helped Netflix boom during a time of financial distress.
Weathering the storm
To make it through an unknown time, remember investing in consumer research and strategy is critical as it helps businesses to understand consumer behavior, identify new markets and develop innovative marketing strategies. In return, businesses can stay competitive, reduce costs, and increase ROI despite challenging economic times.
Innovative Advertising is here to help. We offer a Brand Boot Camp that helps get to the heart of your brand.
By examining your company’s why, reviewing constituent perceptions and discussing competitive strategies and key opportunities, we discover how to best serve your brand and connect your audience on a deep and meaningful level.
Learn more about our services, and see how we can cater to your needs.