5 Cost-effective Ways to Compete and Win in a Recession

by Chaun Soh

In an economic downturn, your business will need to compete harder than ever — not just to maintain your turnover but to increase it.

The first and most obvious measure most people consider is to cut costs; this has a certain obvious logic but the question is: which costs?

There's no doubt that any business, however well run, can look at ways to prevent wasteful expenditures and generally use a more disciplined approach to spending.

During times like these, marketing and communications budgets often become an obvious target. But, by slashing them, you're likely to do much more harm than good.

Instead, consider the following cost-effective ways to market your business, both to survive the recession and work towards your long-term growth.

1. Maintain your market presence

During downturns, people look for sure signs of stability. They want to know you're still in the game and ready to do business — something usually judged by market presence.

It's important to keep up your regular advertising or direct communication with clients. A sudden drop in these can have negative connotations and result in clients shifting to what they see as a more stable source.

Focus on the print and online media that match the audiences you are trying to reach. Which websites do your customers and prospects visit and rate — how does yours compare?

Are you sending them regular e-mail newsletters, promotional or other business building messages?

If you sell locally, are you using the right publications? Which business publications and business sections of local papers are available?

Be very clear about the decision maker you are targeting. Is it the financial director, the operations director or perhaps the owner-manager? Who influences the decision to choose your products or services?

Do your materials speak to them on their terms, address their needs and give reasons why they should come to you, not go to the competition?

Understanding your customers and the media they trust can help you reach the right people with the right message.

2. Work on your current customers

Compile an inventory of your most loyal customers — the ones who keep coming back to you.

As you know, repeat purchases are the lifeblood of any business — and absolutely critical during a downturn, when people are most likely to start shopping around.

In a recession, you must keep loyal customers coming back. Reward them. Analyse your customer base to learn which are the most profitable. Give them special treatment: discount vouchers, coupons, special promotions, 'thank-you' gifts, and other forms of relevant recognition.

Being clear about who generates the most profit and knowing why they come back will also help you persuade new prospects and trial buyers to join your base of repeat customers.

For example, if your customers want more information on your products and services then create a range of educational tools about what you offer, along with information about related topics.

Or create in-store product dictionaries that highlight key benefits of a product, give toll-free consumer hotlines, and produce newsletters that promote consumer causes and issues — not products.

Such measures make you the authority on the subjects covered — the one to be trusted when it's time to buy.

3. Make your website work harder

As people become more immune to print ads, radio spots and TV commercials, these traditional media tend to become little more than background noise. In fact, they are frequently annoying and therefore ignored.

With most people regarding the internet as the source of instant information, it has quickly become the medium of choice for astute marketers. These range from huge corporations to small local businesses.

If you don't already have a website working for you, it's time to get one. And if you do have one, ask yourself if it is working for you by bringing in the traffic you want — and most importantly, converting enquiries to sales?

A website shouldn't just be allowed to sit there. Anyone who visits it more than once will see it as outdated and stop coming back.

Ensure it's kept up to date with compelling propositions for the audiences you target. Include customer endorsements and case studies.

Make it crystal clear what you're offering, how you do business and how to order from you, or at least enquire. Above all make your site easy to find and feature your web address in all communications.

Redesigning your website is relatively inexpensive compared to the cost of revamping other items.

Print advertising, for example, only lasts a certain time, after which you need to pay more to have it redesigned or placed in the media.

You get better value for money by putting together an effective website; even with updates, it's extremely cost-effective.

4. Upgrade your search engine marketing

With more than 80% of consumer purchase decisions now involving search engine queries, you need an effective web presence — one that goes further than just registering a domain and getting a site put together.

Getting your search engine marketing right is an excellent recession-proofing strategy: it enables you to ensure your site ranks well in search engines and to monitor your investment and returns in real time.

You can maximise your response and return on investment through pay-per-click (PPC) advertising.

Or you may want to consider implementing search engine optimisation (SEO), which has shown itself to be more cost-effective for many businesses than PPC advertising (which can attract large numbers on non-serious lookers at your expense).

By taking a well thought out, strategic approach, you're more likely to get a better return on your investment: more site visitors, more enquiries and more conversions of these to sales.

It is essential to research and analyse both SEO and PPC to see which option is more suitable for your business.

5. Focus on your brand

Brand equity is a valuable asset, especially during a downturn.

The most important aspects of brand-building during tough times are making your brand identity clear, placing it ahead of your competitors and giving it the presence essential for long-term credibility.

Experienced designers can help you identify your unique selling proposition (USP) — what makes you different — and tailor your message to your prospects in a consistent and compelling manner.

Identifying your USP helps you use the economic climate to cut through the clutter and seize the attention of potential customers.

Leaving a gap in your brand presence gives savvy competitors room to step in steal market share from you.

Keep up the good fight

It may seem simplistic to advise businesses to keep up their marketing and communication spend, especially when money and customers are in short reply.

But the fact remains that those who do will come out on top, often against competitors who have become faint-hearted under the pressure brought about by an economic downturn.