What Strategies Can a Company Use During an Economic Downturn?
When times are good, marketing is easy. Place more ads, buy more equipment, hire new staff, and then watch your business grow! However, when the threat of recession is looming, consumer spending drops and these spendy business strategies are risky at best and a recipe for disaster at worst.
The good news is that there are options beyond tightening your business’s belt. What follows are a collection of the best ideas to keep your business in the green even as the market tanks.
Improve cash flow with SMS-based invoices and online payments
During a strong economy, late payments on invoices are annoying and may create additional work for your small business. But what may be just a minor nuisance in better days can be existentially terrifying in the midst of an economic crisis. Put simply, getting paid for your services (and paid promptly!) is absolutely essential for the ongoing success of any business.
If on-time payments were the norm, then this wouldn’t be worth mentioning, but late payments have been on the rise for the past few years. In fact, 60% of invoices are paid late and the average invoice in the United States is paid 7 days past due!
So, beyond only working with upfront payments, what is a small business to do?
Take online payments
What you need to do is to make it easier for your customers to pay you! One of the best ways to do this is to accept online payments; sending payment via snail mail takes time, writing checks is a habit that has gone out of style, and people are loath to pick up the phone to call a business and provide their payment details.
Being able to easily pay online via credit card is quickly becoming the norm and for good reason! Online payment portals offer the added benefit of moving the responsibility for taking payment details away from your office staff, giving them more time for closing sales and providing excellent customer service.
Send invoices via SMS text message
When looking at the statistics regarding late payments, it’s easy to come up with malicious explanations for why so many people pay their invoices late. However, if you’re issuing your invoices via email (or even worse, via snail mail) then the explanation could be as simple as overly full inboxes and people who are perpetually strapped for time!
An easy solution is to simply change the medium through which you send your invoice. Only 15-20% of emails ever get opened, compared to up to 98% of SMS text messages! The message for small business owners is simple: emails don’t get opened and unopened invoices don’t get paid! For this reason, sending your invoices via SMS is an easy way to accelerate cash flow.
Make sure you never miss a lead
When business is good it might not matter if a lead or two falls through the cracks. Sure, a few more sales would be nice, but with a packed calendar a missed customer can be hard to notice. The same can’t be said during tough times, when budgets are tight and opportunities are few and far between! In times like these, you want to make the most of every lead.
There is no trick, per se, but here are two important statistics to bear in mind:
The first is that of customers who reach out to multiple companies for quotes, 78% will go with the first company that responds. This means that it pays to be first!
Second, a study by the Harvard Business Review found that replying to inquiries within an hour makes it seven times more likely that you’ll secure a lead when compared to replying within just 2 hours! If you extend your response time to 24 hours then your likelihood of success plummets, with 1-hour responses netting 60x more conversions than 24-hour responses!
Armed with this knowledge it may seem that the best answer is to hire more office staff and have them standing by to reply at all hours of the day. Of course, this is impractical even in good times, and when recession hits the idea is simply ludicrous! The real solution is to deploy a unified inbox and automated follow-ups.
One inbox to rule them all
A unified inbox is exactly what it sounds like: an inbox that lets you see all of your leads and customer contact in one spot.
Modern businesses often are collecting leads from 6 or more discrete communication channels including phone calls, SMS messages, Google Business Chat, Facebook, Instagram, and your webpage’s contact form. Without a unified inbox, lots of time is wasted checking each individually – and failure to check one in a timely manner will result in lost leads.
The best unified inboxes create conversations for each customer, allowing you to track all points of contact across multiple communication channels. Track whether your sales team has followed up to a web inquiry with a phone call and see at glance your entire contact history with each customer.
Automated Follow-Ups
While unified inboxes are a great tool for keeping track of leads from across multiple platforms, the reality is that your office staff still want to go home at night! This used to mean that lead generation essentially stopped after 5pm, but with new automation tools your business will be able to connect with new customers even after your closed sign has been illuminated for the day.
Today, autoresponders have the ability to send your customers a text message in response to web inquiries and missed calls. These text messages can range from simply telling your customer you’ll reach out to them during office hours, to AI-powered tools that start the onboarding process and schedule appointments!
In either case, by responding quickly your customers are more likely to terminate their search and choose your business instead of scrolling to the next search result in Google.
Make your booking and follow up processes more efficient
When economic conditions take a turn, tough business decisions like layoffs might be necessary. Even if you’re not yet at the point where you’re considering cutting staff, you almost certainly will be reluctant to bring on new hires. This can be a stressful time and mean more work for everyone at the company.
One way to help offset extra work is by automating tedious daily tasks like sending out appointment reminders and by giving your customers the ability to schedule appointments online.
Automated Follow-ups
If your business model relies on appointments, then you already know that cancellations and no-shows are a serious drain on your time and resources.
The easiest way to prevent them is to reach out to every customer before their appointment – both as a confirmation and a reminder of their upcoming visit. Issuing one such reminder is an easy and quick task, but day in and day out these small assignments quickly add up!
Using scheduling software with automated reminders eliminates this daily chore, freeing up valuable time and reducing cancellations. The best scheduling software lets you give customers the ability to reschedule within a certain time frame, providing you and your customers with greater flexibility.
Enable online booking
When choosing an online scheduling tool, look for one that integrates seamlessly with both your website and customer relationship management software. This means whenever a customer sets up an appointment online, their information will automatically be added to your list of current customers. By automating this process you additionally eliminate a potential source of transcription errors.
An added benefit of online scheduling is that it actually improves the customer experience. Increasingly, customers are showing a preference for online booking as it provides them with immediate gratification without needing to call or email your business.
Get more reviews
Possibly the best free advertising you can get is customer feedback. In years past this was limited to personal referrals, but recently Google reviews have become the de facto place that customers go to for researching which business they should work with.
Even if you currently have good reviews, it is important to keep them coming in. Customers have become savvier consumers of reviews and are increasingly only considering more recent feedback. For this reason it is essential that you have a review pipeline in place, ensuring that your Google reviews stay current.
An added benefit of getting more reviews is that Google tends to uprank businesses which get a higher level of customer engagement. With more reviews, your business will rank higher in searches and potential customers will be more likely to work with you!
Just like appointment follow-ups, this is a task that can be done by your office staff, but is better handled by automation tools. Review management software connects with your CRM and automatically sends out review requests after each customer appointment. The result is more reviews with less work!
Stay active on social media
Outside of reviews, the next best option for free marketing is social media.
Note: We’re talking about free marketing – paid advertisements on social media are certainly an interesting short-term marketing option to consider, but simply posting more can get you more customers without tapping into your marketing budget!
Facebook and Instagram are the two platforms that small businesses are probably best acquainted with, but Google Business Profile, YouTube, LinkedIn, and TikTok are also viable ways to expand your market share.
OK, but during an economic slowdown who has the money to hire a social media manager or the time to manage a handful of accounts? The solution is simple: use a social media management tool. These software suites connect to a variety of social platforms and allow you to schedule days, weeks, or months of content in advance!
Instead of needing to log into each account individually, a social media planner will take care of the daily heavy lifting. This helps you reap the benefits of social media engagement without having to add another task to your daily to-do list!
Retain existing customers
A time tested marketing strategy, no matter the state of the economy, is to encourage repeat business.
Studies have shown that increasing customer retention by 5% increases profit by 25 to 95 percent! These numbers seem crazy, but repeat customers usually spend more money per purchase and it costs 80% less to market to them! Put simply, your email list of current customers is a gold mine.
Hey, we miss seeing your beautiful face!
One of the best ways to re-energize your customer base is to use reactivation campaigns.
Essentially, with this marketing strategy your company will target current and past customers. You can offer VIP discounts, loyalty programs, or just a reminder that with the season’s change it is time to see one another again. A great time to start reactivation initiatives is whenever your company releases a new product or for seasonal promotions.
In the past, small businesses used physical mailers or phone calls for reactivation campaigns, but today newsletters and email-based reactivation campaigns deliver better results at a lower price.
Not a graphic designer? Look for an email marketing tool that uses code-free designers and includes a variety of templates. You’ll be sending professional looking reactivation emails in minutes.
Respond to Reviews
One the simplest ways to cultivate brand loyalty is to respond to customer reviews. Doing so is an easy and free way to make customers feel heard and show them that you care about their feedback.
Keep in mind that it is equally important to reply to positive reviews as well as negative ones. When addressing negative feedback it is important to politely address the concerns found in the review and offer solutions. In many cases the dissatisfied customer is a lost cause, but prospective customers appreciate seeing that businesses respectfully engage with unhappy customers and attempt to solve their problems.
The best ways for your business to handle an ailing economy
Cost cutting is a common response to economic downturn, but simply saving money does little but make your cash reserves last a bit longer. Instead, it’s important to put your internal processes under a microscope and work on becoming more efficient and capturing every lead that comes your way.
If you’re ready to buttress your business against the next great recession, Poe is the tool you’ve been looking for. Poe leverages a unified inbox and powerful automation tools to make your business stay competitive even in the midst of a pandemic, supply chain disaster, or whatever crisis strikes next!