A recession is a time when people spend less as a result of the decline in the economy. To stay competitive, you have to find creative ways to increase your sales during an economic downturn.
Planning and preparing for a recession is crucial because the economy can change anytime, and you must always be prepared. If you don’t have a plan, it could affect your business’s sales when a recession erupts.
It is a common misconception that businesses will make fewer sales during a recession. The truth is that the market is just as competitive as before. You can make more sales during a recession. However, if you cannot keep up with the competition, you might close your business doors to competitors.
This article will discuss how to increase sales during an economic downturn or recession. We’ll also discuss how to recession-proof your business in difficult economic climates with data-driven tips.
Below are things to do during an economic downturn to increase sales.
Do you believe in the saying, “If you fail to plan, you are planning to fail?“
Businesses need to prepare for a recession to survive.
According to “Rebecca Henderson of Harvard Business School,” you need to keep your company alive by having money at all times to sustain it even in hard times such as economic downturns.
She said, “rule one is: don’t crash the company.” I.e., don’t run out of money in your business. Amazon had a lot of capital to sustain its business before the Dot-com bubble in the early 2000s. They had raised $672 million before the market crashed. The money helped them fund their business, carry out marketing campaigns, and cope with expenses.
Without these funds, how could Amazon make more sales? They would have shut down, just like many of its competitors.
How do you pay employees without funding? How do you run paid campaigns during a recession? You need to have enough money to manage your business all the time.
So, if you want to increase sales or survive a recession, you must have sufficient funds to carry out your business activities – that’s rule #1.
Seek advice from financial and business advisors during an economic downturn is another way to increase sales during a recession.
Economic downturns are a perfect time to seek advice from financial and business advisors. Seeking advice is one of the Seeking out advice from them will help you understand what you should and shouldn’t do during the economic downturn.
You can also partner with other business owners to learn strategies that work for them. They may have untapped strategies that make them more successful during economic downturns.
When the market is down, it can be challenging to make a sale. However, offering incentives motivates customers to buy from you even in hard times.
You need to be creative and innovative to increase sales during a recession. One way that has been proven effective is offering incentives; by selling your products as a package deal with complimentary items or discounts.
For example, if you sell clothing, consider bundling it with items like shoes or other apparel with discounts. Another way to increase sales in an economic downturn is telling customers to “buy X and get Y free.” Who doesn’t want value?
During a recession, spending is minimized because the poor economy makes customers less motivated to buy more products.
A streamlined approach to entice people to buy more from your company is offering them incentives like discounts, freebies, or after-purchase bonuses.
Doing this inspires customers to stay glued to your business rather than looking for alternatives or lower-cost solutions, which is common during economic downturns.
Technology helps you generate more sales during an economic downturn. It saves you money and time; and makes your company more efficient and productive.
We’re now in the time of Artificial Intelligence that makes life easier. Adoption of current technology in web 3.0 can help us make sales and recession-proof our business.
How can we make more sales in a recession with the opportunities provided by web 3.0?
Using AI, we can automate parts of our business, like customer attribution, marketing research, content writing, data-driven prediction, sales automation, and much more. We can do anything possible with AI.
Some people are worried that AI will replace them, and it’s not surprising – AI is incredible. Many companies use AI software to increase sales which helps them achieve their business goals even better than human beings.
Automation is key to marketing and sales, and AI is the arsenal of modern automation.
Marketing automation can take a lot of the hard work out of your hands, freeing you up to do the more creative things to achieve your set goals.
You need to leverage current technology to increase sales more efficiently and cost-effectively during an economic downturn. Artificial Intelligence is the future of technology, marketing, and sales.
With the possibilities of AI in digital technology, businesses can uncover insights and analytics of the industry’s past, current, and future state. With data-driven research and analytics, companies will understand the best strategy for the business and position for wins and more sales.
We all know Metaverse will soon dominate the world due to its increasing interest over the last few years (just as AI and TikTok are currently doing).
Many companies are moving from a static environment to a virtual (virtual reality) through Metaverse. Your business needs to adapt to current technology changes and trends to increase sales.
Amazon leveraged technology to sell online before the dotcom bubble burst; this saved them from possible downfall and became recession-proof.
They started selling online aggressively while their competitors sell mostly offline. That technological advancement helped them make over $600 million to survive the dotcom crash.
Utilize current trends and technology if you want to make sales during a market downturn or any challenging time in business.
In times of recession, finding ways to save money is more important than ever. One way that businesses can do this is by reducing their operating costs. With AI, we can cut out the tedious and repetitive tasks that are usually time-consuming and expensive to execute.
Another streamlined way to reduce your business’s expenditures is by outsourcing some of your business operations to freelancers or companies in less expensive countries to increase your profit margins.
Cutting down the cost of production and the cost of purchase of your products is a streamlined way to survive during an economic recession because consumers always want cheap and affordable solutions for their needs.
However, when subsidizing, ensure you are not hurting quality as that matters more than the price difference. Your customers and prospects always want the best quality when buying a product.
The catch is to be cost-effective and competitive in your industry without sacrificing quality. That way, you can win more customers and prospects because people want to buy cheap and affordable products during the economic downturn.
If your products are too pricey in a recession, you will struggle to make more sales.
During a recession, it’s important to invest in marketing to keep your presence high and your customers informed. Not investing in marketing during this time would make competitors dominate you and get more market share.
Existing customers are more likely to buy more from you and will help your company grow in an economic downturn. According to Constant Contact, 65% of your existing customers are more likely to buy your products than 13% of new customers. We recommend focusing on existing customers during an economic downturn rather than new ones.
Marketing and advertising are crucial during a recession. Companies that invested in marketing saw their numbers grow, while those who didn’t were left struggling (some closed).
Below are a few companies that went recession-proof during an economic downturn in business because they increased their marketing and advertising activities:
Amid economic hardship in 2008 and 2009, Amazon increased sales by an impressive 28% due to its marketing and product innovation. One way they accomplished this was by launching Kindle, which increased digital book purchases over the years.
Pizza Hut and Taco Bell were recession-proof because their competitor offered them a new opportunity. In 1990-1991, McDonald reduced their marketing and advertising budget, resulting in a 28% loss in sales. In context, “Pizza Hut'” and “Taco Bell” took advantage of this.
Both companies increased their marketing budget and activities, which led to a 61% (Pizza hut) and 40% (Taco bell) increase in sales. That’s the power of marketing in a recession. Do you want more sales in a recession? You should consider marketing your products strategically.
Here is what NOT to do in an economic downturn to increase sales in business.
It is important for a company to be aware of the current economic situation and how it can affect its sales. One of the things that you should avoid during a recession is to offer your products at a higher price than what people are already paying.
If you sell at an expensive rate, it will make consumers less likely to buy your product because they think they can find something similar at an affordable price.
Laying off many employees in an economic downturn can devastate your company.
Don’t lay off many workers. Instead, find creative ways to retain them while reducing costs – you can reduce their work hours to keep them than let them go.
In 2009, more than 2.1 million Americans lost their jobs during the great recession, which affected many companies’ workforce and business growth. However, companies that prioritize other strategies of cutting down costs like operational improvements were less affected.
Things to consider before laying off employees include:
Here’s why: When people lose their jobs, not only will they not have any income coming in, but often it means a couple of their dependents also find themselves affected and unable to buy anything or contribute to the economic growth – this affects your business indirectly.
Recruiting, training, and hiring new employees isn’t always easy. You can rehire employees once the economy’s back to normal, but the cost is expensive.
Layoffs are widely considered one of the worst things to happen at an organization. It reduces the morale of the current workforce of an organization. Employees may also feel like they can’t do their best work because more responsibilities are being assigned to them.
In an economic downturn, it’s often difficult to grow and scale a business without being innovative, competitive, and creative.
There are many ways to increase sales during a recession or market downturn.
You should consider changing the pricing of your products to maximize profits. If your product has a higher price, consider dropping it down to become more affordable for consumers.
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