Recent global events have started talks about a possible recession that might occur anytime soon. Some even believe that we are already at the beginning of one—with inflated prices, stock market declines, and multiple layoffs. As a result, these happenings have led to entrepreneurs planning recession-proof business strategies.
How will a recession impact your online business?
During a recession, there are a lot of factors that could affect consumers’ purchase decisions and spending habits.
Rising inflation costs, post-pandemic effects, and unemployment are just some of these factors.
For retailers, a recession will be quite challenging if they do not offer essential goods. Since consumers will continue spending on food, health, clothing, and shelter, other industries will most likely experience a decrease in sales.
Focus on these 4 things to recession-proof your business
So what can business owners do to not only survive, but to even thrive during a recession? We did a roundup with experts who shared really valuable insights for business owners.
These are four investments that will help your business be recession-proof.
Prioritize and protect your store’s data and security
Here’s some real talk from Alison Piel, Partner Marketing Manager of Rewind. “During a recession, disposable income is the first thing impacted. Customers are purchasing to satisfy needs, not wants.”
This means that when online users go to your site willingly, you have to make the most out of this opportunity.
Downtime not only impacts the present. Since downtime delivers poor customer experience, online users might simply move on to their competitors. The likelihood of them coming back is very small—and this is something that businesses would not want to happen during a recession.
Invest in your store’s health and protection. This also includes making sure that all the critical data your site needs to function is complete and secure.
Here are some additional tips from Rewind to ensure your store is protected against unwanted downtime:
- Use a password manager.
A password management program will help ensure that your accounts that are connected to your site’s backend are protected.
- Control access and usage of third-party apps.
Most third-party apps require both “read” and “write” permissions—opening up your store to more risks since these apps can manipulate, corrupt, or even delete your store’s data. Study the terms and conditions and vet with your tech team before allowing third-party apps to access your backend.
- Stay vigilant for phishing attacks.
Be mindful of emails or texts from unknown senders. It’s also important to conduct training for all individuals in your organization who have administrative access to your store.
- Always back up your store.
Make sure you have a recent backup of your store to help mitigate risks. In the event of a critical issue affecting your store’s functionality, having an up-to-date backup will help you bounce back faster.
Remember that 81% of consumers will stop engaging with a brand online after just one data breach. During a recession, maximizing the traffic that your site receives by ensuring your site is always up is important. However, what’s even more important is establishing your trustworthiness and your credibility.
Continue building your brand and strengthening relationships with customers
As mentioned above, consumer behavior will tend to change during a recession. If your brand does not fall under the essentials category, you can definitely expect to see a downward trend in sales and revenue.
Maria Angela, Copywriter from Onik Lab explains that during a recession, brands must focus on building a personal brand and cultivating relationships with their existing customers. “A recession is a time to build a bigger, better personal brand. The world needs your value now more than ever,” she explains.
A strong personal brand will help you:
- Be seen as an industry expert
- Use your reputation and credibility as an asset when the economy starts to recover
- Stay on top of mind of your existing and potential customers
- Increase your retention rates and decrease customer churn
So how do you go about investing in brand building? The good news—it doesn’t require special training. Here’s a quick punch list to get you started:
- Be seen on platforms where your customers are
- Provide value consistently to your user personas
- Start an email newsletter for regular communication
- Create a community for your customers
It’s given that customer acquisition strategies won’t cut it during a recession. So focus on your retention strategy instead and increase your return customers.
Remember that acquiring a new customer can cost up to five times more than retaining one. Additionally, returning customers spend 67% more than new customers.
Here’s the bottom line: Strong personal brand = better client relationships = increase in client retention = more profit = healthier business.
Create SEO-rich content to increase your value
Omar Deryan, Co-Founder & CEO of OJ Digital Solutions offers a different point of view when it comes to best investments in a time of recession.
“Most businesses will probably consider investing big-time in UGC, marketing efforts, or networking to help their brand hold up during the tough economic times,” he shares. “While these are all helpful ways to strengthen your business, I think that businesses should instead focus on investing in their blog, content creation, and SEO.”
This actually makes sense because paid ads are becoming more and more expensive. Last 2021, the average cost per click (CPC) for Facebook ads increased by 17% from 2020. Cost per thousand impressions (CPM) also increased by 41% in August 2022 compared to the same time period in 2021.
Omar explains that when paid ads become too expensive, brands may stop investing. Then, orders will stop coming in. Cash flow will slow down, and businesses will have to face the consequences.
So what should you do?
Treat each page of your website as an avenue for your business to rank on search queries. This will allow you to expand your audience continuously and increase customer lifetime value despite tough times.
Remember that recessions are usually short-lived. By prioritizing long-term investments like SEO-rich content, your business will manage to stay ahead even during downturns.
Level up your customer support strategy
Finally, customer support is no longer “optional.”
In fact, 96% of customers will leave a business after a bad experience with customer support.
This means that customer support is closely tied to the overall customer experience. During a recession, it’s crucial to engage potential and existing customers. That way, they are continually invested in your brand—regardless if there is a recession or not.
Wrap-up: The right investments will help your business thrive amidst a recession
The best business investments are those that are in it for the long haul. With a possible recession looming, it’s crucial to start investing in long-term and sustainable benefits as early as now.
Chat with one of our experts to start recession-proofing your business today.