How To Market In A Bad Economy

Does this sound like you... the economy is going south, and you're starting to panic. You're worried about the financial health of your small business. You think about slashing your prices to stimulate your sales. You assume you need to cut back on your marketing activities to save on expenses.

If that sounds like you, you're not alone. A lot of the small business owners I consult with have those exact feelings. They want to discuss lowering prices and reducing marketing. There are a myriad of reasons why I disagree with both of these ideas, but rather than bore you with a dissertation on my philosophy, I thought I'd share a few tactics that you should be employing instead.

First and foremost, you should definitely be focusing on your current customers. Current customers are easier to market to and sell to, since they already know, like and trust you. Rather than cutting back on your marketing activities, now is a great time to maintain or even increase your marketing. Many of your competitors are reducing their advertising and marketing, making it much easier for you to stand out.

And since your customers are already doing business with you, they've already passed the "why choose you" stage of your marketing program, so future marketing activities are quicker and less expensive. Now is definitely the time to further your relationships with your customers, and here are a few ways to do it:

Communicate with your customers on a regular basis.
Write your customers a personal letter, drop them an email, pick up the phone and call with helpful information. Start an email marketing program. Send a regular printed newsletter. Despite the economy, your customers still need to buy. They may delay the buying decision a little longer, however, and you want your name to be top of mind when the decision is finally made.

Develop a back-end product or service.
Your customers already have confidence in your business, and they look to you for specific results that they can count on. So now is a great time to offer new products or services that compliment your current offering and provide definite benefits to your customers. New products and services also give you a great opportunity to get back in touch with past clients and prospects to notify them of your new products.

Create easy payment plans.
I am a huge opponent of ever cutting prices, but that's a topic for another day. However, in tough economic times, many of your customers will have financial concerns. Rather than cutting your prices, why not make it easier for your customers to do business with you? Offering extended payment terms or monthly payments can help ease the burden to your client's bottom line. If you're also experiencing a financial crunch, encourage your customers to pay with a credit card. That way, you'll get your money right away, but your customer will still be able to pay over time. New payment plans also give you a great opportunity to communicate with current and past clients and prospects to notify them of your new terms.

Package your products or services creatively.
Bundling your complimentary products or services into one package allows you to offer "package pricing". This is a great way to save your customers money without directly cutting your prices. New packages also give you a great opportunity to communicate with current and past clients and prospects to notify them of your bundles.

Create strategic alliances with complimentary businesses.
Figure out what products or services your customers buy in conjunction with yours and establish strategic alliances with businesses that offer those products. Is something needed before, during or after using your service? For instance, a realtor can create a strategic alliance with a moving service, a home stager, an interior decorator and offer those services to her clients. Again, a great opportunity to communicate with current and past clients and prospects to notify them of your new offerings.

Bundle your services with your strategic partner's services.
In a down economy, you want to make things as easy as possible on your customers. Here's how I use this strategy in my own business: I sometimes hand off my clients' "less than desirable" projects to other designers, graphic artists or writers. Since most of these are independent business people, they usually want a deposit up front. I typically pay the deposit myself, act as the contact point for the project, then invoice my client once the project is complete. My clients appreciate that they don't have to pay an initial deposit, they don't have to set up a new vendor in their accounting system and they don't have to deal with an entirely new contact person. And since I never charge my clients for this service, it's a win-win-win situation. How can you bundle your services with other providers' goods to make things easier on your customers?

Since your competitors are cutting back on their advertising, a weak economy is a great time to ramp up your own marketing program. The key is to think outside the box and do all you can to address and preempt your customers' financial concerns.

Action Item

Brainstorm a list of back-end products or services you can offer your current and past customers.
Outline two different payment options you can begin offering your customers.
Contact at least three complimentary businesses to discuss creating strategic alliances.