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Along with the optimism that characterizes the beginning of a new year, the entry into 2023 is also accompanied by quite a few concerns among businesses and companies, and this against the background of the complex economic situation, and especially in view of the uncertainty surrounding the economy.
A survey recently published by the investment house Goldman Sachs revealed that 93% of business owners in the US fear that the economy will fall into a recession, and about 89% of them report that inflation, problems in the supply chain and labor shortages are weighing on the day-to-day business conduct.
Despite these conditions, about -65% of businesses maintain optimism and believe that their business will continue to grow. This combination, between a controlled view of the situation, and optimism and inner faith, is in my view a correct starting point for the new year.
It is important to adapt the business plan, budget and marketing strategy to the current situation, but not to act out of panic.
A recession is a natural part of the economic cycle, and at the end of it the economy will grow and prosper again.
Even in a recession there are opportunities for business growth, finding new audiences, and adopting new technologies and tools that will strengthen and improve the business.
So how will you turn concerns into opportunities for business growth in the coming year?
Here are some tips that might help.
Efficiency and customer retention before cuts
Even before the expected recession, businesses today are dealing with inflation and an increase in inputs.
This creates a dilemma: whether and at what rate to pass on the price increase to the consumer.
On the one hand, not raising prices will eat into the profit margin, and on the other hand, raising prices too high may drive away buyers.
It's not an easy catch.
My advice is first of all to examine how the business can become more efficient and reduce expenses, not only through cuts but also by adopting solutions and technologies that help to streamline the business and save costs.
Try to look for the technologies that will help you automate processes, save on personnel or external suppliers, and reduce depreciation and increase productivity.
When you reach maximum operational efficiency, you will be able to determine your price strategy in a more calculated way.
Also, remember that in today's marketing, the goal is not only to immediately motivate a sale, but to create an interaction with the customer, existing or potential.
Invest in content that will provide your audience with added value and tighten the relationship with them.
Invest in existing customers, offer them benefits and promotions that will keep them.
In times of economic hardship, your existing customers are your greatest asset.
Constantly monitor the price environment among competitors.
At a time when customers invest more in market research, the correct timing of a sale or price reduction on certain products may win you new customers who will remember this and reward you with loyalty even after the crisis.
Invest in digital assets
Well, this is a piece of advice I've given every year for the past decade, but this year it takes on a new dimension.
In recent years, the retail world has undergone a digital transformation that has fundamentally changed the buying habits of consumers and the marketing strategies of business owners.
Today, a significant share of retail trade is carried out through online stores, and the marketing, branding and customer retention strategies have also gone digital.
I predict that the importance of digital will only increase during a recession.
It's time to take a deep look at your digital assets, such as a website, online store, pages on social networks, etc., adapt them and adapt the mode of activity and content to the current situation.
Remember that during recessions, consumers are pickier, and sales cycles may be longer.
The digital space is an ideal arena that allows us to foster a more continuous relationship with our clientele and gain their trust.
The digital space is important both at the branding level and at the service level.
Digital also allows us to constantly innovate, come up with new ideas, and adopt solutions that make the service and support more convenient and interactive, and this sends a very positive message to the potential customer.
The digital world is constantly changing and renewing itself.
If you don't feel knowledgeable enough, get the help of a professional who specializes in the digital worlds.
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Don't rush to cut marketing budgets
One of the most important steps during a recession, when there is an expected drop in income, is to become more efficient and cut expenses.
This is of course logical and true, but studies reveal that many times the first section that undergoes the sharpest cut in a business's budget is the marketing and advertising budget.
The assumption is that since consumers are less willing to spend money, advertising and marketing efforts will have limited returns, but this is a bitter mistake.
Marketing is one of the most significant tools that help a business survive difficult periods of declining consumption.
There is a well-known saying, "In times of prosperity it is important to advertise, in times of recession, it is necessary to advertise."
Advertising and marketing are our means of maintaining the presence and prominence of the business precisely at a time when some competitors are lowering their heads and reducing activity.
This period can be a good opportunity to strengthen our branding and build our reputation in preparation for the exit from the recession.
Of course, it is important to readjust the marketing messages and optimize the distribution of our budget between the various marketing and advertising platforms.
However, the approach should be more of a proper prioritization of the budget and less of a massive cut that will lead to a significant decrease in exposure.
Data is power
As mentioned, in times of recession we need to be much more focused on the distribution of our resources, and our decision-making needs to be much more data-based.
We live in an era where data is the "new oil", meaning the raw material that drives business activity forward.
There are two stages in using data: collecting the data, and generating valuable insights that lead to more informed actions.
Ask yourself, what data do you collect about your customers and what do you do with it?
In fact, all of our digital platforms are fertile ground for collecting valuable data.
It starts with the customer management system (CRM) to the analytics of the website and the engagement of people on social networks.
Make sure you have a quality CRM system that allows you to optimally manage the processes with customers and derive insights from the information you collect.
Analyze the traffic on your site to identify flow deficiencies that may be hurting your conversion rates.
Use artificial intelligence and business intelligence (BI) tools that help accurately segment behavior patterns among the target audience.
Check the profile of your social media followers to better understand your target audience and the messages that might move them to action.
Meli Bitzur Farnes is the CEO and owner of the consulting firm Tefen and the chairman of the Institute for Advanced Creation of the Ministry of Economy
Marketing and digital
The knowledge bank
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financial crisis
recession
price increase
Streamlining