“You create your life, and you can recreate it, too. In times of economic downturn and uncertainty, it’s more important than ever to look deep inside yourself to fathom the sort of life you really want to lead and the talents and passions that can make that possible.” — Ken Robinson
The year 2020, which has thankfully and finally faded into history, wreaked havoc on the economy. The COVID virus forced stores to adhere to limited capacities. Restaurants set up tents on sidewalks in an attempt to stay afloat. Construction projects ground to a near halt. Few businesses or industries were spared significant losses.
Hopefully, we are on the road to getting out from under this mess. But business owners — especially small business owners — are still fearful. As they watch the economy for signs of advance or decline, they’re naturally in a belt-tightening mindset right now.
And when thoughts turn to belt-tightening, marketing investments are one of the first things to get axed.
Fortunately, there are some things you can do to shield yourself from your clients’ cost-saving measures during economically trying times.
1. Cater to your current clients before looking for new ones
Established clients are less likely than new clients to cut your services to save money.
Your current clients know your work. You have a good relationship with them. There’s trust between you. They see the services you provide as something they need to foster business growth, and needs are usually the last things to be cut during a downturn.
Of course, you don’t want to abandon seeking out new clients altogether because current clients — for one reason or another — will eventually fade away. I suggest you aim for a two-thirds/one-third split. Spend two-thirds of your time and effort catering to your current clients and one-third marketing your services to potential new clients.
The only caveat here is that you can’t do this if you’re just starting out. In that case, depending on how far along you are, you may want to spend two-thirds to all of your time seeking out new clients. And then as your business grows, you can adjust your schedule accordingly.
2. Hold your prices and increase the value of what you provide
In economically trying times, service providers have a tendency to drop their prices when work starts to slow down. But don’t succumb to competition based on price. Instead, look for ways to add value to the services you provide.
Here’s a likely scenario: Your client tells you about how tight money is and in order to keep working, you’re tempted to offer a “recession discount.” But this opens the door to the possibility of providing the same service for less, and you’ll have a hard time closing that door when the economy rebounds.
Instead, focus on increasing your value. For example, if you write blog posts, you could begin providing two or three social media posts with each piece.
Or if you’re writing a landing page promoting a new product, you could knock out a quick single-page press release at no additional cost and give it to your client as an added bonus. The press release might take a couple of hours to write, but so what? Think of how awesome you’ll look in your client’s eyes!
3. Diversify your client base
Not all businesses will be affected by a downturn the same way. Some that rely on the self-help or DIY (Do-It-Yourself) industries will actually do well in trying economic times because people are forced to be more self-reliant. Also, while companies that serve local customers are likely to feel the effects of a down economy, those that serve state, national, or international customers may not.
The point is to diversify your client base so all your chips are not in the same basket. Think of it as the “inch deep and mile wide” approach, meaning it’s better to have a few clients on every level of business (i.e., local, regional, national, international) than it is to be stacked with only local clients.
By having a diversified clientele list, you can be relatively assured of continued work during a downturn. Some types of businesses to consider seeking out that would diversify your clientele list include Fortune 500 companies, local mom-and-pops, self-employed professionals, small/medium businesses, ad agencies and PR firms, and internet businesses.
4. Ramp up your personal contacts
Jay Conrad Levinson, author of the 1984 book Guerrilla Marketing, said “When the going gets tough, the tough make phone calls.” There is no better time than during a downturn to work the phones and contact your existing and former clients. Even if you’ve been informed that there would be no forthcoming assignments for a while, people are people, after all, and want more personal contact rather than less. And the telephone is far more personal than an email or text message. Keep working that phone and sooner or later you’ll hear, “I’m glad you called, I’ve been meaning to reach out to you about…”
5. Consider reworking your payment terms
Cash flow is a problem for businesses — especially small mom-and-pops — during economically trying times. If your usual policy is half up front and the balance upon completion (as is my standard terms), think about offering your steady clients terms that spread your fee out over three or four payments. This makes it a little easier for the smaller clients to manage their cash flow and helps keep you working throughout the downturn.
Remember, when business is slowing down, the single most important thing to do is take action. Because if you don’t, things will usually get worse — sometimes quickly. If what you are doing isn’t working, try something different, even if it’s a little outside of your comfort zone. And don’t forget that you’re not alone… we’re all in this together.
We’ll stop there for today and pick it up again next week.
Good health and good writing!