Tough economic times are dark for small business owners. How do you decide how to spend your scarce dollars when customers are dropping like flies?
We are advising our clients and colleagues to take a counter-intuitive approach to survival: double down on marketing & branding to retain customers, gain market share, and stand out with a unique brand.
First: Stop the bleeding
Desperation breeds creative problem-solving – and few businesses are as desperate as they have been in the last 45 days. Even “essential” businesses are seeing clients and customers disappear due to uncertainty, sudden losses of funding, and fear of coronavirus infections.
It’s hard to see opportunity when customers are bailing, so stem the tide by proving greater value to current clients. This core of your business may not last, so earning more of their business is a both a survival tactic and a best practice.
“Somewhere between 20% and 70% of new customers will decide to stop doing business with you in the first 100 days” of a contract, customer retention expert Joey Coleman recently told us in an interview. Reversing that trend by just five percent often increases profits by 25 percent to 100 percent because “each dollar spent by an existing customer becomes more profitable, and there is no need to spend as much money on sales, marketing, and acquisition.”
In a time when customers are few and revenue is low, Coleman’s approach is the perfect tourniquet for small businesses. Learn more here.
Second: Maintain or increase your marketing budget
One industry which is collapsing during the crisis is advertising. Companies large and small – local theaters and car dealerships to major sports leagues and Disney World – are pulling scarce dollars from newspapers, online, TV, and radio.
This means that supply-and-demand favors the small business owner who chooses to advertise against the tide. Online marketing guru Neil Patel recently encouraged this approach because online ads are cheaper but getting more clicks. Statista specifically noted that Facebook’s average cost-per-click in March was nine cents compared to 11 cents in January. And my business partner is receiving 65 percent more radio ad space than normal — for free! – with one of his companies solely because his firm is not pulling ads from the airwaves.
What this means for small businesses is that just maintaining your current marketing budget brings more value than ever; increasing your marketing when your competitors are doing the opposite could make you the go-to company now and when the economy opens up again.
Third: Stand out with your customers, staff, and network
When everyone else is abandoning marketing, just being present to current and potential buyers gives you a huge advantage. You are the one-eyed man (or woman) on the island of the blind.
Here are four ways to turn today’s marketing into unique long-term branding:
- Take advantage of social distancing to establish deep personal relationships with customers. Check in on how people are doing with their work, health, and families. Earn “know, like, and trust” now so that when the economy opens up, you are their first and only option.
Read more on this strategy from revenue generation specialist Susan Trivers.
- Offer low-cost, high-value services or products.
- Business consultants like financial advisors and PR professionals can provide tailored, COVID-specific strategies to get clients through the current crisis – and earn trust that turns into months or years-long consulting contracts.
- Provide COVID-specific value to your community. Businesses large and small are doing exactly that, and getting significant publicity locally, statewide, and nationally. And whether your distillery is now producing hand sanitizer, you’re feeding medical personnel, or you’re giving savings back to customers, your target market will notice.
- Recommend best practices which clients can use until they hire your company. One PR firm sent a white paper on the industry’s adjustment to the COVID-19 crisis; a law firm’s e-mail newsletter provides valuable analyses of the public policy response to the crisis; and one of my firm’s clients is helping its small business customers navigate the changing financial landscape.
Survival requires thinking differently
Getting through the current crisis may require radically going against the tide. By investing in current buyers, increasing outreach to customers who will become buyers, and seeking to be unique in the marketplace, your odds of survival will increase and you’ll create a strong foundation for long-term success.
This too shall pass. Contact us today to increase your chances of being there when it does.