How to Increase Your Market Share During a Recession

How To Increase Your Market Share During A Recession

As governors across the country begin to reopen their states, business owners are re-examining their marketing budgets. But will recession marketing create an opening for you to reach new customers? Countless examples from history say yes. Entire industries are dealing with intense risks. Millions of Americans are preparing for extended unemployment. Business leaders, economists, and elected officials are predicting a major downturn for the global economy. Despite all this – or in fact, because of it – the time is now to expand your marketing budget.

Historians have counted at least 47 U.S. recessions since the mid-1800s. During a recession, the first major expense that a company cuts is typically its advertising. After the economic downturn in 2008, ad spending by U.S. companies fell by almost 13%. Today, we have access to almost 100 years of data that correlate short-term budget cuts with long-term market loss. The results have consistently favored companies with a long-term strategy in mind.

Recession Marketing Throughout History

There are a few examples of brands that catapulted to newfound success with recession marketing. Going back nearly one century, these brands demonstrate the benefits of recession marketing. Those advertisers that maintained or grew their ad spending increased their sales and market share during the recession and beyond.

Breakfast Cereal

In the 1920s, Post Cereal was the industry leader when it came to ready-to-eat breakfast. During the Great Depression, though, Post significantly shrank its marketing budget. Rival Kellogg’s Cereal during this period doubled its ad spend, investing heavily in radio. They even introduced a new cereal called Rice Krispies with colorful cartoon mascots. This move led to Kellogg’s growing its profits grew by 30%. Fast forward to today, Kellogg’s is still the the category leader, a position it has enjoyed ever since.

Automotive Manufacturing

The two-year American recession of 1973-75 was a consequence of the global energy crisis. Gas shortages became a normal part of life. At the end of 1973, the Toyota Corolla was second to the Honda Civic in fuel efficiency for the first time ever. Because Toyota was boosted by strong sales, their initial urge was to drop their ad budget. They resisted. By sticking to its long-term marketing strategy, Toyota eclipsed Volkswagen as the leader in U.S. car imports by 1976.

Fast Food Restaurants

In the recession of the early 1990s, Taco Bell and Pizza Hut jumped ahead when McDonald’s decided to limit its advertising budget. During this market reorientation, Taco Bell and Pizza Hut increased their sales by 40% and 61%, respectively. McDonald’s sales, meanwhile, declined by 28%.

It’s easy to see that recessions are a golden opportunity to expand if you play your cards right. Don’t get swept up in the wave of businesses buried under the next economic downturn. Follow these tips to make sure you come out of the recession on top:

Take advantage of lower advertising costs

Advertising costs are already below their market average. With so many more Americans at home, cost-per-click metrics for both Google and Facebook are at record lows. There are fewer companies taking up inventory, which translates to fewer companies competing for consumer attention. That essentially means that paid media is cheaper and trending to stay this way for a while.

Social media platforms make a huge share of their revenue from advertising. Ad inventory is always available. Expert advertisers can take advantage of this newly saturated market to reinvent their brand at record low media costs.

Adapt to trending media platforms

Savvy brands look for ways to stay topical during difficult economic times. Today, millions of consumers are working remotely, shopping on Amazon, and communicating through video chat applications. This allows smart advertisers to create new opportunities where they can display empathy and connect with their consumer base. Only those who stay ahead of the volatile marketing environment will emerge unscathed. Interactive web design is a great example of a consumer-centric approach to meet heightened demand.

Expand your audience

During a booming economy, major brands have powerful budgets to experiment with their advertising strategy. This approach that makes media more expensive for smaller businesses to try and compete. As big brands reduce their spending, there is no clutter to cut through. Small businesses have an opportunity to speak candidly about a product or service. Once the economy returns to normal, you’ll have gained an entirely new customer base. Furthermore, this base will be difficult and expensive for your competitors to steal back.

Display strength through branding

Brands can project to consumers what we need most now: leadership, confidence, stability, and entertainment. Governments play a huge role in this, but brands that demonstrate strength always leave a lasting impression. We tend to forget the brands that go dark. To better compete, promotional offers and inspiring content can convey feelings of authenticity and security. Similarly, interactive web marketing can produce a visual appeal to capture new customers in your sales funnel.

Knock out your competition

Many small businesses have a limited budget for recession marketing. During a recession, it’s easy to hold back on advertising for short-term gains. But all that really accomplishes is to create a market opening for more savvy competitors. With effective interactive web marketing and interactive web design, companies can step in and build relationships with customers at their most vulnerable times. This also presents a significant opportunity for a brand to reposition and introduce new goods or services.

Recessions will always pose a fundamental risk to your livelihood. We can look to the past and see how others have navigated recession marketing. When we do, it’s clear that reducing ad spend will do more harm than good. Brands that stay the course get a long-lasting boost. By expanding your market share, you better position yourself for future recessions as well.

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About Worcester Interactive

Worcester Interactive is a full-service digital marketing firm in Worcester, MA, specializing in responsive web design, social media marketing, search engine optimization (SEO), and digital advertising. We build websites and create online marketing campaigns for businesses looking to grow their online presence. We love taking on challenging projects that require full-on content strategy, thoughtful design, demanding development, and ongoing, interactive web marketing.

Can Your Business Survive a Quarantine?

Can Your Business Survive a Quarantine?

March 11, 2020
by Abtin Pazooki

As the novel coronavirus, or COVID-19, continues to spread, countries like China, Italy, and South Korea have enacted varying levels of quarantine. Governments have leverage to protect their citizens, but it falls on individual companies to protect their bottom line. So, what should your business do during a large-scale quarantine?

Keep Your Employees Safe

Encourage them to practice social distancing. For starters, here are a few guidelines you should take:

Limit physical contact

  • Avoid touching their faces
  • Cover their mouths and noses when sneezing and coughing
  • Practice liberal application of hand soap and hand sanitizer
  • Increase airflow in the workplace by leaving doors and windows open

Sanitize meeting areas

  • Hold meetings in well-lit, well-ventilated spaces
  • Consider postponing large group meetings and conferences
  • Cancel any pending appointments that require travel

Practice safe eating habits

  • Prevent food sharing
  • Emphasize health screening for food courts and cafeteria staff
  • Maximize hygiene regulations for any staff whose positions handle food preparation

Stay home if…

  • They’re pregnant or nursing
  • They’re displaying symptoms of an infectious disease
  • Someone in their household has symptoms of an infectious disease

Social distancing can limit cross-contamination among employees, but once a quarantine hits, these preventative measures might not be enough. To fully prepare your business for a quarantine, consider the following disaster-proof measures:

Have a Disaster Recovery Plan

A quarantine is an extreme last resort with potentially dire consequences for the economy. Under CDC guidelines, quarantines last an average of 2 weeks, but can extend to a month or more in particularly severe cases. If your company isn’t disaster-ready yet, you’ll need to develop a business continuity plan.

If you wait to disaster-proof your business, you could face a major disruption during a quarantine. You should work with your internal I.T. department to develop a backup and disaster recovery plan to protect your I.T. infrastructure. If you don’t have an in-house I.T. team, you should consult a managed service provider such as Cinch I.T. to protect your business. Every business owner should have a business continuity plan for a disaster, whether it’s a quarantine, fire, or inclement weather.

Digital Communications

The most industry-specific challenge of operating during a quarantine is communication. If you’re part of a business-to-business (B2B), software-as-a-service (SaaS), or direct-to-consumer (D2C) company, you’re only limited by the technology at your fingertips. Apps, emails, orders – these can all be accessed remotely during a crisis, quarantine or otherwise. For business-to-consumer (B2C) companies though, your storefront IS your business. Fortunately, there are still steps you can take to avoid disruptions, no matter your business model.

Cloud-Based File Storage

Cloud computing can host all of the tools, services, and documents for your day-to-day operations. Most businesses back up their important data through a file hosting platform like Dropbox or OneDrive, or SharePoint. If your company doesn’t have a subscription to one of these services, the lead-up to a quarantine is an extremely relevant time to fix that. With a decentralized file server, you can access all of your crucial reports, spreadsheets, and reminders from any satellite location.

Voice-Over-Internet-Protocol (VoIP) Phones

If you work out of an office, you can use a VoIP system to keep your telephone directory running. Providers like Grasshopper and Bria feature smartphone apps as part of their virtual phone networks. With total coverage, you’ll be able to reach your staff and clients as if you were still at your desk.

Video Conferencing

Another way to facilitate communications with staff and clients is via remote video conferences. Platforms such as Google Hangouts, Microsoft Teams, and WebEx include options for video calls as well as screen sharing. If your business normally schedules a lot of face-to-face meetings, video conferencing is your best fallback plan.

Work from Home

Between full-time and self-employed positions, the Bureau of Labor Statistics reports that nearly 25 million Americans work from home on any given day. If your area declares a quarantine, the government will often designate “non-essential” personnel to stay home. Depending on your industry, this may be as easy as taking your work laptop home. For most industries, though, it requires a few more steps.

If you can’t work at your office, how should your business adapt?

Adapt Your Business Model

China’s Wuhan Province was the epicenter of the COVID-19 outbreak. During its initial quarantine, businesses that offered delivery services were the only ones left standing. When people can’t leave their homes, delivery apps like Instacart and DoorDash take off. Retailers that have eCommerce websites are able to mitigate the decrease in foot traffic by allowing consumers to place orders from home. If your website lacks an eCommerce platform, contact us today for a free website consultation that could transform your business.

The CDC recommends “an abundance of caution,” but it’s ultimately up to you and your employer to decide if you count as “essential personnel.” Doctors, police, and firefighters are always in demand. Gas stations need to keep their doors open. You may need to adapt your business model to focus on delivering your goods and services directly to consumers’ homes.

If your business relies on a point-of-sale (POS) system, consider switching to a mobile payment processor like Stripe or Square. This way, you can still sell to consumers while you’re away from your normal location.

Online Payments

Paper currency is a known contaminant in the spread of infectious disease. If you can find a substitute for cash – like eCommerce functionality or mobile credit card processors – you should roll it out sooner than later. If you delay, a quarantine might render cash payments impossible. Furthermore, by eliminating in-person monetary transactions, you can limit your public health risk.

Remote Deposit

Similar to the rationale behind online payments, you’ll want to avoid physical checks and invoices where possible. Have your accounting department sign up for online bill payments instead of old-fashioned paper statements. Likewise, if any of your employees receive their salary through cash or checks, you should update their payroll to direct deposit instead.

Security & Monitoring

Of course, it’s never ideal to leave your storefront or office totally empty for an extended period of time. Make sure you monitor your physical location with security hardware like SimpliSafe or ADT. As an added benefit, you can use these systems to monitor visitors to your business while it’s still open.

The CDC recommends an abundance of caution during any quarantine. Overall, be mindful of any contact you make in your workplace. Objects with high rates of microbe transmission, like doorknobs, faucets, and printers, should be cleaned and disinfected regularly.

For more information on COVID-19, please consult the CDC’s website or contact a medical professional directly.

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