MerchantCircle Newsletter

Successful Strategies in a Down Market

MerchantCircle Journal April 2008

It’s the natural reaction of most business owners. When times are tight you tighten your belts, cut costs, and hunker down until things pick up. During these times, marketing is usually the first thing that gets cut. You’ve got a business to run. The decisions you make in these uncertain times have a dramatic impact on the long term health of your business.

In a recent survey of MerchantCircle members, we found that the 50% of spend $200–$500 per month to promote their business. With an uncertain economy, it is sometimes difficult to justify this expense. But think of the reverse. If you don’t invest in promoting your business, especially when times are tough, you lose momentum. Customers lose touch with you and your business is no longer top-of-mind when they are searching the web for the products and services you offer.

It is not much fun doing business in a down economy. But the news isn’t always bad. “I live in a farming community, where’s there’s a recession, not a lot of revenue and the local traffic has died off,” said Tina Elmore-Wright of Scents of Peace. “MerchantCircle has allowed me to keep my store going with the help of customers outside of Archer, FL who want to buy my handmade soaps.”

For some, the stress can lead to impulsive, rather than strategic, decision making. If you are committed to your business, consider using this downturn as an opportunity to scrutinize your strategies.

• Think through the long term impact of short term decisions
• Look at ways to improve productivity rather than (or in addition to) cutting costs
• Increase communication with customers to make sure they know you’re still around
• Re-engage with old customers and expand business with existing ones
• Develop an add-on strategy to increase revenue opportunities (cross-selling, bundling, etc.)

Online advertising, email marketing, online coupons are some of the most cost effective marketing tools available to local businesses. The businesses who are make it through a downturn are those that plan ahead and turn up the volume of their marketing activities. It’s fine to reduce budgets if appropriate, but don’t cut them out completely. Creative marketers use very low cost or free methods to keep their business visible.

Think “guerilla marketing” for local businesses. You can also think about doing things on a smaller scale, or trying new online methods to complement other offline strategies. Continue to invest in your marketing efforts and you can expect your business to thrive while other struggle to survive.