Experts have discussed recession possibilities since 2020 when the pandemic struck the world. Now, after overcoming the economic and social crisis, the latest inflation issue truly affected the global economy, and the labour market’s fall influences higher unemployment rates and slower hiring processes.
The recession was forecasted to happen during the beginning of 2023, but it may occur throughout the year too. That’s because usually, after high inflation, there’s always a downturn or recession going on. Since the Great Depression, the US has gone through 14 recessions, and they all affected the world as the result of a decline in external demand. They usually influenced countries with solid export sectors, eventually leading to a tragic worldwide economic situation.
Businesses are most disturbed when a recession hits, as customers are their prime way of leveraging profit. Unfortunately, when this happens, most of them close or simply gather debt continuously.
It’s always better to be prepared and lower the risks for the time being. Taking action sooner might help your company’s place on the market remain stable, so here are our recommendations on adapting to current global economic concerns.
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Concentrating on Value Rather than Pricing
More organisations aim to be value-oriented, as it’s the only genuine way of developing and growing but focusing on the product and its value leads to more people talking about it, which is the most basic word-of-mouth marketing strategy. However, it’s essential to advertise your products and services so that you aim for the final target of their use. For example, beauty products target making people’s skin more luscious and healthier and appeal to their long-term goals.
Concentrating on value means making money left aside and saving the company from potential failure. Quality encompasses multiple elements, of which profitable growth is the last, especially during tough times. Value is about differentiation and unique sales strategy, which you’ll learn to achieve in time.
A differentiation strategy aims for unique products, reduced price competition and consumer brand loyalty. Developing differentiators is one way to achieve this goal, but creating a proper brand image and sticking to it is paramount for long-term success.
Sustaining Employee Morale Instead of Personnel Discharge
Following the massive Twitter employee laid-off by Elon Musk, almost 80% of the company’s workers have been dismissed, leaving only around 1,500 of them active in the business. Ever since Twitter has pretty much collapsed, and although Musk wanted to reduce costs, the value of the company drastically went down.
During a recession, the best thing to do is to motivate employees and avoid firing them. Of course, there are situations where the business can’t even pay salaries or sustain the workflow, but until that point, you can try keeping everything in place. At the same time, not knowing when to stop and putting your employees to work under continuous stress and a possible hazardous work environment can be followed by accident at work claim, according to https://www.legalexpert.co.uk/.
Adjusting your Pricing According to Competitors’
In tough times, companies try to attract customers with anything possible, from cutting prices to offering multiple discounts. When this happens, the market is destabilised, and you also need to keep up with such changes and modify your prices to better suit clients’ demands. Therefore, you must analyse the market and local competitors to form a proper marketing strategy. If they’ve lowered their prices, for example, you may need to follow their example, as being the pricier company during a recession won’t bring you anything profitable.
Offering discounts, free newsletters and other surprises can also attract clients who remain loyal to the actual product value. But this strategy only works if you address your customer’s needs and determine what you can provide to satisfy them.
Broaden your Sales Channels to Address a Larger Audience
If Facebook was ruling the business advertising sector, now Instagram and TikTok are the head of any marketing strategy. Promoting your content through TikTok, for example, will ensure higher engagement rates, as people worldwide appreciate the short video content and unique approach.
Take the example of Duolingo, the language learning app. Although the company is one of the most calculated, its Tiktok marketing approach can be categorized as amusing. The Duo owl is used as a marionette in most videos, and he’s sparking millions of reactions worldwide from people who use the platform but also enjoy the community’s dynamic. The business analyzed the positive response from internauts and therefore continued getting more inventive with the content, despite not all being related to what the company sells.
Investing in Digital Marketing Rather than Traditional
Traditional marketing got companies where they are now, and the word-to-mouth method is still working, but it’s not enough to sustain the market for long. At the same time, regular marketing plans require considerable budgeting, which needs to be lowered during the recession. Digital marketing is also easier to manage since your team has control over all projects.
Digital marketing leverages numerous opportunities for a business, which comes in handy when tough times make it more difficult to sell. For example, it provides both local and global reach at the same time, which would be physically impossible to achieve by an SME.
Most importantly, digital marketing requires a lower cost to offer great results, such as software solutions or communication channels which are easy to learn and administer. These tools also allow for the creation of multiple strategies that target audiences more effectively and, therefore, keep the company engaged with its customers. This is how your team can develop various content types, from videos, photos, engaging texts and much more. Digital marketing can considerably increase engagement, which is why you need to try it out when faced with economic uncertainties.
Are you Prepared for the Next Challenge?
As 2023 is expected to be a tough year, companies must prepare in advance and ensure they can continue producing and marketing their products to offer customers what they need even in times of recession. However, adapting to marketing trends and prices is a must.
About Carson Derrow
