Many financial analysts are strongly predicting that Australia will be impacted by a recession in the new decade. Some are stating that this may occur as early as 2020.
There are a number of indicators that suggest our country is teetering on the edge of recession. These include a stall in wage growth, a stagnant property market and poor retail sales. Arguably, the economy is already in complete turmoil.
Other countries across the globe are also experiencing a confusing economic period, including the United States and United Kingdom. Once these countries hit rock bottom, there is no denying that Australia could follow suit.
Even those who deny the probability of a recession admit that Australia’s economic climate will take a turn for the worst. Both consumers and businesses are going to feel the strain.
What does a recession mean for retail and service-based businesses?
Tough financial times will influence how and where the public spends their money. Spending in the retail industry will almost certainly decrease, and most service-based businesses will feel the pinch too.
If businesses fail to navigate their evolving markets and reach their audience, their financials will start heading southbound. In the last-minute desperation to secure clients, they will offer hefty discounts on their products. Unfortunately, reducing prices does nothing but cheapen your brand and reduce the value of each individual sale.
It is possible to continue thriving in a recession, but you need to already be developing a strategic plan for moving forward.
How can you prepare for a decrease in market activity?
Because there is strong evidence to suggest that Australia is going into recession, you should already be planning for how this could affect your business.
In this perplexing period, some business owners will panic about their potential upcoming loss of sales. As a result, they will reduce their business expenditure and put a halt to many of their marketing efforts. While this may sound like a good short term solution (reducing your expenses to make up for lower sales), it is not a smart idea for long term business sustainability.
In fact, we highly recommend that you ramp up your marketing efforts in order to create a loyal customer base that can sustain you throughout the recession. It is much easier to acquire clients now, rather than once the economic downhill has truly begun. Our suggested plan of attack for all retail and service-based businesses includes the following actions:
- Secure clients and customers right now.
A strategic marketing plan will draw clients to your business right now, while they still having spending on the mind. This is not a time to fade into the background – it is a time to bring much awareness to your brand name and solidify yourselves as top competitors in the market. You need to take action and build a strong customer base before it’s too late.
- Build stronger relationships with your current customer base.
The customer base that you have now will be the lifeboats keeping you afloat during the recession. Take the opportunity to nurture these clients now so that they remain faithful albeit the complex financial turns.
- Plan for interesting competitor activity.
A recession can cause much chaos. Your competitors are probably going to do some crazy things. If you are mentally prepared for this, you can ensure that you don’t make the same mistakes. Just because your competitor lowers their prices, it does not mean you have to as well. In fact, maintaining your price points shows confidence in your service or product quality and it could showcase you as a more stable, reliable option for customers at this challenging financial time.
- Identify the need for your product or service, and market this.
There are some things that people need, whether or not they have the money to spend on it. Food and water are two of those things. As a business, you need to establish why your customers should continue to purchase your product, even if financial times are tough. This comes down to the core functions of your product or service. If you are offering important and valuable products, then you already have this covered.
Acquiring clients through effective marketing.
Marketing in the modern-day is challenging. Therefore, you could benefit from having a professional marketing team striving for the same goals as you.
The best digital marketing agencies will offer a range of services to drive your sales objectives, including content marketing, email marketing, search engine optimisation, social media management and web development.
As a trusted digital marketing agency in Australia, we understand how to dominate your local market and be well prepared for a recession. Contact us today to discover how we can get a greater reach for your company and start to solidify your client base.