There’s no way around it, recessions are a terrible but natural consequence of a free economy. While there is no real way to accurately predict when a recession will hit (some say we’re already in one) there are some principles that can guarantee you come out on top as a business owner.
In search of these guiding principles, we sat down with Darren Cabral, the CEO of Canadian social media marketing agency Suits Social. After his experience working with hundreds of businesses across dozens of industries around the world, Darren’s come up with a few tips and tricks to not only help you survive, but thrive during a recession.
Focus On What You Can Control
No matter how bad or how chaotic a situation, there’s always something you can control. This is true in both your personal life and business, says Darren. During a recession companies will go bankrupt, your customers will slow or stop spending, your bank might recall a loan, etc. None of these things are within your control. The worst mistake you can make is getting caught up in the things you can’t control, instead of focusing on what you can control.
For example, you can control what time you wake up, what time you get to the office, what attitude you have towards the day, etc. But on a more practical note, you can also control how to service clients that are sticking around. You can go above and beyond, follow up and ask for feedback, give them free gifts, make them feel as appreciated as possible to ensure that no matter the economic condition you’ll have their support.
You can also control what expenses you can cut back on and redirect funds to more “growth focused” opportunities that can help offset any losses to your bottom line. For example, cancel unneeded software subscriptions and double down on your marketing efforts.
Lastly, Darren shares that the most powerful thing you can do is find new creative ways to generate revenue from new product offerings or by reaching new customer segments. For example, during the Covid-19 pandemic large restaurant chains like The Keg transitioned to selling “done-for-you” meal kits when they had to close their doors to patrons.
Understanding Trends
If you’re feeling uneasy about a possible recession and aren’t quite sure how it will affect you, there’s good news. Darren, a self proclaimed history buff, wants to assure you that history almost always repeats itself. Although it’s no guarantee, looking at how past recessions impacted your industry in general is a great way to predict what you’re going to see in your business should a recession strike again.
In general though, people become uneasy with their fiances when a recession hits and tend to keep a tight hold of their money. Many save every dollar they have, cut back on expenses, cash out any stocks they might have had tied up, etc. When communities hold onto their money throughout a recession it increases the severity of the recession and results in it getting worse. Non-essential products and services will be the first things people cut back on when cutting back on expenses.
Understanding these trends will help you prepare your business, re-evaluate your products/services, and have a look at your finances before things get worse. Ask yourself, if a recession were to strike today… how would your business be impacted based on what you’ve seen in the past? Then simply make any adjustments necessary to mitigate those issues in the future!
Expand When Everyone Else Contracts
When asked about the number one thing business owners should be doing to ensure they thrive during a recession, Darren referred to a quote by Warren Buffet; “Be fearful when others are greedy and be greedy when others are fearful.” The same is true about growing your business in a recession. Most businesses start cutting their biggest expenses, which for many is their wages or marketing budget.
The problem with this is when a business decides to stop marketing and advertising through a recession to save money, they are actually guaranteeing that they’re going to see a drop in sales. With customers leaving, and no new ones coming through the door, there’s only one logical result. This is the real reason why businesses fail in a recession!
What you should be doing is taking this once in a lifetime opportunity to steal as much market share as possible from your competitors who are slowing down. Spend as much as possible on revenue generating activities like marketing & advertising, especially on platforms where you can track and measure an actual ROI. Such as Facebook Ads, Google Adwords, LinkedIn Ads, etc. And spend less on everything else!
About Darren Cabral:
Darren is the CEO & Head of Operations at Suits Social Inc. one of the first dedicated social media marketing agencies in Canada. Their company has helped hundreds of businesses scale from 6 to 7 and even 8 figures using a proprietary social media advertising strategy. The strategy is unique to their agency and has been used to successfully drive growth and measurable ROI through primarily paid as well as organic social media marketing campaigns.
Want to learn more about how Darren and his team at Suits Socal can help you set up a recession proof online marketing strategy? Take the first step & book an exploration call now: https://www.suitssocial.com/exploration
