What does a recession mean for growth?
What will the next 18 months bring? And how should your business prepare for the turbulent economic uncertainty that lies ahead?
Six months into 2022, and the economy is not looking great. Inflation is the highest it’s been since 1981. Gas prices are surging above $5.00. The stock market is tanking. And signs of a recession are percolating all across the economy as the historic 2009-2020 bull run becomes a distant memory. So what will the next 18 months look like? And how should your business prepare for the turbulent economic uncertainty that lies ahead?
Let’s think back to March 2020 when the market came to a screeching halt as the Coronavirus Pandemic reached the western world and turned everyone’s lives upside down. During this time, stock prices plummeted, demand for toilet paper spiked, and businesses all around the world faced a pivotal decision:
- Let fear take over, cut spending, and pause everything—FREEZE
- Dial back spending and adopt a “wait and see” approach—FLIGHT
- Get aggressive and take advantage of the unique opportunity—FIGHT
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Those who panicked saw acquisition fall off a cliff, employees lose confidence, and profits dry up. And although it’s natural to think, you must reduce burn at all costs during turbulent times, this type of thinking can be more detrimental to your business’ survival than anything else you do.
On the other hand, those who chose to dial back spending and adopt a “wait and see'' approach rode the rollercoaster of uncertainty. These businesses oscillated between positive gains and losses as their unfocussed, noncommittal strategies failed to capitalize on the market opportunity.
So what about the companies that got aggressive? Well the aggressive companies recognized the market had softened (due to competition taking their foot off the gas) and mapped an action strategy to take advantage of the market conditions. Now that’s not to say every aggressive company increased spending and continued to operate as if nothing was happening. Clearly you must adjust to the market. But they didn’t panic. They stayed level headed, developed a strategy, and pressed forward from a place of confidence and certainty rather than fear.
18 months later, these businesses have lapped their frozen competitors (those who have remained in business) and are preparing once again to take advantage of the next market opportunity. So with looming uncertainty, how will you approach the next 18 months? We have a few suggestions…
1. Leverage Your Existing Customers
When times are uncertain, lean on those who have your back.
Your customers can be a great source of new business while also giving you insight into the things you may need to do to reduce churn and continue growing.
Here are a few ideas for leveraging your existing customers:
- Offer a referral incentive (e.g. refer a friend and get your next month free)
- Build a simple case study of a successful customer, reminding them of all you’ve accomplished together, and ask for a referral
- Incentivize customers to take a survey in order to gather product feedback that may lead to an improved user experience (and ultimately more positive word-of-mouth advertising)
2. Run Cold Outreach Campaigns
With a directive to reduce burn rate, you may need to cut spending on things like paid advertising in order to maintain cash flow during uncertain times.
But you don’t want acquisition to slow down, so now what?
Try running cold email and LinkedIn automation campaigns to generate positive conversations with prospects.
These channels require zero ad spend and can be a great way to autonomously generate sales calls/sign-ups while reducing burn.
Just make sure you follow best practices when doing either one of these things to ensure you’re respectful, appeasing the all-mighty Google algorithm, and putting your brand in the best position to create a positive relationship.
Check out Mailshake’s Cold Email Masterclass for a great beginner's guide to cold email.
3. Focus On CRO & Keep Running Paid
One of the biggest opportunities during down markets is on the paid advertising front. With competitors shifting to more conservative spending, ad networks are less competitive and more affordable when it comes to reaching your target market. This provides an excellent opportunity for you and your company to win new users at a fraction of the acquisition cost.
The caveat?
You must understand your funnel and have a process for optimizing conversion rates to ensure you’re as cost-effective as possible during this time. Check out Qualaroo’s Beginner's Guide to Conversion Rate Optimization to learn the ins-and-outs of CRO and get started on the process toward your best CPA yet.
Conclusion
Although recessions and turbulent economic periods can be a scary time for any business, it’s important to keep a level head and understand these times also offer new opportunities.
With the majority of your competition likely slowing down their acquisition efforts, now is the time to dig deep and put together a strategy for attacking the current market.
And if you need a little help getting started there… feel free to reach out. We’d be happy to learn more about your current situation and help you build a growth strategy and roadmap for the path ahead.
