The Federal government on November 21st, 2020 revealed Nigeria had slipped into its second recession in five years (the last was in 2016) and the worst economic decline in almost four decades.
Times have been really hard for both small and big businesses. Hard economic times caused by the COVID-19 pandemic have affected customer demand and sales coupled with the adverse foreign exchange situation which has skyrocketed the cost of doing business.
But even in these hard times, it’s very easy for entrepreneurs to get caught up with blaming external factors for our business woes which should not b so.
Instead of always whining and murmuring, here are some ways to keep your business afloat during a recession.
1. Customer service is key
What kind of products do you sell to them? Do you always leave them with products or services that make them feel like they got value for their money? Do you leave an indelible impression in their minds after they have patronized your business?
Do your staff understand how important your customers are to your business? Is there a minimum quality standard of service delivery that your employees are required to provide to your customers?
Have you clearly defined how you want your customers to feel after patronizing your business?
It’s very easy to forget that to achieve customer satisfaction, retention, and loyalty, you have to provide exceptional service delivery.
2. Keep track of what your customers want
How well do you really know your customers? No matter what you sell, everybody cannot be your customer. And the sooner you clearly define and discover your ideal and target customers, the better for your business.
Are your customers’ people from a particular location, age group, gender, occupation, ethnicity, income level, education level, or what exactly?
Are the bulk of your customer’s salary earners, business people, house-wives, petty traders, school children, small businesses, or college students? Do they belong to the upper class, middle class or lower class?
Consumers behave differently during hard economic times, depending on their need or want for your product or service. And if you don’t know who the bulk of your customers are, it’s almost impossible to get understand how they would react during an economic recession.
If you know your customers, you will learn how they think and behave. And if you know how they think and behave, you can adapt your products, services, prices, and offers to suit their budget during hard economic times.
In order to understand your customers, you need to apply yourself a lot more than you might be used to. You might need to carry out surveys from your target audience to understand what makes them tick and obtain information to tailor your product/service offerings appropriately.
The truth is, if done properly, the information obtained through this process can translate into increased profitability for you and your business.
3. Find ways to retain your customers and get them to refer others
One of the major problems a lot of businesses face is customer retention. That is, they spend time, energy, and money on attracting customers only to lose them to the competition after the first or second transaction.
One of the best ways to increase your marketing efforts is by starting from within. Before you start spending any money on glitzy marketing, start by using the bird you have in hand to get the ones in the bush. J
Find creative ways to reward your loyal customers. Find ways to reward those who have been with you the longest. Give them something to inspire them to rave about you to their friends, family, neighbors and colleagues.
Your existing customers are your best marketers. They’ve known you the longest and if you ask, most of them will gladly promote your business for free in person, or online.
4. Create an online presence
Another option that is common however not every business owner really takes advantage of is creating an online presence for your business. No matter what you sell these days, it’s almost considered an “abomination” if your business cannot be found online.
When people hear of a business, product, or service these days, they first go online to Google it. And if you’re not online in any way – social media, webpage, even WhatsApp groups, etc. – then you’ve ruined that first impression.
Social media accounts, handles, and pages are free. It will take less than 2 minutes to get them, so please do.
If you already have a presence, be more active on them as that’s the way to get customers and sales at this time.
5. Keep financial records
Without keeping proper financial records, how will you know if your business has enough money to survive? And how will you recognize the point where you need to get more capital for your business, like raising external capital for example.
Business is mostly a numbers game and your financial records are the lenses through which you see if those numbers are adding up, or looking down. Your financial records help you understand your profitability, your investments and your financing requirements.
Apart from cashflow, profitability is another important metric you need to keep your eyes on. And the truth is, you really can’t tell if you’re making a profit or less unless you’ve been keeping records of your sales and expenses.
You need to have a system in place for capturing these records. It could be a record book, a Microsoft Excel sheet, or a piece of software. What you use to keep records really depends on the size and scale of your business.
Recording your financial information is only the first step. You need to analyse the information. That’s how you get insight. And insight is the thing that gives you the advantage to make effective decisions about your business.