With news that retail sales rose 2.7% in August (higher than the 2% increase many experts predicted), many small business owners are breathing a sigh of relief. Nearly every business blogger has done some version of the “Recession-proof Companies” post, but what many fail to address is how you as a small business owner can translate these successful strategies for your own company. Should you dedicate more budget to online marketing efforts, position your brand differently, or employ several brand building strategies at once? Here’s a look at a few industries that have managed to slide through the past years relatively unscathed by the economic woes plaguing many businesses- and how you can use their secrets of success.
“Fast casual dining” (fast food restaurants) have done well over the past years. The success of businesses that offer lower-priced fare is often attributed to customers’ increasing desire for bargains, which sounds right- until you consider the case of McDonalds, which attributes a same-store sales rise of 2.6% to the launch of it’s McCafe line of espresso and coffee drinks. Conventional wisdom dictates that customers would forgo fancy coffee beverages the more financially stretched they become. But McDonalds turned what could have been a huge disadvantage into a marketing ploy: instead of going out the $5 lattes to save cash, just switch to a cheaper version. The $100 million campaign placed McDonalds as the cash-conscious alternative to Starbucks and other high-end coffee retailers.
Steal this Strategy: McDonalds’s strategy is a great example of turning lemons into lemonade. Even if you can’t position your product as the cash-saving equivalent of a pricier or luxury item, you can probably think of creative ways to turn a perceived hurdle into a successful marketing strategy. Online marketing efforts, pay per click ads, and related strategies can shift customer perception of your product in a relatively short span of time.
Alcohol is often touted as a “recession proof” product, even though this isn’t entirely the case- “value sector” brands tend to see sales increase or remain steady because drinkers mid-market beverages downgrade to more cost effective alternatives. Brands on the high end, where customer loyalty is the strongest, tend to sustain minimal damage during rough economic times, according to Beer Business Daily. Illustrative of this trend is the case of Chicago brewer Goose Island, which seen an increase in sales of its $8 and up bottles at local bars.
Steal this Strategy: The lesson here is that it can pay to position yourself either at the top or at the bottom of a specific market. Companies that produce niche products or those with a cult following seem to be less likely to lose business to mid- or low-market brands because loyalty is so strong. Building customer relationships can be as simple as offering special promotions to repeat clients or customers, initiating an email marketing effort, or ramping up a social media marketing campaign.
Medical News Today reports that revenues of pharmaceutical companies actively developing new drugs grew to $89.7 billion last year. Though some have pointed out that pharmaceutical industry growth in the US is “not sustainable” the current numbers show that explosive revenue growth is possible, even in a down economy.
Steal this Strategy: Not all drug companies are making piles of money. The largest profits seem to be reserved for those companies that place the most importance on growth: developing new therapies, obtaining new patents, and bringing new drugs to market. Innovation in any industry is key for long term success, but it can also drive short-term revenue, as well. Now is the time to evaluate growth strategies and get customers excited about new product or service offerings.
Some of the industries thriving in the recession are easy calls- people always need to eat, and take care of health needs, for example. Success in bargain markets is equally easy to predict. Don’t despair if your business isn’t serving a “steady demand” industry or producing low-cost goods. High-end retailers can also fare well in an economic downturn if they are strategic with sales and marketing efforts. Apple, the stylish innovator that brought the world the iPod, the iPhone, and a whole host of other sleek, easy-interface devices is the perfect example of a high-end brand doing better than expected in an economic decline.
Steal this Strategy: Apple capitalizes on all of the strategies employed by the other companies described: customers are fiercely loyal (even if prices are high), it positions itself as a “better” alternative to existing offerings (PCs, music players, etc.) and it manages to create huge excitement for even less than monumental innovations (iTunes 9). It does all of these things incredibly well. The lesson here: combine your strengths into a comprehensive marketing and sales strategy. Focusing on one technique might work well, but integrating several well-targeted efforts might work even better.