Inflation, bear market, recession. These are scary terms when you own a business. But by staying calm and focusing on your branding, you can turn economic uncertainty into opportunity.
Why Branding Is Essential
We discuss in a separate post why marketing and advertising can’t stop when times are tough. But where does branding come into play?
As customers tighten their budgets, they pay more attention to making sure they get their money’s worth from every purchase. Don’t assume that means they always go for the cheapest option. Let’s say they have an urgent plumbing problem. Of course they don’t want to be gouged, but they also want to be confident that they won’t be paying to have the same problem fixed next month. Even when watching their spending, many will pay a bit more to make sure the job is done right.
Does your messaging properly convey your expertise? If a customer visits your website, do you give them a reason to trust you as an authority over cheaper options? If not, this is the perfect time to reevaluate your messaging.
Investing in strong brand messaging early is one of the best ways to prepare for an economic downturn. If, by the time markets go south, you’ve already built up your business as the authority in people’s minds, you’ll be better equipped. But even if your branding isn’t completely dialed in yet, it’s not too late.
Stronger Website Messaging
Back to your website messaging. Does it succinctly describe what you offer and for whom? Do you establish empathy with consumers by acknowledging a problem? Do you then establish your authority as the top solution? Are your calls to action clear?
Show your site to people outside of your organization who you trust to offer honest opinions. Ask them to look at your website for 10 to 15 seconds and then ask them to answer the above questions. If they can’t easily spit back what you offer, who it’s for, and how to buy it, your messaging needs work.
Should I Offer Discounts?
During times of economic uncertainty, consumers are naturally more price conscious. It may make sense for you to offer your customers price breaks during this time, but be careful to do so in a way that doesn’t burn your name into the public’s mind as a cheap option. You don’t want to get through this rough patch only to find yourself continuing to compete on price.
Positioning matters. Whatever the economic climate, work to position your brand as the strongest solution to your customers’ problems. If people trust your expertise in solving their problems better than anyone else, pricing will be a secondary factor in their decision making.
Making “low prices” your primary value proposition might work at first, but if a competitor is able to offer lower prices, what then? When the economy recovers, having positioned yourself as the cheap option will leave you with bargain-hunting customers. Meanwhile, people with more money to spend will assume your brand is a low quality option and take their dollars to a more well branded competitor.
How to Lower Prices Without Hurting Your Brand
Instead of leaning heavily on discounts and coupons, try these methods of giving consumers a price break while maintaining your high-quality positioning.
- Customer loyalty rewards: Retaining customers costs less than acquiring new ones. And during a recession or other downturn, you’ll need your loyal customers more than usual. Show them gratitude, and they’ll be less likely to make your business one they cut out of their budget.
- Bundling: Find some of your product or service offerings that make sense to be purchased together, and make the bundle cost less than the price of buying them individually. This doesn’t diminish any one item’s value. Instead it rewards customers for making a larger commitment to your business.
- Price anchoring: When offering a discount, be sure to show the normal price. Seeing how much lower the current price is gives customers the feeling of saving money. It also reminds them that this discount may be temporary and that it’s likely in their best interest to purchase now rather than wait.
These tactics, combined with messaging that positions your brand as high quality will keep you in a good spot once the economy bounces back. Training customers to expect low prices every time boxes you in once it’s time to raise prices back to normal levels. Don’t put yourself in that trap.
Unsure about how to use positioning to your advantage during tough economic times? Contact Superkick for a free consultation.