FOR SMALL BUSINESSES without large cash reserves, economic downturns can be especially tough. To stay afloat, you need to keep the cash register ringing even when customers are cutting back — and that means thinking outside the box.
One of the biggest mistakes small business owners make is cutting down on marketing when they start to get strapped, says Harry DeWolf, district director for the Small Business Administration in Portland.
“You’ve just got to get more creative,” he says. “Visit potential clients instead of
sending them stuff. Call them or email them. Work those lists, and make the message more personal.”
Another strategy is to form alliances with other businesses to stretch marketing dollars, says Shelah Johnson, CEO of Techchex, a Portland-based tech firm that serves small and mid-sized businesses. Identify noncompetitive businesses that share your target
consumer and create co-op ads to benefit both players. Refer business to other firms and request they return the favor.
You can turn customers into marketing allies, too. Viral marketing, such as email blasts that can be forwarded to others, are an easy way to expand your base without any extra effort or expense, Johnson says.
One tactic to avoid, though, is discounting. “It decreases the perceived value of your product or service,” Johnson says. Instead, offer value-added incentives, such as one month of free service when a customer pays for a full year.
To compete with big-box competitors that do slash prices, step up the service. Look at what the competition doesn’t have or do and fill in the gaps, DeWolf says.
Spending money might seem counterintuitive at a time like this, but one investment that could really pay off is a website. “If you don’t have one, it’s like being invisible to the world,” Johnson says.
Above all, both experts agree that the key to driving sales in a down economy is to be proactive and stay positive.
“In many ways, small business is more agile than enterprise business,” Johnson says. “We know how to be resourceful. Small businesses have cockroach in our DNA: We will survive anything.”