The recession taught consumers many important lessons about their spending habits. While before the recession, many consumers were much more comfortable spending money on luxury, comfort, travel, and other "unnecessary" costs, it seems to be the case that now a large majority of consumers are more focused on counting their coins. Though the economy had the effect of making many consumers more "responsible" about where they spend their hard earned money, in many cases, these trends actually ended up being damaging to small businesses.
One way that small businesses can recover from the shift in consumer preferences is to learn how best to market their product to the new, frugal customer. As customers are tightening their belts, businesses can respond by marketing their product in a new way that satisfies their clients' preferences. Consider these few tips for marketing to cost-cutting customers:
- Show Some Empathy
Many customers are seriously struggling right now. With unemployment at one of the highest rates it has reached in decades, it can add insult to injury to ask customers to buy something they can't afford or don't need during this stressful time. If you choose to market your product in a way that tells your customers you know that they're struggling and that you feel it too, they will be more likely to buy from you. Explain to your customers that even in a recession, your product can be useful to them. Think of creative reasons to tell your customers why your product is worth their money.
- Run experiments with discounts
Discounts can be your business' best friend in a bad economy. Try implementing various discounts and/or coupons to see what kind of response you get from your customers. Even with the discount in place, you may find that your business is extra profitable because you have tapped into a new customer base. Customers will also appreciate the fact that you are taking into consideration that they have less money to spend.
- Create customer loyalty and reward programs
Now is an especially good time to come up with creative loyalty programs to keep your customers coming back to you. Your customers are more focused than ever on saving money, so if buying from you a few more times enables them to receive a free product, they might prefer you to competing small businesses. (Read other tips on beating small business competition).
- Tap into your customer's guilty pleasures
If your product or service falls into the category of "luxury" or "extraneous" spending, you should try to embrace the fact that you are selling a "guilty pleasure" instead of trying to pretend like it's something customers truly need. Whether you sell desserts, spa treatments, or jewelry, you have to convince your customers that no matter how frugal they may be, buying y9our product will be rewarding for them in some form. Market your product by emphasizing its the benefits it has in terms of reducing stress, making your customers feel good about themselves, or simply adding a little happiness to their day. Everyone could use a little cheering up - and sometimes even the most frugal of customers will be willing to dish out some money if it makes their day a little more enjoyable.