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There are offline businesses going into bankruptcy everywhere. In a time of prosperity, people rush to buy the latest electronic gadget or to get the latest bath accessories. So, your market niche may have done well when the economy was doing well, but now you've noticed a down turn in purchases. What's going on? Don't assume that this is the result of the economic recession; instead, be proactive and try to determine what factors are affecting your sales. It could be the economy, but it could also be various other factors: A shifting demographic, poor sales strategies that don't work in a downturn, or bad or no advertising campaign.
Shifting Demographics
When you set up your business, you probably had a good idea of what demographic you wanted to serve. With the recession, the demographic you serve may have had shifts in their income level or even living situations. Take a look at the boomer generation. They are experiencing an epic shift in their income as they face retirement, with battered retirement funds from poor market results. Even though you could rely on this demographic to purchase specific products and services as they continued to dominate the market, this may not be true inanymore. For this reason, it may be time to re-evaluate your demographics and buyers.
Sales Strategies
Running the same promotions without the results? That's not really surprising considering that the psychology of the market place has changed dramatically and that consumers may not be in a situation to buy. Before the recession, status was a great psychological trigger to create a buying opportunity. The same trigger may be meaningless in a downturn unless you are marketing to the very rich. The biggest strategy for the downturn is going to be value offers; you need to make sure that many of your strategies reflect value.
Bad or No Advertising Campaigns
The immediate impulse of business owners in a downturn is to stop investing in advertising since there are fewer buyers. This is a mistake and can be setting yourself up for poor sales later on. If you haven't evaluated your advertising campaign, you need to do that now. Look at where you are advertising, what psychological triggers and sales strategies you are using, and whether you can provide value offers that put you ahead of the competition during these tough times.
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