Strategies for a Tough Economy: Grab Market Share
Quick Answer: To increase market share in a tough economy, keep marketing when competitors cut it, even if you need creative and inexpensive ways to do it. Use the extra revenue to pay down debt and build savings, then invest in efficiency and buy useful assets when their prices drop. Growth makes a business resilient.
Resilience in a Tough Economy
Making your business more resilient is important for surviving a tough economy. Resilience means being better able to handle drops in revenue, economic uncertainty, sudden changes in customer preferences, and having increased access to liquid assets such as cash and credit.
Naturally, many businesses have seen a drop in revenue and profit, or have shut down, due to restrictions around COVID-19. Some economists, governments, and financial institutions expect things to become more challenging before the economy truly turns around and begins growing again. This is despite the reopening of businesses as COVID-19 restrictions ease at the time of this writing.
Aside from the virus, there are also some economic cycles at play which are affecting and will continue to affect the economy. You can learn more about them in The Sale of a Lifetime and Zero Hour by Harry S. Dent Jr. as well as some interviews with Ray Dalio. Note that the dates that Harry S. Dent Jr. predicted things would happen need to be pushed back due to the central banks continuing to print money to prop up the economy before the pandemic.
How to Increase Market Share Through Marketing
One way to make your business more resilient is to grow and increase your market share. While some of your competitors are struggling to survive, now is the time to make a push to grow. Ideally, businesses would have done this before, but now is the second-best time. If your business is struggling to survive, then growing is probably a requirement for surviving.
Businesses often cut marketing when times are tough. It's one of the first expenses to go. However, it's also the way to keep your business known in the marketplace and generate leads. Do the opposite of what others do. If your budget is tight, you might need to find creative and inexpensive solutions for marketing and sales.
Benefits of Increased Market Share
Increasing your market share and revenue allows your business to be better able to absorb potential drops in the future. We recommend growing at least 30% in case there is a significant drop in the economy in the near future. With the increased revenue, pay down debt and build up savings to increase your access to cash and credit when you need it.
The savings and credit can be used to invest in relatively inexpensive solutions that will help your business be more efficient, allowing it to cost less to operate and serve an increased volume of customers. An example would be new processes or automation software.
In the future, the prices of useful assets such as business, equipment, labor, real estate, and more will drop. The savings can be used to purchase those at a lower price, when the time comes, because you will be prepared. Those assets will help your business be stronger and grow further than before.
Growing Your Market Share
For help growing your market share in these trying times, please contact us for a free assessment. You can also learn more about our products and services. We look forward to hearing from you.
By RSC Business Group
- Resilience means handling revenue drops, uncertainty and changing customer preferences, with access to cash and credit.
- While competitors struggle, push to grow your market share.
- Don't cut marketing when times are tough; find creative, inexpensive ways to keep it going.
- Use increased revenue to pay down debt and build savings.
- Savings let you invest in efficiency and buy useful assets when prices drop.
Frequently Asked Questions
Should I cut marketing in a recession?
No. Marketing is often one of the first expenses cut, but it is also how your business stays known and generates leads. If the budget is tight, find creative and inexpensive ways to keep it going.
How much should a business grow to be resilient?
RSC recommends growing at least 30% in case of a significant drop in the economy, and using the added revenue to pay down debt and build savings.
What should I do with the extra revenue?
Pay down debt and build savings, which increases your access to cash and credit. Then invest in efficiency, such as new processes or automation software.
Why build savings during a downturn?
When the prices of useful assets like equipment, labor and real estate drop, savings let you buy them at a lower price and grow further than before.