2024 came with hardship for many traditional businesses here in Kaduna and in Nigeria, with many looking for different ways to cut down costs to survive.
One of the very first Naira that a small business usually looks to cut is their marketing budget, they spend less trying to brand and advertising their business because it’s a discretionary cost, it’s an expense that does not affect the continuation of making, purchasing and selling their products or services.
But this is a big mistake. In most businesses, cutting this budget often leads to a decrease in sales, and puts further pressure on the business being able to survive.
McGraw-Hill Research conducted a study of the U.S recession from 1980-1985, and out of the 600 businesses analyzed, the ones who continued to maintain or increase their marketing budget hit a 256% growth by 1985 over their competitors who have eliminated or reduced their marketing budget.
As your competitors are cutting back, especially big brands, this opens an opportunity for you to attract new clients, to gain a whole new customer base that won’t go back to your competition, even after the economy recovers.
Here’s a few suggestions that may help you take advantage of this great opportunity:
1. Understanding the new User Behaviour
The recession changes consumer behaviour, so instead of only focusing on typical customer segments (age, gender), also include these segments relating to spending habits.
* Those who will aggressively cut spending
* Those who re-evaluate their spending, but still continue to spend
* The wealthy, looking for opportunities
* Those who live in the moment
Look for opportunities to tap into these segments by creating a unique selling point with your product or service. A downturn in the economy is the best opportunity to attract new business as consumers are more open to changes.
2. Introduce innovation
With a turn in the economy, the “noise level” of your industry will drop as businesses look for ways to cut costs, it during this opportunistic period that you should be looking for ways to attract attention by innovating on a core competency. In times when competitors are less likely to make noise, you have an opportunity to monopolize the news for your industry, building awareness.
3. Change Strategies
When the economy is good and people are spending money loosely, this sometimes masks some of the underlying problems a business has. But when a downturn hits, problems begin to surface. It’s a good opportunity to evaluate and rectify these issues immediately, scrapping ideas that are no longer working and turbocharging data driven results. Businesses that don’t address these issues at this stage will most certainly have bigger problems down the road.
From our analysis of the last edition of Kaduna Buy and Sell festival, a lot of customers reduced their spending power, perhaps because of the dilapidating economy. People are afraid to spend money, complaining things are quite expensive while forgetting that prices of everything in the country is going up. One of the reasons we postponed the next edition from April to May is to give a breather in hopes that things in the country will stabilise by then. Hosting a trade fair in this economic downturn may not be a smart move for us and our vendors. We hope that things get better within these 3 months, and if they don’t, we would have acclimatised by then.
You have our best regards in your businesses and endeavours.
Join the Kaduna buy and sell vendors group for more updates : https://chat.whatsapp.com/GeydeztVjPK2vYzHeV5GYD
