Our surrounding circumstances definitely affect our decisions and therefore our actions. Consumer buying habits are no exception. With the economy going through some tough times, many people have transitioned from a mindset of spending freely on a whim to one of careful frugality.
For the small business owner, this change in the consumer mindset has a direct impact on your marketing and business strategies. It is now more important than ever to pay close attention to your customer’s needs. Many of the issues that your customers are going to face in this recession are the same: reduced income, increased unemployment, increased expenses, more debt and solutions that don’t meet their immediate needs.
Keeping in mind that consumer demand is comprised of income level, personal preference, and purchase price, let’s take a look at what a small business owner can do for continued business growth and profits.
Other than hiring our customers, which is an unrealistic solution to the problem, as a small business owner, there’s not a whole lot we can do about the diminishing income levels of our customers.
With regard to pricing, there are a few things that small business owners can do to influence consumer demand. However, downward pricing can create a risk to the bottom line profitability of your business, so the best way to influence consumer demand is through preference.
People may have less to spend and become more frugal, but this doesn’t necessarily mean your customers will gravitate to choosing the product or service with the cheapest price tag. In fact, value becomes more important during a recession because people are generally looking to get the most bang for their buck as their spending habits become more economical.
In business as in life, challenges arise when immediate needs are not satisfied and solutions are not easily attainable. If you can satisfy your customers’ immediate needs, solve their personal problems, cater to their preferences and deliver a product that will stand the test of time . . . you’re sure to gain a life long customer regardless of the current economic situation.
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