Selling in an Economic Downturn
03.03.10
by Steve Marr
The current economic downturn is affecting every business and we all need to make adjustments to connect with today’s changing customer demands. Customers are establishing new priorities and are reducing their overall spending.
It is important to understand these two key factors:
#1 — The psychology of customers is changing.
#2 — What worked during past recessions may not work in today’s hard times.
You may be tempted to go along without changing your business, but King Solomon wrote, “How long will your fools fight the facts?” (Proverbs 1:22 NLT).
The stream of bad economic news is eroding confidence and purchasing power in dramatically different ways. Many businesses now understand that a lot of sales growth was based on customers living beyond their means. Today, customers face a mountain of bills, unemployment, falling income, reduced retirement savings, and more. Businesses need to respond to these new realities.
Customers on Hold
Some customers fall into a “freeze mode” stopping, postponing, decreasing, or substituting purchases. Customers falling into this category are typically lower income or are the more affluent that have become scared or unemployed. Price and need are now the keys to reaching these groups.
Advertise your best price and promote special deals. In addition, consider offering lay-a-way options, which can induce buying. Also, if possible, offer do-it-yourself options. One hardware store promoted do-it-yourself projects as a way of encouraging customers to spend a little and still get the benefits they wanted. Moreover, try offering smaller packages at a lower price point to trigger buying.
Tags: price point, promotions, Sales, specials