When a recession strikes, it can be challenging for service businesses to stay afloat. For small businesses or large corporations there can be hurdles to overcome due to the economic downturn.
Yet, it can be even more difficult to determine how to operate when the coronavirus calls for unprecedented measures such as social distancing and self-isolation.
Now that people cannot leave their homes, how do service businesses find ways to pivot, attract customers, and keep their business stable during this time.
An economic slowdown means people can’t afford to spend money the way they usually do which causes them to delay purchasing decisions. This can result in a loss of customers, fewer sales, and even smaller sales.
This can dramatically affect your business, and even make you question if your business will be able to keep the doors open during this period.
The good news is there are a number of ways to recession-proof your business so you can get it through difficult economic times.
Here are some strategies to ensure you’re setting your service business up for success during this recession:
1. Offer services via virtual, video, or phone calls
Coronavirus has caused a recession unlike any other in history. Precautionary measures like social distancing have resulted in people not being able to leave their homes or spend their money on typical lifestyle expenses.
Instead, people are trying to find activities to keep themselves busy, and other ways to purchase services without in-person contact. As your service business finds ways to pivot during this time, a solution to this is bringing your business online.
Many types of service businesses are getting creative when it comes to thinking of ways to offer value to customers. Many of these new strategies involve offering services online or remotely. Fortunately, with today’s technological advancements there are a number of tools you can use to facilitate this.
Example #1: MakerKids facilitates STEM programs such as robotics, minecraft or coding to give kids the skills of the future. They are offering fun and educational virtual classes to help keep kids engaged while they're at home.
Example #2: The Child and Family Therapy Centre of Denver is offering therapy sessions for children and families virtually to help them overcome challenges even during this time.
It may take time for your team and customers to adapt to operating your business online, however, in times like coronavirus where commerce comes to a halt, this is one way to ensure customers can still be served, giving employees job security, and ensuring your company is still generating revenue.
2. Temporarily change your business model
It may be comfortable and familiar to offer services that have been successful in the past, and while this isn’t a bad thing...getting out of your comfort zone and broadening your line of services can open the door to new sales opportunities.
Changing your business model, even if just temporarily could be the key to helping your business survive during the recession.
Depending on the type of services your business offers, think horizontally to see if there is a complimentary service you could offer which may be helpful to customers during this time instead.
Example #1: Anahana Wellness is known for offering private, in-person meditation, yoga, pilates, nutrition, and other wellness services. For now, they’ve shifted to offering these services online, using Zoom. Another added benefit - they can now service customers around the globe instead of just a select group of cities where they offered in-home sessions.
Example #2: Wink and Wave temporarily shifted their business model from offering mobile beauty services to selling products and offering free shipping to their loyal customer group.
If you use an online booking platform, you can use it to test out new services risk-free to see if any of your new offerings resonate with your customers.
3. Automate your business to minimize salary costs
If you automate parts of your service business, you won’t need as many staff to help with certain operational tasks. If you set your business up for automation early on, you can run with a smaller team from day one. This means you won’t feel the impact of a downturn as much as companies with little automation or a large operational team.
One example of automation is to equip your customers with the right tools to help them interact with your business and make purchases online by themselves.
An online job scheduling and sales platform like MarketBox can allow your customers to book appointments anytime, anywhere. The platform will allow customers to easily schedule and pay for an appointment on their own, minimizing the number of office staff needed to help customers.
This is far easier for your customers than being restricted by your business hours to call or email your business to secure an appointment.
An online sales tool that links to your website can do all of this, without you even having to think about it. Using technology such as a sales platform or appointment scheduling tool will streamline your business operations, increase cost savings, and recession-proof your business.
4. Keep in contact with leads and customers
Even if people aren’t currently booking appointments, it’s crucial to stay in touch with them throughout their customer journey. By staying in touch, this doesn’t mean to spam them with sales pitches and irrelevant content.
Instead, use a content strategy to provide valuable information and offers to your potential customers or current customers. This could be content that indirectly relates to your services and will help them see you as a thought leader in your industry.
If they see you as a trusted resource, they will continue to interact with your business and will likely become a paying customer down the line and even refer other customers to you.
Email marketing, leveraging a blog and posting on social media are some great ways to stay in touch with your customer base.
Here are a couple of examples of content strategy that adds value to customers:
Example #2: Dr. Chris Klachan is a chiropractor who shares videos on Instagram that show stretches and exercises on how to maintain good posture while working from home.
5. Have a game plan for when the economy recovers
As far as recession-proofing your business goes, it’s far better to be a business owner that is proactive than reactive. The economy will recover eventually once the coronavirus challenge is resolved, its important to ensure that you have a game plan for when it happens.
If you’ve followed the advice about keeping in touch with your leads and customers, when the market recovers, they will already have your business on their mind.
You may have turned off marketing campaigns or decreased ad spend budgets, but it’s important to create a strategy for how you’re going to re-enter the market when the time is right. What will be your sales tactics, when people have purchasing power again?
6. Entice people with offers to use when the time is right
Recessions often prevent people from making purchases which means you need to find ways to get people excited about spending again as the economy moves out of the recession.
If you incentivize leads or existing customers with special limited-time deals, they will be tempted to purchase your services. Some businesses are even selling gift certificates now to be used at a future time when business returns to normal. Since many customers may not be able to go out and use your services right now due to coronavirus, this gives them something they can look forward to.
This is mutually beneficial because the customer can get a deal on a service they can use at a later date, while your business is able to secure cash flow upfront.
Here are a few ways you can provide offers to potential customers to entice them to make purchases even during a recession:
- Gift certificates
- Bulk Discounts
- Exclusive offers
Example #1: Pearl Morissette Estate Winery, located in the Niagara Region is selling wines to the public which are usually reserved for sale to restaurants only (Metis Rouge and Metis Blanc). The winery is also offering gift cards to its restaurant for when it reopens.
Example #2: Bloomfield Beauty Co. a medical aesthetics and beauty services company located in Prince Edward County is selling gift cards that customers can use for future service appointments.
7. Save money for a rainy day
Service businesses should save money over time so that they are prepared with cash on hand for a downturn or slowdown of business. Business by its very nature can be uncertain, that’s why it’s important to consider how you can weather a storm if one comes.
The coronavirus is an example of an unexpected issue that has caused many challenges for service businesses. The best way to handle difficulties that can arise from a similar issue is by setting money aside just in case and not touching it unless you absolutely need it.
This rainy day fund can cover your staff’s payroll, critical expenses, and other foreseeable costs. Mitigate risk by regularly contributing to this fund, you’ll be glad you did.
Take the right steps to recession-proof your service business
The best way to recession-proof your business during the coronavirus is to prepare ahead of time so that when the next one comes around, you won’t feel the impact as much as other businesses. We hope you’ve found these tips helpful to get your service business through the current challenging landscape as well as any issues that may occur in the future.