The Guarantee
October 14

How to Grow Market Share During a Recession

Whether you believe a recession is coming or is already here, it’s clear the economy is heading down the path toward more uncharted territory. For CEOs, it’s one more challenge to round out several very hard years.

The Dow Jones Industrial Average may have sunk into a bear market of prolonged price declines in September for the first time since March 2020, but most economists agree we have not quite reached recession territory yet. And experts such as Dr. Nouriel Roubini — the “Dr. Doom” economist known for predicting the 2008 recession — argue the U.S. Federal Reserve may not be able to curb inflation without doubling interest rates, and subsequently sending economic and job growth into a tailspin.

A recent survey by the National Association of Business Economics found that 72 percent of economists expect a recession by the middle of 2023. If we enter into a recession, it’ll take roughly 15 months to recover fully, though the speed of recovery will vary by sector.

If a 15-month recovery sounds daunting, consider this: history has repeatedly shown that companies aggressively investing in marketing bounce back far faster.

Growth-minded organizations turn lemons into lemonade by turning downturns into opportunities: grabbing market share, boosting employee morale and ultimately, coming out stronger. During the 2008 recession, RedRover grew by 495 percent not through grand, radical changes, but through consistent, decisive action. In his book “Great By Choice,” Jim Collins calls this philosophy the “20-Mile March”:

Another person who starts the walk at the same time as you may log 40 miles the first day when the weather is nice, none the day it starts raining, and so on. By the time they reach Maine, weak and exhausted, you will already be there. It’s the discipline to maintain a steady pace in both good and bad times that ensures your growth is sustainable and repeatable.

Now is the time to engineer your own victories by maintaining a staunch commitment to high performance. The journey of 3,000 miles to your company’s ideal growth starts with these five simple steps.

Maintain a strong, harmonious brand.

During a recession, it’s important to maintain high visibility in the market to keep your brand top of mind for customers. Your brand-building efforts are what ensure your loyal customers stay loyal amid a time of disrupted company-consumer relationships.

Position your business for success during and after this downturn by reemphasizing your value proposition and adhering closely to your core brand standards. Don’t be tempted by abandoning a brand that’s working well or forgetting your current audience in favor of a new target — just walk the next 20 miles by creating a more unified brand experience that reminds customers at all touchpoints the clear value of your offering.

Uncover unrealized opportunities with market research.

Market research is a strategic imperative in driving measurable incremental profit, especially during a downturn. Keeping a close eye on your customers and competitors can allow you to discover where there is opportunity to steal market share at a reduced cost as others decrease their advertising costs.

Start with low-cost, high-reward modern market research techniques, such as short interviews, surveys and social listening, to understand your core customers’ new buying behavior, brand loyalty and perception of your competitors.

During the 2008 recession, Netflix’s market research uncovered the opportunity to turn poor circumstances into an opportunity for innovation. With an increased marketing budget, Netflix was able to increase its stock value by more than 150 percent by using customer feedback to deliver a product that perfectly met their needs, collapsing long-time competitor Blockbuster in the process.

Divest from underperforming products and services.

Resist the urge to fundamentally change your portfolio, and instead streamline it by reallocating resources early from your underperforming products and services to your core offerings. Eliminating excessive complexity in your product lines now may prevent you from becoming stuck with slow-moving inventory or expendable services should global demand decline later.

Costco is known for its ability to build market share in tough times, due in no small part to the simplicity of its merchandising strategy. While an average supermarket may sell 45,000 to 140,000 different SKUs , Costco carries only 4,000 SKUs per warehouse, limiting items in each line to fast-selling models and focusing intently on the quality of each piece of merchandise. As a result, Costco completed fiscal 2008 amid the global recession with record sales of $71 billion, an increase of 18 percent over 2007.

Develop a consistent pricing strategy 

Some companies will resort to quick fixes such as drastic price reductions at the beginning of a downturn, but doing so can make it nearly impossible to return to regular prices when the dust settles.

Give your clients and customers a consistent expectation on the prices of your core goods and services while simultaneously planning alternative offerings for hesitant buyers. Amid the 2008 recession, email marketing and automation company Mailchimp began offering a free product with reduced tools and features to help small and medium-sized businesses. This pivot resulted in soaring revenue as the company’s innovation and advances of email marketing easily converted the free users to paid ones.

History teaches us not only what not to do, but also what businesses should be doing. Now is the time to go on the offensive to ensure your company can weather any storms ahead. Leading successfully through change requires being open to risk and courageously taking the next right step — or walking the next 20 miles.

We are stronger together. RedRover is committed to finding ways for businesses to successfully fight through economic instability. Knowing the right next step to take can be difficult, and we are ready to help.

Lori Turner-Wilson is founder and CEO of RedRover Sales & Marketing Strategy. A fast-growing agency of seasoned professionals, RedRover is the only Memphis agency to integrate sales training with marketing strategic planning and execution. RedRover has a uniquely intense focus on achieving measurable results for its clientele, as the only Memphis area agency to offer its clients a results guarantee. The agency’s diverse client roster represents nearly every industry vertical in greater Memphis.

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