The Impact of Coronavirus: A Looming Recession and How You Can Protect Your Business
The rampant spread of the Coronavirus has forced the world into lockdown and pushed the global economy to the brink of recession. Companies will close, and jobs will go. People are already being forced to stay home with no clear return date.
The way back to prosperity will be long and hard – especially for small business owners and professional service providers who don’t have the luxury of large cash reserves and big fish clients.
When you have no control over the economy, no certainty over what your income will be over the next 6, 12 or even 18 months or how you’ll pay your overheads – while your desperate rivals are all competing for the same pool of clients – you may feel suffocated and powerless. This fear is widespread; it is valid; and right now, it is growing by the day as the pandemic changes, grows and accelerates, impacting our world on a health and financial scale rarely witnessed.
But it is possible to tilt the scales back in your favor to some degree. You can create some shelter to keep your business dry and safe while the economic storm hammers down.
The important thing is to educate yourself about your situation, taking a forensic look at your business, its costs and ways it can be improved. Once you do, you’ll be able to make fast, informed decisions that will buy you breathing space in the short term and position you for success once the pandemic fades and the market turns for the better. And it will get better… eventually.
But rather than follow the herd in believing the world is ending, this is an opportunity to give your business the tune-up it needs. When economic times are good, a host of mistakes are either not visible or easily ignored. But when things tighten, as they are right now, it’s your chance to reshape your business, making it better than before while guarding against the spectre of recession.
As someone who has successfully built both brick-and-mortar and online businesses, I can see a number of patterns and behaviors emerging over the coming months. There are ways you can insulate your business from the worst of this pandemic and even find some opportunity amidst the panic and chaos.
If you’ve been following me for any period of time, you’ll know I consider strong, relevant, informative content as one of the foundational building blocks of any successful business. Content marketing is the most effective way to get prospective clients to know, like and trust you.
But strong, well-researched, helpful content your audience will find useful and share with their networks – which helps build your reputation – takes time, money and resources. This means many businesses will pull the plug on content entirely (to their lead generation detriment), scale back significantly or put out sub-standard content.
Whatever you do, don’t fall into this trap. You have an opportunity right now to double down on good content. If you find client work is slowing down, it’s a great time to ramp up your content output. In fact, as the standard of content in your industry drops, you’ll shine even brighter if you commit to producing quality.
Increase in Spam
In the weeks and months to come, you will likely notice a spike in the number of messages hitting your inbox.
As the panic over the virus has risen, so too has the desperation of many businesses to make a fast buck and try to stash some money away for the economic winter coming our way. There’s nothing wrong with selling; far from it. But when it’s done in an aggressive, spammy, impersonal way, it actually damages your business.
In their desperation, many business owners and marketers will be looking for quick and easy ways to blast their sales messages out to as many people as possible (maybe using automation or shortcuts). Doing that will not help them. People can smell desperation a mile away. Such marketers will be ignored, deleted or blocked, and their reputation and credibility will be damaged.
Anyone who has been through a recession before knows most businesses will be affected. But today’s recession landscape differs from previous ones, even from the last recession of 2008. We spend more time online than ever before, and we look to Google and social media to help us make many of our decisions.
People and businesses will be much more cautious investing their money and will be doing more research before choosing where to spend it. They will look not just at your company and your products/services but at you. Are you someone they can trust? If your personal brand doesn’t convey professionalism, authority, credibility and trust, they will move on to someone else.
Take the time now to upgrade your online presence. Start with creating a compelling LinkedIn profile as that is often the first place someone looks when considering doing business with someone. If you are not completely proud of how you present yourself on LinkedIn, how will anyone else be impressed or trust that you are someone they can trust when times are harder?
The sad reality of an economic downturn like this is that people will lose their jobs as businesses look to cut costs to survive. A few things will flow from this: Those who have lost their jobs will try to start their own home business because big companies won’t be hiring.
For freelancers and consultants, the competition will be intense. Labor costs will come down, and freelancers and consultants charging excessive rates will be replaced by those who will provide the same service for far less. Many will turn to low-cost overseas labor, regardless of the threat it could have to overall quality and service. Even self-employed people will happily accept a job to provide some level of financial security to their families.
Social selling is so much more than pumping out content, finding leads on LinkedIn, sending connection requests, and then giving them the hard sell. Those who attempt to do social selling this way will be wasting a lot of time and see next to no results.
Social selling is about building relationships with your prospects and establishing trust and authority using social media and other digital marketing tactics. To succeed, it’s crucial you pay attention to your prospects’ needs, goals, problems and desires, meet them where they are at on the buyer’s journey, and position your company or service as the perfect solution.
It takes time, dedication and strategic planning to achieve. But when it’s done right, your lead generation efforts are maximized, and client conversion becomes inevitable.
Marketing companies and agencies will drop like flies, because people and companies will reduce their marketing budgets. They will only invest in the marketing approaches they can tie a specific ROI to, such as lead generation.
When the economy tanks an organization’s focus narrows. It focuses on the activities that not just make money, but deliver the most ‘bang for the buck’. Every expense they look at now needs to fit the equation of low cost equals a high return. After all, why would a business spend $1 if it wasn’t guaranteed a $2 return? We know that isn’t always possible, but that is the lens through which your services will be viewed.
The question for any small business, consultancy, or solo service provider now in survival mode is this: How do you make/save money for your clients? If you can answer that question by demonstrating a strong ROI to your clients, your chances of continuing to work with them will increase exponentially. And if you can increase your value to them, you’ll be worth your weight in gold.
Survival of the Fittest
Where there is money to be made, you will find dishonest, unqualified, inexperienced hustlers who make all the promises in the world, take your money and run. This is true across any industry. There will always be dishonest people who can see an opportunity to benefit themselves to the financial detriment of others.
Check your newsfeeds right now. Do you see smooth-talkers making big claims about how you can earn tons of money with very little effort? Somehow these “gurus” have the secret.
If you’re looking to invest in education and services to help your business move forward, do your due diligence. It only takes a bit of digging on the internet to uncover someone’s credentials and reputation, and I want you to make an informed decision that will give you a good return on your investment.
The consequences of working with someone who can’t deliver on what they promise could be dire for your business. Recently, I received an email from a man asking for my help. He had used the services of a virtual assistant in the Philippines claiming to be a LinkedIn expert. The outcome was his account was “Permanently Restricted.” All those years of building up a network, and it’s gone when he needs it most.
Even worse is the impact on your reputation and the degree of trust people have in you. Trust takes years to build. It can sustain a business in hard times, but it takes only the tiniest spark to see it burn down, taking your business with it. Be extremely careful.
And if you’re someone offering services, I truly mean it when I say it is survival of the fittest. You need to deliver exceptional value and service to your clients, which should eventually lead to referrals of more work for you. And don’t be shy about talking up your strengths and successes as long as you do it in a professional and humble manner. People generally have a good radar, and if you conduct yourself professionally, with honesty, humility and generosity, including in your marketing, people will want to work with you.
Business Protection in a Recession
Times are tough, and they will get tougher. But if you take some pain upfront, you can sandbag your business against the economic waves lapping at your door and even set yourself up for a stronger future.
If there’s one thing that tighter budgets do, they make you look at your business in a way you may never have before. Use this to your advantage: look not just for budget efficiencies, but operational ones too. You might be surprised at what you find, and you will potentially find that over the medium- to long-term, your business will end up stronger than before.
But before that, you have to make some decisions. The following is what I think of as the essential low-hanging fruit that every business needs to grab to protect itself from a recession.
Any non-essential expenses need to go, at least for now. Anything that doesn’t give you a strong ROI needs to be reconsidered seriously.
Your time, and your staff’s time, is one of the most precious commodities you have. Use it wisely. Similarly, assess your tools of production, such as software. Do you really need 5-10+ different technology tools? What can you teach yourself to do, outsource cheaply or go without?
This is a real opportunity to identify skills gaps in your own toolbox and that of your people. Investing in education could lead to another revenue stream for you, greater efficiency, or a saving on labor costs – if, e.g., you do certain tasks in-house instead of outsourcing them. Make an effort to be more self-sufficient.
Look at all the data related to your marketing costs. If it doesn’t clearly generate business, it has to go. Now is not the time to waste money dabbling in every platform, channel and medium because you’re scared of missing out.
If you think lead generation means spamming people’s inboxes with your offer multiple times a day, you’re actually hurting your business. And please don’t fall for all these “magic bullet” automations that promise to find you leads while you sleep. Lead generation is about building relationships, and that takes time. But in the long run, it makes for stronger businesses. And if you’ve been swamped with work up until now, this period is the perfect time to reignite relationships fallen by the wayside. You never know what old contacts have been up to or how you might be able to help them.
Reduce risk in all areas of your business and even in your personal life. Even though the market is down and there may be some great deals to be had, now is not the time to lease a new car or take any unnecessary financial risks.
The economic storm clouds are gathering. Sadly, many businesses will hit the wall through a combination of poor planning, poor decision-making and a stubborn refusal to adapt to the new climate.
But if you are nimble, open-minded, analytical and decisive, you can batten down the hatches until it passes. But more than that, you can be primed for success – especially if you take this as an opportunity to ramp up your lead generation efforts and fit your offer to your market.
Your level of client service and social selling skills will be crucial if you want to keep ahead of your competitors and stay top of mind with current and potential clients.
Yes, price is always a consideration when people are looking to invest/cut back on products and services, but if you enjoy strong relationships with your clients, provide exceptional service and knowledge, and have a great offer, you don’t have to engage in a race to the bottom and cut your pricing to the bone.
The truth is life will change in the foreseeable future – both personally and professionally. And it’s our ability to adapt that decides who survives, then thrives, once the storm passes. And it will pass. Even the darkest, deepest recessions and bear markets eventually turn. And when that happens, the winners will be those who were brave enough to make smart, at times tough, decisions to keep the show on the road.
I don’t want to add fear amidst all the uncertainty already out there – far from it. I simply believe it’s always best to be prepared for uncertainty and to insulate yourself against it the best you can. There is real opportunity, even now. I hope you can see this and take the chance to recalibrate and reposition your business for future success.
Melonie Dodaro is a preeminent authority on social selling on LinkedIn and the author of the #1 bestselling book LinkedIn Unlocked. She is also the CEO of Top Dog Social Media, a company specializing in B2B social selling on LinkedIn. Melonie’s superpower is creating strategies that turn cold connections into clients. To learn more visit TopDogSocialMedia.com.