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5 ways to recession-proof your business in 2023

It’s hard to avoid all the water cooler talk about a looming recession. 

If you spend any time on social media—today’s virtual water cooler—a quick scroll through your feed will have you anxiously gripping your computer mouse and googling ways to recession-proof your business.

Ecommerce

Last updated

23 Dec 2022

Let’s be clear: we’re not predicting a recession—they’re so complex that even the US government defers to the National Bureau of Economic Research (NBER) for that. 

But it doesn’t hurt to prepare for one, just in case. 

This article gives you five strategies to help you recession-proof your online business. You’ll learn how to maintain an outstanding customer experience (CX) and improve conversions even in a downturn.

Keep your cool with Hotjar 🔥

Use Hotjar’s product experience insight tools to improve your user experience and create customer delight—even in stressful economic times.

5 powerful tips to recession-proof your online business 

Talk of a recession has everyone buzzing—including the C-suite. A recent McKinsey survey found that 81% of CEOs believe a recession is looming. 

What does that mean exactly? 

A recession is a widespread, consequential economic downturn that persists for months or longer. 

Executives, business owners, and employees alike worry about recessions because they know they can result in less funding, plummeting sales, decreased profits, and significant layoffs.

But here’s the thing: a recession is much less scary if you’re prepared for it. While there’s no way to 100% recession-proof your business, there are ways to limit the impact a potential recession can have. 

Let’s take a look at five strategies to help you stay afloat—even in tough economic climates:

1. Re-examine customer needs

During a recession, it’s more important than ever to double down on improving CX. Everyone—especially shoppers on your site—needs less stress and more delight when times are tough.

Remember: customers' wants and needs change if the economy turns sour. They could show more interest in affordable product lines, which then ice out your high-end bestsellers. Or, customers could crave small wins, like a discount code, free shipping, or even a less-stress, simplified checkout process.

The best way to find out what customers need is to ask them. Hotjar’s Ask tools work wonders here. Put a Feedback widget on any website page to get insights about what your users are thinking. Or, for more detailed insights, launch Surveys to ask them questions like, “Is there anything preventing you from purchasing right now?”

💡Pro tip: if you haven’t launched surveys before, you may not know what kind of questions to ask your users or customers to gain useful, actionable insights. With Hotjar, you can start with a customizable template—or you can build one from scratch but choose what to ask customers from a drag-and-drop question bank.

Hotjar makes survey creation easy with a question bank of drag-and-drop options.

Hussle, an online company that sells gym passes, surveyed over 1,000 customers who churned—immediately after they canceled their subscriptions. The results showed that some shoppers didn’t want a multi-gym pass, Hussle’s main offer, because of its price or because they decided to purchase a membership directly from a gym. Based on this feedback, the company created a less expensive, single-gym offer to serve customers (and retain them). 

By discovering customers’ pain points and better accommodating their needs, you’ll see more sales and increase loyalty. Plus, your cash flow will thank you if a recession rolls around, which brings us to our next point.

2. Keep a close eye on cash flow

Consumers save more and spend less in a recession, meaning businesses might see less revenue on products or services. At the same time, banks and other lenders typically tighten their belts, too, making it harder to get a loan to cover operating expenses in a crunch. 

So, how can an online business recession-proof its funding and spending? The key is monitoring cash flow—the timing of when money comes in and out of your business. Analyze cash inflow and outflow now—and make adjustments as necessary—so that you’re in good shape in a potential economic crisis. 

Andy Strote, agency founder and author of the book, How to Start a Successful Creative Agency, asks, “Does your cash flow vary by season? Do an analysis of previous years to detect money patterns, so you're not surprised when it happens again. If you know you need a reserve for slow summers, start building it now.”

Three ways to recession-proof your business’ cash flow:

Create a cash flow forecast

Turn worry into action by taking the time to create a cash flow forecast for the quarter or the year. List out fixed expenses and income, and estimate variable expenses and income.

If it looks like you’ll see a deficit in a given month, troubleshoot to see how you can make preparations now—by cutting back or selling more—to try to shift course.

Evaluate spending and cut costs

Now’s the time to cut any unnecessary spending. For example, online retailers can add more photos (or videos) to product listings to help customers make more informed decisions and reduce money lost to returns.

On the other hand, a software-as-a-service (SaaS) company might look into reducing overhead by going 100% remote. 

Ramp up revenue 

Look at your data to identify your most profitable income streams or marketing initiatives. Then, set the wheels in motion to replicate that success.

For example, if influencers drive a steady stream of traffic from Instagram to your ecommerce beauty store, reach out to create new partnerships.

3. Use data to optimize conversions

In a recession, your company may not want to spend on paid ads to drive more traffic to your site. Instead, focus on what you can do to improve your current website experience for users and customers. 

“Dig into your website analytics,” Andy suggests. “Which pages are the most popular and what keywords lead visitors to those pages? Two possible actions: create similar pages to draw even more traffic or re-work pages that aren't getting the traffic you expected.”

Put data collection and analysis processes in place to optimize your website’s conversion rate before a recession kicks into gear. This means looking closely at quantitative data, the numbers that tell you what’s happening, and the qualitative data, the words and descriptions that tell you why.

💡Pro tip: Hotjar’s Observe tools—Heatmaps and Recordings—pair well with Google Analytics (GA) to improve conversions on your website.

Try this three-step process to find issues on your site that may affect sales:

  1. Start with GA to get essential CRO metrics like bounce rate and returning user conversions. Then, get curious. For example, if your online clothing store's bounce rate is up, ask yourself why. 

  2. To find answers, head to Hotjar Heatmaps next. This behavior analytics tool gives you click, scroll, and move heatmaps to visualize what parts of your site get the most activity. Scroll maps might show you that many visitors to your store are scrolling halfway down the home page, then exiting. Once again, ask why. Maybe customers don’t understand your product value fast enough and you need to move important info up the page.

  3. Finally, turn to Recordings, which lets you see how real, anonymized users interact with your site. Watch for trends. Are shoppers exiting because of a frustrating email opt-in pop-up, or because a video mid-page is slow to load? 

By continually asking why, you’ll dig deeper into the product experience (PX). Any issues you fix will improve the customer experience and conversion rates—so you’ll have more repeat customers and cash inflow should a recession strike.

Scroll maps show you how far users scroll down the page. 

4. Do more with less

As a CEO, business owner, or marketer, it’s easy to get caught up in ‘shiny object syndrome’—adding new initiatives and features, and buying new equipment. 

A recession lets companies reevaluate, cutting out ineffective purchases and processes and creating innovative and cost-effective solutions for existing problems

Your company might not have the funds for a pricey marketing campaign—but you could engage more on social media to drive word of mouth. (Bonus: these positive interactions spark customer delight and boost customer loyalty.) 

Likewise, your company might not have the cash for a new website during an economic downturn, but you can make small changes to your existing site to improve PX and CX. For example, Wyldsson, a plant-based ecommerce site, used Hotjar Heatmaps and Recordings to locate issues with their customer login and checkout experiences. Once they made the necessary tweaks, they saw a 30% increase in sales.

Here’s the bottom line: keeping a customer-centric mentality is the best way to guide your decisions about what’s necessary in tough economic times. Will a new purchase or ad campaign ultimately ease the customer journey and lead to customer delight? If not, get the most out of the resources you already have.

5. Select time-saving tools and automation

You might need to hold off on hiring during a recession, but there’s still just as much work to be done. You don’t want to add strain and stress by upping the workload of your existing employees, so it’s time to get creative. 

Even in a hiring freeze, you can boost productivity and efficiency across the board—from data analysis to marketing—with the right tools.

There are many new tools to streamline estimating, invoicing, and bookkeeping that will save you time and money. Take an hour to explore options that fit your business. Spend less time on your admin, more time on building your business.

Andy Strote

You can find tools to help automate or simplify nearly anything: from website engagement to marketing funnels. Finding software that offers the exact features to meet your needs can be game-changing, saving you valuable time and resources. When preparing for a recession, choose tools that work well for multiple teams in your company—and help you create added value and delight for your customers.

Marlin, a digital signage company, turned to Hotjar Recordings to save time and improve the user experience (UX)—and quickly found that Hotjar was a multi-purpose platform that had cross-functional benefits in their organization and helped them make impactful changes for their customers and business alike.

Hotjar Recordings lets you monitor real users’ clicks and scrolls to see what works on your site, and what improvements you can make for your visitors.

We chose to make the time to learn Hotjar, no matter what, because we saw the value in what it could bring us. I couldn't have imagined, at the time, how much value it would bring us after being a customer for over a year. What it has expanded to, over 18 months later, is a tool we use for not only UX, but for support, marketing initiatives, surveys, customer interviews, product decisions, presentations to our sales team, and communication to our entire company on how people use our product.

Stephen Ippolito
Product Manager at Marlin

Bring value to your customers in any economic climate 

No one wants a recession. But even if one comes along, the news is not all bad: even a recession can have a few silver linings. Recessions force us to analyze our cash flow and financial situation, leading to smarter spending moving forward—and they make us think about what’s truly essential for both business and customers, helping maximize efficiency

By applying our strategies to recession-proof your online business, you’ll weather any economic conditions and still deliver a delightful customer experience.

Keep your cool with Hotjar 🔥

Use Hotjar’s product experience insight tools to improve your user experience and create customer delight—even in stressful economic times.

FAQs about how to recession-proof your business