5 simple strategies to recession-proof your business
In times of uncertainty, preparation is key. We’ve curated a comprehensive guide filled with practical tips on how to navigate economic challenges and ensure your business remains competitive.
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 persisting for several months or longer. Executives, business owners, and employees lose sleep over recessions because they know what it might lead to: less funding, plummeting sales, decreased profits, and significant layoffs.
But here’s a fact worth remembering: a recession is significantly less scary if you’re prepared for it. While there’s no way to 100% recession-proof your business, you can limit the impact with the right strategy and tactics.
5 tips to recession-proof your online business
1. Re-examine customer expectations
During a recession, it's crucial to understand that customers' preferences will likely shift. They may prioritize affordable product lines over high-end bestsellers or seek small wins like discount codes, free shipping, or simplified checkout. Understanding customer pain points and finding better solutions not only increases loyalty and sales but also ensures financial stability during a recession.
To understand customer needs for your online business, try a behavior analytics platform like Hotjar. When your customers’ thoughts and feelings matter most, Hotjar’s powerful user feedback tools allow you to
Add a feedback widget to your site to gather visitors’ thoughts and opinions
Set up AI-powered surveys asking targeted questions like, "What's holding you back from making a purchase?"
Conduct one-on-one virtual interviews with specific customers or prospects
2. Safeguard your cash flow
During a recession, consumer spending decreases. Most businesses inevitably experience reduced revenue, and obtaining loans becomes more challenging as lenders tighten their belts. In this environment, monitoring cash flow is more crucial than ever. Analyze the timing of money inflow and outflow by doing the following:
3. Focus on data-driven conversions
During a recession, prioritize enhancing your current website experience instead of investing in paid ads. For example, you could analyze your website analytics to identify popular pages and the keywords driving visitors. Then, take action by creating similar pages for more traffic or reworking underperforming ones.
Establish data collection and analysis processes to optimize conversion rates before stagnation hits. This involves gathering and analyzing quantitative data for insights and examining qualitative data for understanding.
Drive round-the-clock digital growth with Hotjar 🔥
Don't let uncertainty get in the way of your online business's growth. Understand your customers' needs and motivations to secure success—even during stressful economic times.
4. Maximize output
As a CEO, business owner, or marketer, chasing after new initiatives and more advertising for promotional purposes is tempting. However, during a slowdown, it's crucial for companies to reevaluate and cut out ineffective purchases and processes. Instead, focus on creating innovative and cost-effective solutions for existing problems.
Even with limited funds, you can still drive word of mouth by engaging more on social media to spark customer delight and build trust. Similarly, rather than investing in a new website, make small changes to your existing site to enhance the customer experience.
For example, Wyldsson, an ecommerce site, used Hotjar’s heatmaps (color-coded visual representations of real users’ website activity and engagement) and session recordings (video renderings of people moving, scrolling, and clicking through their site) to identify issues with their customer login and checkout experiences. Making the necessary tweaks resulted in a 30% increase in sales.
A Hotjar heatmap showing areas of most and least engagement on Wyldsson’s web page
5. Choose effective tools
During a recession, you may need to delay hiring—but there won’t necessarily be less work to do. Avoid overwhelming your existing employees by getting creative. Even with a hiring freeze, you can enhance productivity and efficiency across various areas, from data analysis to marketing, with the right tools.
Research best-in-class software to simplify and automate time-consuming tasks like website engagement or marketing funnels. Choose tools that serve multiple teams in your company and provide added value for customers. Once embedded in your workflow, the right tools can be game-changing, saving valuable time and resources. Marlin, a digital signage company, found that Hotjar Recordings contributed to several goals across various teams, improving the business’s user experience and saving countless hours of research and admin.
Weather any economy and bring value to your customers
Even in a recession, there can be silver linings. It forces us to analyze finances, prioritize essentials, and maximize efficiency. By applying strategies to recession-proof your online business, you'll thrive in any economic conditions and deliver the customer experience your prospects seek and desire.