Yes, we are in the middle of tough financial times, but not all businesses are suffering. Here are two ways to bring in customers and sales during the recession.
Studies have shown that during an economic crisis, two types of businesses not only survive, but thrive. These two business areas actually see a dramatic increase in sales: peanut butter and lipstick.
Comfort Food and Staples
There are two main reasons why Skippy and Jif see a rise in sales.
- Everyone needs to eat, and peanut butter is cheap. Food is an essential for life, and when money is tight people turn to economical budget-stretching options.
- Slapped on crackers or in a good old PB and J peanut butter is a fast and convenient foodstuff that has a strong place in family life as a go-to option when both time and money are tight.
Are You a Peanut Butter Business?
If you are providing essential services at a budget price, the chances are that your business is somewhat insured against economic turmoil.
(Note, this is still dependant on good marketing, customer service, branding, cashflow management and all other good business essentials!)
How Can You Apply the Peanut Butter Business Lesson?
If this type of product isn’t within your core business plan, think about how you could expand into a new offering, or even repackage an existing product or service into a more affordable, must-have package.
Can you offer low monthly payments in return for a service or product that adds tangible value with minimal input or effort from clients?
Think cheap, fast and easy. If this goes against the grain for your business, that’s ok. There’s another option…
The Feel Good Factor
During the depression and again in the stock market crash in the 80′s brands such as L’Oreal and Max Factor saw a strange dramatic rise in lipstick sales. This shocked analysts (I’m going to go out on a limb and say most of these were men) who couldn’t work out why consumers would spend their tiny budgets on such a non-essential item. Market research revealed that amid the doom and gloom while women were struggling to make ends meet a relatively small purchase of $6 wasn’t going to break the bank, and was going to give them something that made them feel good about themselves, creating a more positive attitude and providing some small relief from a tough situation.
Known as the “lipstick effect” this is another tactic to apply to secure more sales.
Are You a Lipstick Business?
Unfortunately, this example is no longer quite so rosy as it has been in days gone by. Our lives are now flooded with non-essential items, and our concept of a much higher standard of living means that a lippy just ain’t gonna cut it for most consumers.
The key here is how you market your products and interact with your customers. Make sure all of your copy is enticing, and has a strong focus on make a lifestyle statement.
Brands such as Benefit do a great job of this, making each product sound fun and frivolous while maintaining a focus on value and quality. Fabric softeners and air fresheners are another area where advertisers do this well. Families are shown as being surrounded by fresh, invigorating uplifting scents and soft, comforting fabrics … both little things that make a positive impact on lifestyle.
How Can You Apply the Lipstick Lesson?
The key here is to make empathy a big part of your brand personality. Be a sympathetic friend to your consumer. Social Media and blogs make this easy.
Find your customers’ pain points and let them know that you understand their woes and can provide some kind of relief from their doldrums. Find the feel good factor of your business, whether it is giving them more time, less hassle, a better value or simply a small treat to lift their spirits. Who excells at this? Gambling sites. As disposable income has decreased the profits of Bingo sites has increased. Yes, I’ve picked another women-centric example here, but that is not to say that this lesson is just for businesses with a female target market.
Everyone wants to feel good. Everyone wants to find a way to bring a little sunshine into their life. How can you help your customers to fill that need?
