The difference between the success and failure of your business often comes down to the quality of the decisions you make as the owner, and what you decide not to do is just as important as what you choose to do. Here are five things you must not do if your business is to survive this recession.
- Raise prices.
Yes, the recession is pinching you but it’s pinching your customers as well. Raising the price of your product or service now is likely to scare away potential customers and drive a wedge between you and your current customers, leading them to your competitors. And the last thing you want is to lose customers during a recession.
- Slash prices.
If you shouldn’t raise prices, you should probably slash them, right? No. Discounts are not going to help your business at this time. It’s too risky to depend on a price slash to make sales. Rather, focus on marketing your unique selling proposition, improving quality and providing excellent customer service. You will win more customers over and keep them by being an outstanding business that offers great service than by lowering your prices.
- Take a loan.
One sign that Nigeria is in a recession is the decreasing revenues all around. Many businesses can barely keep the lights on talk less of breaking even. So unless it’s the only way to keep your business alive (in which case you should take a long, hard look at the profitability of your business model), taking a loan now is a very dangerous thing. Think about it, how will you service the loan when your revenue is not up to scratch? If you’re spending all your revenue on paying a debt, the purpose of the loan is defeated.
- Stop or reduce marketing.
We agree, it’s important that you do all you can to cut costs, but you shouldn’t make compromises when it comes to marketing your business. How else will the world know that you exist? Instead of stopping your marketing efforts, find low-cost ways to publicise your business. This is the time to explore Facebook and Instagram ads, flier campaigns in populated areas and e-mail campaigns. Your visibility is not negotiable.
- Neglect your current customers.
You need new customers, no doubt, but it’ll cost you more to get them than to retain the ones you have now. This is the time to deliver the best service ever to your current customers, strengthen their connection with your brand and turn them into your evangelists. By doing that, you will be opening doors to referrals which will bring you new customers at no extra cost. And don’t forget the power a dissatisfied customer has to bring down a business.
Local insights, practical advice and resources to help Nigerian entrepreneurs build and maintain profitable businesses. Learn how to keep your business alive during this recession.