4 Opportunities for Business Growth in a Slowing Economy

When the economy slows, business owners and managers can start to worry. How will they maintain revenue or continue to grow if consumers reduce spending? The woes of the recession may spur business leaders to take actions that mirror consumer behaviors. They are looking for ways to cut spending, including delaying major projects and freezing hiring.

An economic downturn affects some businesses more than others. Yet, should a recession occur, most leaders and their teams will need to find ways to overcome its challenges. Despite conventional wisdom, a recession does not mean that all hope for growth is lost. A slowing economic climate can create business opportunities if leaders know how to seize them. Here are four ways to do it.

1. Boost marketing efforts with your existing customer base

An economic downturn doesn't mean consumers won't spend at all. However, people may look for different ways to prioritize household budget items. Other buyers won't change their spending habits much since they have enough disposable income to survive a recession. Even though some customers may change their buying behaviors, they generally don't buy products and services they don't know about.

In growing economies, businesses are finding that it takes more effort and advertising money to sell to new customers than to current customers. The same principle is just as true during a recession, if not more so. Redirecting your marketing efforts to existing customers during off-peak times can help your business maintain revenue.

Implementing growth marketing strategies that focus on customer retention is more likely to produce tangible results. Research indicates that the success rate of selling to current customers is between 60% and 70%, while that figure drops between 5% and 20% for new customers. Marketing that targets existing customers can result in growth of new products and future referrals.

2. Create online communities

Let's say you're in a room with a stranger and someone you already know and trust. You are more likely to engage with the person you know. Interacting with a familiar face is more comfortable, whether because of an established rapport or a sense of security. Starting a conversation with a stranger is taking risks. You don't know what you're getting into and the risk of the meeting going wrong is higher.

Pass this scenario to consumers looking for solutions to their problems. They'll either stick to the brands they know or ask someone they trust to make recommendations. Companies that spend time building trust and brand identity are harnessing the power of social reference groups. The psychology behind the affiliation also plays a role.

In times of uncertainty, businesses can take advantage