It all started with soaring grocery prices, but now inflation is everywhere we look. The last Consumer price index confirmed what many of us suspected: inflation may be slowing, but it’s not going anywhere for a while. For small businesses in the United States, inflation is another hurdle they must overcome.
When I speak with small business owners, they all share the same feeling of uncertainty about rising inflation. And yet, their resilience shines through when they ask how to tackle these economic pressures head-on. While business owners can’t control all rapidly rising costs, they can use their marketing as a tool to help their business resist inflation.
Take advantage of technology to understand your customers.
The pandemic has spurred the rapid adoption of e-commerce, and people are shopping online more than ever. In 2021, more than 2.14 billion consumers bought a product or service online – an increase of about 2 times compared to previous years. This unlocks a treasure trove of customer information.
Don’t be fooled by the age-old narrative that data collection and other marketing technologies are beyond the reach of small businesses. Today, they are relatively simple and inexpensive to implement, and they considerably level the playing field against the big brands.
As inflation impacts consumer behavior, companies can implement metrics that can gauge what leads to a positive interaction, sale, or customer return. Small business owners have some of the best instincts and they can turn it into a superpower by using data to better understand their customers.
Communicate early and authentically.
Imagine this: you show up at your favorite neighborhood restaurant and when you get the bill, your usual date is much more expensive. You love this local spot but now you’re leaving feeling a bit conflicted because you didn’t expect the price hike. This is going to be a common experience as inflation persists throughout the year. However, the good news for American small businesses is that 70 percent of consumers plan to continue supporting small businesses despite record inflation.
Consumers want to see their favorite businesses succeed, and business owners can ensure that happens by communicating early and often about the impact of external factors on their business. ninety percent of consumers say that transparency and respect for values are important factors in deciding which businesses to support and that small businesses are particularly well placed to achieve this.
While social media is still a great option for communicating with customers, switching to direct channels like email and text translates to better engagements and clearer communication. Both parties have agreed to this communication flow and business owners can ensure that their message reaches their engaged and loyal customer base.
Simplify, simplify, simplify.
Inflation is a direct threat to small business bottom lines and puts pressure on business owners to identify where they can cut costs. Done with tact, marketing can be reduced in times of financial hardship – you shouldn’t have to make a decision between making payroll or investing in marketing.
What I love about marketing is how nimble it can be. In times like these, companies don’t need to overdo it on marketing tactics and tools. Small businesses can look at data, listen to their customers, and find the necessary channels and appropriate budget (if any) they need to communicate effectively. Marketing must never break the bank to be effective.
It might seem like a scary time for small business owners right now. Like so many challenges they have faced over the past two years, inflation is beyond their control and is forcing them to make tough decisions. To all small businesses facing this reality, I recommend putting your customer at the center of your decision-making process. Figure out what’s most important to them, then use your marketing tools to shamelessly strive to give it to them. You’ll end up with a more loyal following and probably a thriving business as well.