The U.S. economy shrank 32.9 percent in the second quarter due to the pandemic, according to Commerce Department's latest data. But Americans are actually spending more while earning less: In May, consumer spending increased 8.2 percent while personal income decreased 4.2 percent.
These trends add urgency to grow sales until the economy recovers. That's easier said than done considering most small businesses (SMBs) have unreliable cash flow. According to an April 2020 Harvard survey, the median business has over $10,000 in monthly expenses but less than one month of cash on hand.
Business owners and company managers must be relentless in growing cash flow. Doing so lessens enterprise risk and gives business leaders better rest at night. Here are a few ideas that won't break the bank.
Improve content that reaches target buyers.
The only people who can rescue any fragile business are buyers. Satisfied customers. Shoppers who have willing cash or plastic in hand. So ask, "What kind of individual would immediately purchase my goods? You've got to tailor business content based on such a profile because it'll lead to relevant traffic and conversions. If you can't explain a compelling value proposition, then there's no reason for a cautious consumer to pull out a wallet.
Additionally, remote work is putting the spotlight on ecommerce and social media. According to Adobe Analytics, ecommerce sales jumped 76 percent in June. You probably can't increase cash flow unless you're online.
Sell the benefits. Tell prospects how much money or time they'll save.
Use chatbots to support customers.
Chatbots are a competitive advantage because they interact with customers 24/7. They're also a growing trend for B2B and B2C. Bots improve sales by keeping buyers and fans engaged with a business. In B2B settings, bots can guide site visitors through the sales funnel. For example, they can guide prospects from a blog post, to a programmatic conversation, and to a video call with a salesperson. Bots also reduce costs by automating certain aspects of customer relations, possibly cutting down payroll spending.
Natasha Takahashi, CMO and co-founder of School of Bots, a San Diego, California-based training firm for marketers, agencies and companies, says there's a shift in consumer behavior where more customers are using messenger apps to buy a product, schedule a meeting, and other revenue-facing activities. Takahashi expects the use of bots to grow among enterprises of all sizes.
That said, strive to keep a customer for life. People want to feel like businesses care about them. And they want to interact with your business as conveniently as possible. Using messaging apps to communicate with customers in a personalized and intimate way allows a brand to build a relationship with audiences.
These one-on-one relationships increase the lifetime value of each customer and lead to more referrals. With so many competitors around, providing a unique, customer-focused experience makes it easier to do business with you. This is critical to business growth in 2020 and beyond.
Takahashi adds that bots give companies a reputation of being responsive and attuned to customers' concerns. She says the key is to customize the tech's functions based on a firm's attributes, objectives and its customers' expectations. For example, a bot can ask a site visitor a few qualifying questions, then give a product recommendation personalized for the user. And send the user to checkout. If customer service is more important, then bots should be designed to answer after-purchase questions.
Experiment with social strategies.
It's difficult to produce a viral video, tweet or article. But the purpose of increasing sales at this point is not necessarily popularity. It's to make your venture survive a historic recession by reaching the right buyers. Depending on the type of business, even 1,000 or 3,000 impressions from the appropriate crowd can lead to enough sales for your startup to survive more months.
Experiment on YouTube, Instagram and other big platforms. If you're not good at making videos, then outsource it. Hire actors on sites like Fiverr and Upwork: All you need is a small budget for someone to review a product, discuss its features and/or help prospects find your business. (And be vigilant. Perhaps your rival is ruining your brand by hiring actors to publish negative reviews.)
Explore if it makes sense to set up a referral system with influencers. They can potentially drive the right kind of traffic (high-converting traffic) to your business. An influencer may be an industry expert or local celebrity. Or he can be a school principal. You may have to keep tweaking a referral program to discover what motivates people to give you customers. Additionally, why not give influencers product samples? Your inventory will rot anyway if no one buys it.
The pandemic is changing the business landscape. Be more determined than the hardships you face. "A business automatically grows itself," said no one ever.