Businesses require a strong foundation to secure their longevity in the long run. Equipping yourself with the right marketing mindset is crucial to pull your company through the dirt and ugly of running a business.
Econsultancy says entrepreneurs and their constituents require three things to be successful:
Knowledge and skills are acquired and easy to come by. People receive these things during the training and onboarding process. Mindset is more challenging to pin down. Countless challenges plague the course of managing a business, but having a marketing mindset is what helps keep it from spiraling down.
The question is: as an entrepreneur, are you equipped with the right marketing mindset to endure those business slumps? Do you have what it takes to keep your business running in the face of economic downturns?
If not, this article is for you. Recessions happen, and when the unfortunate comes, how will you handle it?
Here we’ll explore what having a marketing mindset really is in the residential home services industry. Moreover, we’ll look at some great examples of recession and how home service contractors can maintain a marketing mindset throughout.
Marketing Mindset Definition
When we read a marketing mindset book or some online resources, they have a boxed definition for marketing mindset. They often describe it as a state of mind focused on building and promoting a business – that is true.
However, these thought leaders restrict its definition to developing marketing strategies and tactics to expand businesses. This includes reaching target audiences, increasing brand awareness, or generating leads or sales. But it is vastly more than that. A marketing mindset also requires flexibility and adapting quickly to changing trends and market conditions.
Before we delve deeper into marketing mindset, it’s essential to define mindset first.
Stanford psychologist, Carol Dweck, defines mindset as a set of beliefs that shape how people make sense of the world. Everything we think, feel, and do in a given situation is influenced by our mindset. It is our mindset that pushes us to achieve something and be successful. Conversely, it is also the backend trigger that controls our behavior when trapped in a dire situation.
There’s no doubt that in business, those dire situations happen more frequently than we want them to. From incurring fewer sales during off seasons to losing to competitors, residential home services are free of problems. In the end, a recession in marketing could occur, permanently crippling businesses or putting them out of commission. Having a marketing strategy in a downturn to adapt or prepare for it is all attributed to a strong marketing mindset.
Dweck argues that there are two types of mindsets: fixed and growth mindsets.
A fixed mindset believes that abilities are fixed traits and cannot be changed. Conversely, growth mindsets argue that talents and abilities are products of persistence and effort. By extension, this dichotomy extends to marketing mindsets. In other words, there are fixed and growth marketing mindsets.
Here are some examples:
Fixed marketing mindset: Either my business will survive the recession or not.
Growth marketing mindset: I can prepare my business for the recession.
Fixed marketing mindset: Recessions limit business profitability.
Growth marketing mindset: I will adapt to increase sales in a recession.
A growth mindset is all about optimism, not toxic positivity. It’s never about convincing yourself that a problem is okay but facing problems knowing you have prepared for them beforehand. So, you face them with hope and a positive attitude.
In many years of working with residential home services, I have helped business owners strategize how to survive during recessions. While each category is different, there is a general framework for maintaining a marketing mindset in economic slumps. Here, we’ll explore how a marketing mindset can help contractors face economic downturns and emerge victorious.
If you’re looking for an expert business strategist to see your business through hard times and credit crunches, I can help. Wizard of Sales® has been the trusted partner of residential home services in their business’s strategic direction. You can count on us to improve company culture by training salespeople and even strategizing for economic downturns. Book a call.
The Latest Economic Recession
Economic recessions are periods of sustained economic downturns characterized by lower consumer spending and business activity levels. They can occur for a variety of reasons, which include:
- Shifts in market demand
- Instability in commodity prices
- Geopolitical unrest impacting broader economic trends
Economic recessions may not be commonplace in North America, still many businesses and individuals struggle to keep up during these difficult times. Maintaining a marketing mindset during economic recessions means being prepared for downturns before they happen. Let’s look at some examples of recessions we have faced in previous years.
The Great Recession
The Great Recession was one of the most severe economic recessions in modern history, impacting businesses and individuals worldwide. It began in 2007 and lasted until 2009, resulting in significant spending and business activity losses.
One of the key drivers of the Great Recession was the collapse of the subprime mortgage market. These are loans offered to less creditworthy individuals or people with poor credit history. As a result, there were many defaults on high-risk residential loans. It ultimately led to a credit crunch in global banking and a significant drop in lending.
Moreover, other experts cite poor government regulation, and risky Wall Street behavior were additional causes behind the Great Recession. It was avoidable, they argue, but the failures nudged the crisis into fruition.
The Great Recession resulted in massive unemployment and financial hardship for many individuals and businesses. In the wake of the crisis, one in five people was laid off, and countless others never recovered. Fresh graduates attempting to enter the job market were halted by it. However, people learn a hard lesson about preparedness if one good thing comes out.
Twelve years later, the world faced another recession, albeit shorter than the previous one (two months vs 18 months). The problem is that this recession is more severe despite its two-month reign – the Covid recession.
The Covid recession, also known as The Great Lockdown, is an economic crisis caused by the global outbreak of COVID-19. Lockdowns and early precautions that were taken to subdue the spread of the virus caused the global economy to go into crisis. Rising unemployment, decreased spending, and reduced market activity greatly impacted businesses and individuals during this time.
February 2020 marked the first sign of the recession when stock markets plummeted 20 to 30 percent. There was a disproportionately high rate of unemployment as well as difficulty for brick-and-mortar stores to cope with the lockdown. Naturally, the pandemic facilitated the transition of most businesses online to cope with the recession. It was eventually bound to happen, but the pandemic accelerated the shift to online.
Here’s the rub: only those with strong marketing mindsets picked up the shift and saved their businesses from demise.
Despite those grave examples, recessions are generally uncommon. In the last 30 years, we have only experienced recession eight percent of the time. That’s not to say, however, that other downturns don’t happen. And developing marketing strategies during these periods of unrest can be challenging.
Some businesses may choose to cut back on marketing efforts altogether during a recession. Others will use marketing tactics like discounts and promotions to maintain sales for the sake of revenue. Ultimately, the key to surviving an economic recession is maintaining a strong marketing mindset. One that is focused on long-term growth rather than short-term results.
Whether through flexibility or innovation, one thing is clear. Those who maintain a strong marketing mindset are better equipped to weather the storm of recessions and stay ahead of competitors.
Home Services Industry During a Recession
In today’s turbulent economic environment, residential home service businesses faces a number of challenges. Declining replacement sales can be overwhelming, especially for companies that have yet to learn from the past two recessions. Given the increase in prices, affording premium services is a luxury only some households enjoy. This places a significant emphasis on repairs and maintenance revenue and profitability.
At the heart of marketing, mindset is the ability to think strategically about your business. This covers anticipating potential obstacles and developing effective strategies for overcoming them. Focusing on long-term marketing efforts will continue to pay off even during economic volatility.
Maintaining a Marketing Mindset for Home Services Business
Below are ways to maintain and prepare a marketing mindset for home services before a recession even hits.
Start With a Good Plan
Contractors don’t experience a crisis and naturally develop the mindset or knowledge to overcome the predicament. A solid marketing mindset begins with a good marketing plan. In the same way that mindsets shape how you manage your role, plans influence your actions during a crisis.
Dire circumstances can break a person’s morale. Contractors should pre-emptively anticipate the early signs of economic downturns and set their expectations accordingly. The key is accepting that some business touchpoints will take a hit — that’s where the plan comes in.
Your plan instructs you on what operational habits to limit and what touchpoints to strengthen. For example, marketing channels that rely primarily on paid ads are scaled back during recessions. Meanwhile, marketing efforts that drive more organic traffic, like blogging and social media marketing, should be prioritized.
This is only true for some businesses. An expert business strategist can help point your company in the right direction.
Study Your Company’s Intricacies
Maintaining a marketing mindset is all about pre-emptive preparation. Businesses that fail need a clearer understanding of their company’s intricacies and what channels they can capitalize on during crises. Furthermore, evaluate which touchpoints are most important to your business and identify areas vulnerable to downturns.
With this information in hand, you can develop a plan to help weather potential challenges while continuing to grow and thrive. For example, you may shift marketing priorities or scale back on certain operational practices. That entirely depends on your business and its individual intricacies.
One suggestion is to strengthen the value proposition for your club memberships. Even in crises, club members are your captured audience that brings a steady stream of monthly revenue to your business. Another tip is to improve the value of your services by offering prospects a perfectly fair competitive advantage. That means giving customers a high-value, high-demand offer that no competitor provides.
Take some time to study where you can improve your marketing and ensure you remain on top amidst an economic downturn.
Cutting the Marketing Budget Is Not the Best Solution
Your marketing mindset should pull your business through for the long haul, not keep you afloat in the short term. When you slash your marketing budget, you protect your short-term runway while maintaining minimal revenue. While that keeps your business operational, your business emerges economically weaker once the downturn subsides.
Building a solid brand in the face of recession is one of the best ways to adapt. Why? Because businesses will be conservative in their marketing spending, you take the spotlight. Even when the public’s purchasing power is low, the businesses that thrive are those with strong brand recognition and awareness.
Also, think about it.
Cutting one’s marketing budget is often a gut reaction by most residential home service contractors. When these inexperienced contractors skimp on their marketing and advertising, you’ll see better ROI in your marketing investments.
Again, study your business’s intricacies and look where you can get most of the returns. These will most likely be the most profitable channels come economic crises.
Examine the Motivations and Behavior of Your Target Customers
Understanding customers’ motivations and behavior is essential for maintaining a marketing mindset during times of uncertainty. Understanding what drives your target customers enables you to tailor your marketing strategies to better resonate with them. This creates trust and builds deeper relationships that help sustain your business during tough times.
Repeating what I said earlier, a marketing mindset is best used pre-emptively. Studying what tickles your market during the crisis leaves you no room for adjustment. It’s best to know their buying behavior, preferences and unique needs early on so you can act accordingly.
Take the time to know your customers deeper and understand what they need most from your business.
Keep Track of Everything
One key aspect of maintaining a marketing mindset is staying on top of market trends and customer needs. Although not commonplace, customers’ buying behavior, preferences and needs may change over time. It’s best to keep track of these developments to tailor your marketing strategies better.
It also involves regularly analyzing data and performance metrics to identify any needed changes or shifts. This makes you proactive in adapting new marketing efforts instead of simply responding to changes as they happen. Be on the lookout for marketing strategies or tools that can better engage your target audience.
By doing so, you can stay 600 feet above the competition during tough times. Moreover, you also build stronger relationships with your customers that sustain your business long-term.
Find and Remove Bottlenecks
Concerning the previous point, keeping track of every business touchpoint allows you to streamline processes and systems better.
An effective marketing mindset nips potential problems before they even happen. Any ineffective or obsolete systems you overlook are called blind spots. These leave you vulnerable to incoming dangers that jeopardize your business. That’s why you have to be on the lookout.
Blindspots eventually evolve into bottlenecks. At this point, blindspots have grown in intensity and are wreaking havoc on your revenue or systems. Left unchecked, they become breakpoints resulting in irreparable damage, like lost customers.
Analyzing your business allows you to stay above blindspots, bottlenecks and breakpoints.
Focus and Prioritize Your Existing Customers
Having a marketing mindset balances out seeking new buyers and maintaining existing or repeat customers. Let me explain.
People who chose your solutions and remained loyal through the years found a unique attribute they never saw in others. More often than not, this is your empathetic approach to customer convenience. Your goal is to ensure customers maintain their loyalty by continuously engaging them. Don’t let other businesses proselyte or take away the fruits of your labor.
You want to seek new buyers, but don’t focus too much on them. Keep repeat customers are the forefront of your marketing strategy. The goal is to build customer loyalty that never fades away.
Refine Your Recession Marketing Strategy
A good marketing mindset is accepting that you can’t force customers to buy. All you can do is nudge them along your company’s buying journey. Desperate times can change people and their spending habits, which is okay. Even if you prepared a safety net for your marketing approaches during a recession, they might still need to check out.
The key here is continuously refining your marketing strategy to see what works and doesn’t. Here are four steps to keep in mind:
- Track your efforts or progress
- Tweak your campaigns and see what works
- Pivot your strategy as necessarily
- Repeat the process
Business owners who have their marketing mindset in check realize that learning never stops. Whether that’s before, during or after an economic downturn, you must be prepared to adapt when necessary.
In the end, the best way to master the ins and outs of your business is with external guidance. Like the Johari window, outsourced experts can point out weaknesses that internal people don’t discern. Expert business strategists like Wizard of Sales® can support this aspect. If you want to stay on top of recessions and ahead of your competitive landscape, I can help.
Book a call to learn more.