It started with creeping prices in grocery stores, but now inflation is everywhere we look. The latest consumer price index confirmed what many of us suspected: inflation may be slowing, but it will not get anywhere for a while. For small businesses in America, inflation is another hurdle they need to overcome.
When I talk to small business owners, they all share the same feeling of insecurity about rising inflation. Yet their resilience shines when they ask how to deal with this economic pressure head-on. Although business owners cannot control all the rapidly rising costs, they can use marketing as a tool to help protect their business from inflation.
Take advantage of technology to understand your customers.
The pandemic is driving the rapid adoption of e-commerce and people are buying online more than ever. In 2021, more than 2.14 billion consumers bought a product or service online – about 2 times more than in previous years. This opens up a treasure trove of customer information.
Don’t be fooled by the age-old story that data collection and other marketing technologies are inaccessible to small businesses. Today, they are relatively simple and inexpensive to implement and significantly level the playing field when competing with major brands.
As inflation influences consumer behavior, companies can set indicators that can assess what leads to positive interaction, sales or returning customers. Small business owners have some of the best instincts and can turn this 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 purchase is significantly more expensive. You love this local place, but now you feel a little controversial because you didn’t expect prices to go up. This will be a common experience as inflation persists throughout the year. However, the great news for small businesses in America is that 70 percent of consumers plan to continue to support small businesses, despite record high inflation.
Consumers want to see the success of their favorite businesses, and business owners can ensure that this happens by communicating early and often about the impact of external factors on their business. Ninety percent of consumers say that transparency and adherence to values are important factors in deciding which businesses to support, and small businesses are in a unique position to achieve this.
While social media remains a great option for communicating with customers, switching to direct channels such as email and SMS is turning into better engagements and clearer communication. Both parties have agreed to this communication flow, and business owners can ensure that their message reaches their committed, loyal customer base.
Sorry, sorry, sorry.
Inflation is a direct threat to the end result of small business and puts pressure on business owners to determine where they can save costs. Made tactically, marketing can be reduced during financial strife – you don’t have to face a decision between making a salary or investing in marketing.
What I like about marketing is how agile it can be. At a time like this, the business should not overdo it with marketing tactics and tools. Small businesses can look at the data, listen to their customers and find the channels they need and the right budget (if any) they need to communicate effectively. Marketing must never break the bank to be effective.
It can feel like a scary time for small business owners right now. Like many of the challenges they have faced in the last two years, inflation is beyond their control and forces them to make difficult decisions. To every small business facing this reality, I recommend putting your customer at the center of the decision-making process. Find out what is most important to them and then use your marketing tools to strive to give it to them without apology. In the end, you will find yourself with a more loyal audience, and probably a thriving business.