It started with creeping grocery store prices, but now inflation is everywhere we look. The latest consumer price index confirmed what many of us suspected: inflation may slow but it’s not going anywhere for a while. For American small businesses, inflation is another hurdle they need to overcome.
When I talk to small business owners, they all share the same feeling of uncertainty about rising inflation. Yet their resilience shines through when they ask how to deal with these economic pressures head-on. While entrepreneurs can’t control all the rapidly rising costs, they can use their marketing as a tool to help their business inflation-proof.
Take advantage of technology to understand your customers.
The pandemic has spurred rapid adoption of e-commerce and more people are shopping online 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 opens up a treasure trove of customer information.
Don’t be fooled by the age-old narrative that data collection and other marketing technologies are out of reach for small businesses. Today they are relatively simple and inexpensive to implement and greatly level the playing field when competing with the big brands.
As inflation affects consumer behavior, businesses can set indicators that can gauge what is leading to a positive interaction, sale, or returning customer. Small business owners have some of the best instincts and 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 your bill your usual going is a lot more expensive. You love this local place but now you are leaving feeling a bit conflicted because you did not expect the price hike. This will be a common experience as inflation persists throughout the year. However, the great news for US small businesses is that 70% of consumers expect to continue supporting small businesses regardless of record inflation.
Consumers want to see the success of their favorite businesses, and entrepreneurs can ensure this happens by communicating promptly and often the impact of external factors on their business. 90% of consumers say transparency and adherence to values are important factors in deciding which companies to support, and small businesses are uniquely positioned to make this happen.
While social media remains a great option for communicating with customers, switching to direct channels like email and SMS results in better engagement and clearer communication. Both sides have accepted this flow of communication, and business owners can make sure their message reaches their loyal and engaged customer base.
Simplify, simplify, simplify.
Inflation is a direct threat to small business profits and is putting pressure on entrepreneurs to identify where they can save costs. Tactfully done, marketing can be cut down in times of financial hardship – you shouldn’t have to make the decision between taking paychecks or investing in marketing.
What I love about marketing is how agile it can be. At a time like this, businesses don’t have to go overboard with marketing tactics and tools. Small businesses can look at the data, listen to their customers, and find the necessary channels and the appropriate (if at all) budget they need to communicate effectively. Marketing should never break the bank to be effective.
It may seem like a scary time for small business owners right now. Like many of the challenges they have faced over the past couple of years, inflation is not under their control and is forcing them to make tough decisions. For any small business facing this reality, I recommend putting the customer at the center of their decision-making process. Find out what’s most important to them and then use your marketing tools to push yourself without apologizing for giving it to them. You’ll end up with a more loyal audience and likely a thriving business as well.