YCombinator (YC), the famous silicon valley startup incubator, recently sent an email to the founders of their portfolio companies. They announced that founders should prepare their companies for a recession in the coming months. Many executives have started implementing preemptive defensive measures to ease the potential impact of a recession on their businesses. As a result, tech companies have begun laying off workers, cutting marketing expenditures, and reducing their investments in growth activities. Yet, while this might seem like a good idea, defensive actions feed the fear and put the company in a downward spiral. So, how do you drive sales in a recession?
In my design practice, we’ve found that businesses can thrive in any economic environment. The key is to know which levers to pull and when to pull them.
Based on my experience advising and mentoring several YC startups, I’ve developed some high-impact, low-effort design tips to help companies stay on the offensive and grow their businesses in challenging times. Here are three tips to help you drive sales and grow your business in a recession.
Leverage the Knowledge of Experienced Professionals
When the economy starts slowing down, it causes a chain reaction of events in the startup world. The first thing that usually dries up is access to funding.
Startups have to adapt to a new environment and do more with less. They must slow their burn rate and extend their runway beyond their initial projections.
In this situation, startups need to scale down their experimentation and focus on a handful of actions that will attract new customers or upsell old ones.
Under these conditions, startups cannot afford to work with inexperienced professionals who are still learning their craft. Instead, they need battle-tested, highly experienced professionals who can quickly get their desired results.
In the design world, there are two kinds of experts who can help bring a project to life:
- Experts with functional expertise; and
- Experts with industry expertise.
Experts with functional expertise are generalists who are good at doing the work. They understand how to use many design tools and can work within the parameters of the design brief. However, these experts usually fail to produce groundbreaking work. Because they do not understand the intangible nuances of a particular industry.
Experts with specific industry experience have accumulated a vast knowledge of what works in a particular industry. As a result, they can quickly add value to a project by reducing the trial and error phase and immediately start implementing what works.
Experts with specific industry experience rely on data-driven empirical evidence to help them make decisions. For example, if a fintech startup is looking to design a new Buy Now, Pay Later app (BNPL), the startup will succeed faster by working with designers who have worked on several BNPL apps.
Use Customized Demos to Inspire Confidence
Finding creative ways to shorten the sales cycle and reinforce buyer confidence is essential during a recession. Customized demos can help startups achieve a higher bump in sales and reduce the time required to close potential clients.
Custom demos show your prospects exactly how your products will work for their specific use case. I’m not suggesting that every startup needs to create a solution to fit each of their potential customers, as that would be expensive and time-consuming.
My suggestion is that as a startup, you need to use high-impact, low-effort tools and techniques to help you get the sale faster. For example, if your company offers a SaaS solution to B2B customers, you can mock up a clickable demo in Figma instead of walking your prospect through your software in real-time.
Figma allows you to brand and tailor your software to your customer’s specific use case. The customer can then click the buttons and see how the software will work in real-time. Customized demos show prospects that you’ve taken the time to think through their problems and have put in the effort to create a solution that will work for them.
When customers know that you have specifically addressed their concerns, it increases their confidence in your abilities, boosts sales, and reduces buyer’s remorse.
Improve Conversions by Changing the Copy
The late sales legend, Chet Holmes, created the buyer’s pyramid. This helps sales and marketing teams visualize the available market for a given product or service.
In his book, The Ultimate Sales Machine, Chet states that only 3% of potential customers are ready to buy now. That means that 97% of potential customers are not prepared to buy immediately. Plus, they will require a lot of convincing before making a purchase.
The cheapest way to improve your chances of convincing a potential customer to buy your product or service is by improving the copy.
Improving your conversion rate by optimizing your web copy can be a quick and easy way for a company to boost sales during a recession.
In my practice, I’ve found that hiring copywriters who specialize in a particular niche can make a tremendous difference.
For example, the landing page or web copy where new customers first learn about your product must be clear, informative, educational, and entertaining. In addition, your web copy must address any questions and potential objections your prospect might have.
You can survey your past and current clients to learn what they think. Additionally, learn the words they associate with your product. Once you’ve collected this data, your copywriter should use the information gathered to create compelling copy.
In conclusion, driving sales during a recession is more about taking an offensive, action-oriented approach. While your competition is playing defense and reacting to market conditions, you need to be strategic in leveraging every tool in your arsenal to ensure that you can survive and thrive until things return to normal.
