Periods of recession can be very alarming for everyone, but for social media agencies, can it also do more damage as expected?
Is there a way for social media companies to survive such crisis situations, especially when businesses would expectedly cut back on spending?
Recessions can be very debilitating as it causes widespread and sustained economic contractions marked by a drop in the gross domestic product (GDP). It also curbs credit access, reduces payment collections, and, worse, drives other businesses to go bankrupt. Is this bad news for social media agencies, then?
Make no mistake, businesses – whether large or small – would see a drop in sales and profits during recession, and only the strongest will survive.
Those that continue to strive would resort to cutting costs which may include layoffs and capital spending, marketing, and research.
Smaller businesses are more likely to feel the brunt of a recession period due to their scale, which makes them more vulnerable and subject to greater risks of failure when it gets badly hit.
Can a recession be avoided?
Whether we like it or not, a recession is endemic to the global economy and is a natural part of the economic cycle, but while it cannot be avoided, businesses can prepare for it to cushion its impacts and minimize losses.
For instance, the US economy is a complex structure comprising numerous industries and growth is measured by GDP.
In a favorable situation, the overall economy expands – which means businesses are making more money, hiring more people, and continuing to grow. In turn, more working people earn income, and some are granted higher incomes, thus, enabling them to purchase more products to expand the economy.
However, at some point, the economy reaches its peak and will start going down. When the decline continues its downtrend due to underlying factors with marked severity for an extended period of time, the economy then goes through a recession.
It’s impossible to predict when a recession will happen or what causes it, but there are tell-tale symptoms to watch out for as it will likely cause a potentially negative impact on businesses. Once businesses understand these symptoms, they can better prepare for an economic retraction. Surprisingly, this is where social media agencies come in.
Here’s how social media agencies can identify the symptoms and be able to develop strategies and solutions to survive and thrive during a recession.
Always check the health of a business
In the months leading up to a recession, there are significant indicators of reduced consumer and capital spending, and businesses start to feel the effects of decreasing revenues.
Depending on how well-prepared businesses are or armed with contingencies, the first thing they resort to doing is to cut back on spending, such as reducing the workforce, finding ways to lower the cost of production, and holding back on marketing activities.
For instance, businesses may resort to taking advantage of free editing software for video marketing realignments rather than outsourcing video editing services from editing companies.
Organizations, especially social media agencies or video editing companies, need to determine how far their business can survive a crisis situation by asking the following questions;
Ø How long can a business operate self-sufficiently?
Ø Are there redundant positions or processes in the business operations?
Ø Does the organization have a business continuity plan?
Ø How effective are the marketing campaigns?
It is only when people are aware of their business’ state of health that they can make them determine their chances in a crisis situation.
Grow and strengthen your customer network
The stronger a business is, the lower the risk of it being greatly impacted by a recession. Since customers are the lifeblood of a business, it is important that an organization also focus on retaining and enhancing its customer base.
Customer service is making sure that they are provided what they want at a time when they need it most. This becomes a great opportunity to grow a client database, especially when consumers maintain professional relationships with those who provide them with more value and importance.
Effective strategies in addressing this are for a business to initiate a customer loyalty or incentive program, adapt services or products that suit the consumers’ current needs, and carefully diversify the business to minimize losses.
Develop innovative and adaptive practices
Developing innovative practices for the business to adapt to market conditions can greatly help survive the crisis and remain competitive in the market.
With technology and eCommerce, there are better opportunities today forsocial media agencies to establish online business channels and reach out to more clients.
Because let’s face it, businesses need to be more visible online and stay relevant to their customers, as well as sending out their brand message that they are stil out there to serve the market.
Establish responsive strategic networks
Developing a strategic network of businesses that could support each other to provide consumers with products and services is a great way to weather an economic downturn.
It does not have to be a business takeover or merger, rather, it is aimed at providing diversified services to an existing customer base, ranging from complementary services, discounts, or product bundlings, just to name a few.
Such alliances or network partnerships can offer new opportunities for businesses involved, as well as ensure maintaining stronger consumer loyalty and patronage.
Choose, strengthen and sustain key marketing campaigns
Assess and review your marketing strategies, then develop ideas to increase sales and make the most out of your marketing dollars.
The key is to communicate brand awareness by promoting the competitive advantage as a business, whether it’s a strategic partnership, new product collaborations, lower prices, etc. This is best conveyed using videos as a strategy for a far-reaching message delivery system.
Make sure that the distinctive selling proposition stands out from the competition, and it can only be done by taking advantage of all marketing channels that can deliver the brand message.
Remember, staying relevant and useful in the market is the key to surviving a crisis.
Call to action: Is your business ready to take on a recession? Call us; we can help you stay relevant
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