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 be slowing down but it’s not going anywhere for a while. For America’s small businesses, inflation is another obstacle they must overcome.
When I talk with small business owners, they all share the same feeling of uncertainty about rising inflation. And yet, their resiliency shines through when they ask how to tackle these economic pressures head-on. While business owners can’t control all the rapidly rising costs, they can use their marketing as a tool to help inflation-proof their business.
The pandemic spurred the rapid adoption of e-commerce, and people are buying online more than ever. In 2021, over 2.14 billion consumers bought a product or service online – about a 2X increase from past years. This opens up a treasure of information about customers.
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 they significantly level the playing field when competing against big brands.
As inflation impacts consumer behavior, businesses can set up indicators that can evaluate what is leading to a positive interaction, a sale, or a returning customer. Small business owners have some of the best instincts and they can turn that into a superpower by using data to better understand their customers.
Picture this: you show up to your favorite neighborhood restaurant and when you get the bill your usual go-to is significantly more expensive. You love this local spot but now you’re leaving feeling a little conflicted because you weren’t expecting the price hike. This is going to be a common experience as inflation lingers throughout the year. However, the great news for America’s small businesses is that 70 percent of consumers plan to continue supporting small businesses regardless of record-high inflation.
Consumers want to see their favorite businesses succeed and business owners can ensure this happens by communicating early and often about the impact of external factors on their business. Ninety percent of consumers say transparency and adhering to values are important factors in deciding what businesses to support and small businesses are uniquely positioned to deliver on this.
While social media remains a great option to communicate with customers, shifting to direct channels such as email and SMS translates into better engagements and clearer communication. Both parties have agreed to this communication flow and business owners can ensure their message is getting to their engaged, loyal customer base.
Inflation is a direct threat to small businesses’ bottom line and is putting pressure on business owners to identify where they can save costs. Done tactfully, marketing can be cut back on in times of financial strife– you shouldn’t face a decision between making payroll or investing in marketing.
What I love about marketing is how nimble it can be. At a time like this, businesses don’t need to overdo it on marketing tactics and tools. Small businesses can look at the data, listen to their customers and find the necessary channels and appropriate budget (if at all) they need to communicate effectively. Marketing should never break the bank in order to be effective.
It can feel like a scary time for small business owners right now. Like so many of the challenges they have faced over the last two years, inflation isn’t within their control, and it is forcing them to make difficult decisions. To every small business facing this reality, I recommend putting your customer at the center of your decision-making process. Figure out what is most important to them, and then use your marketing tools to unapologetically strive to give it to them. You’ll end up with a more loyal audience, and likely a thriving business as well.