YCombinator (YC), a prominent Silicon Valley startup incubator, recently sent out an email to the founders of its portfolio companies. They announced that the founders should prepare their companies for a recession in the coming months. Many executives have begun to implement proactive defensive measures to mitigate the potential impact of the recession on their business. As a result, tech companies have begun laying off employees, cutting marketing spending, and reducing their investments in development activities. However, while this may seem like a good idea, defensive action feeds fear and sends the company into a downward spiral. So, how to increase sales in a crisis?
In my design practice, we have found that businesses can thrive in any economic environment. The main thing is to know which levers to pull and when to pull them.
Based on my experience advising and mentoring several YC startups, I have developed some highly effective and effortless design tips to help companies stay on the offensive and grow their business during challenging times. Here are three tips to help you drive sales and grow your business in a recession.
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Use the knowledge of experienced professionals
When the economy starts to slow down, it sets off a chain reaction of events in the startup world. The first thing that usually dries up is access to finance.
Startups must adapt to the new environment and do more with less. They must lower their burn rate and expand their runway beyond their original projections.
In this situation, startups need to cut back on their experiments and focus on a few activities that will bring in new customers or resell old ones.
Under these conditions, startups cannot afford to work with inexperienced professionals who are still learning their craft. Instead, they need battle-tested, seasoned professionals who can get the results they want quickly.
In the design world, there are two types of experts who can help bring a project to life:
- Specialists with functional experience; and
- Professionals with industry experience.
Functional experts are generalists who are good at what they do. They understand how to use many of the design tools and can work within the parameters of the specification. However, these experts usually fail to produce innovative work. Because they don’t understand the intangible nuances of an industry.
Specialists with specific industry experience have accumulated extensive knowledge what works in a particular industry. As a result, they can quickly add value to a project by cutting down on the trial and error phase and immediately get to work on what works.
Experts with specific industry experience rely on data-driven empirical evidence to help them make decisions. For example, if a fintech startup wants to develop a new Buy Now, Pay Later (BNPL) app, it will achieve success faster by working with designers who have worked on multiple BNPL apps.
Use customized demos to build credibility
During a recession, it’s critical to find creative ways to shorten the sales cycle and build customer confidence. Custom demos can help startups increase sales and reduce the time it takes to close leads.
Custom demos show your potential customers exactly how your products will perform in their specific use case. I’m not suggesting that every startup should create a solution that suits each of their potential customers, as that would be expensive and time consuming.
I suggest that you, as a startup, use highly effective, low-effort tools and methods that will help you make a sale faster. For example, if your company offers a SaaS solution for B2B customers, you can simulate an interactive demo in Figma instead of giving the potential customer a real-time introduction to your software.
Figma allows you to brand and tailor your software to your client’s specific use case. The client can then click buttons and see how the software will work in real time. Custom demos show potential customers that you’ve taken the time to think about their concerns and put in the effort to create a solution that works for them.
When customers know that you have paid special attention to their problems, it increases their confidence in your abilities, increases sales and reduces buyers’ remorse.
Improve your conversion 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 right now. This means that 97% of potential customers are not ready to buy right away. In addition, they will need a lot of persuasion before making a purchase.
The cheapest way to improve your chances of convincing a potential customer to buy your product or service is to improve your copy.
Improve your conversion rate optimizing your web copy can be a quick and easy way for a company to increase sales during a recession.
In my experience, I have found that hiring copywriters who specialize in a particular niche can make a huge difference.
For example, the landing page or web copy where new customers first learn about your product should be clear, informative, educational, and entertaining. In addition, your web copy should answer any questions and potential objections a potential client might have.
You can poll your past and current clients to see what they think. Also, learn the words they associate with your product. Once you have collected this data, your copywriter should use the collected information to create compelling copy.
In conclusion, stimulating sales during a recession has more to do with an offensive, action-oriented approach. While your competitors are playing on the defensive and reacting to market conditions, you must strategically use every tool in your arsenal to ensure that can you survive and thrive until everything returns to normal.