With Consumers Spending Less, What Is Your Next Step?

Let’s face it, the economy may be getting better, but many people are still suffering from things such as unemployment, foreclosures and everything in between. With all these factors many families are crunching their finances and changing their spending habits. As a business owner it is a good idea to realize how your consumers are spending their money differently, and determine how you can get through these hard times successfully.

Assess your Client’s Unemployment Rate
The national unemployment rate is barely under 10 percent and in October of 2009, it rose to just above 10 percent. If you take a closer look, you will see the unemployment rate for higher paid positions was not as high as lower paid positions. According to the New York Times, people making $150,000 or more had an unemployment rate during the fourth quarter of 2009 of 3.2 percent--while people making $12,500 to $20,000, had an unemployment rate of 19.1 percent.

If you have assessed your clients and potential clients demographics, you will know the income level of your targeted clients. If your client falls in the lower income category, you may want to asses how you will be able to keep them spending when many of them could be unemployed. Implementing a contest or online quiz via a social networking site could help with your brand awareness, and keep your brand in your customers’ minds when they are ready to spend.

Update Your Business Plan
For smaller businesses especially, staying afloat can be hard when consumers aren’t able to spend. If this is the case for your business, it is a good idea to revise your business plan and come up with ways to get some extra cash. Banks are being weary when it comes to business loans, so making sure your business plan is up to par can be extremely beneficial.

According to Marc Kramer, a writer for Forbes.com, the two main sections to focus your business plan on are, “the Executive Summary and the Financial Forecast--they will determine if you get that initial meeting. The rest of the plan will determine how much capital you raise (if any) and for what specific purposes.”

Change up Your Marketing Strategy
Consumers are spending less, but they will spend their money on certain things, "messages that center on family, life simplification, and getting back to basics will appeal," says Eric Janszen, president of iTulip, a finance-advisory firm. Keeping that in mind, see how you can tweak things around and get more people to want to buy your product or service.

Many online marketing tactics are free, which is a plus for your bottom line, and hopefully will bring in the consumers you need. Crunching every penny, personal or business-wise, is something everyone needs to do. Thinking of tactics you can implement with little or no cost to you could produce big results.

Get Creative
No matter what it is your business does, getting creative in all aspects of your business can help. If a bank won’t loan you money, think of other ways you can get some capital. Business cash advances work much like payday advances, and could work for your business.

Talk to your loyal customers that are still spending their hard earned cash at your company. Hearing straight from your customers is an excellent way to see what you are doing well, and what you can improve on. Your customers will also like the fact that you are taking the time to hear their wants and needs, and will help with your brand loyalty.

The bottom line is, times are still rough for many, and as a result many have changed their spending habits and lifestyle. Businesses are no different, and reassessing spending habits and studying up on your customers’ new spending habits can really help you get through this recession successfully.