Why It’s Time to Shift Gears If You Want to Thrive in 2023

The economic forecast for 2023 is not as optimistic as it was in 2022. What does that mean for your local business?

It’s hard to miss the headlines about how the US economy is doing.

While I have my own predictions regarding a recession in 2023, there are two things I know as fact:

1. The U.S. has been in a bear market* for at least June of 2022.
2. When handled correctly, this type of market can be a huge opportunity for local businesses to build sustainable growth.

*A bear market, as opposed to a bull market, happens when there is a sustained decline in investment prices. It is often — but not always — followed by a recession.

For local businesses, the key to thriving in 2023 will be learning how to shift strategies for a different kind of market.

Recession or not, a bear market means that securities have been declining in value for a sustained period. We tend to see higher unemployment and lower consumer confidence, which lead to reduced customer spending.

And as these circumstances can cycle back on each other, it’s no surprise that bear markets can lead to recessions.

What is a local owner to do?

First and foremost, established companies must stop operating like start-ups when it comes to sales and marketing.

I frequently encounter businesses with a “throw it against the wall and see what sticks” marketing mentality.

For many local business owners, marketing tactics lack strategy, discipline, and trackable results.

What does this mean?

• They focus more on tactics than results,
• They don’t require trackable systems around the strategy, and
• They decide to try something because they heard about it from their favorite influencer or read it online, not because it’s the right fit for their business.

This has been okay for the past several years because revenue streams have been plentiful for many businesses.

Note: We know the pandemic years were tough on many, and not just economically. In-person related companies like travel or restaurants were hit particularly hard. And our team has seen the closing of cherished businesses in our own communities. But on the whole, the past decade has been good for most small and mid-size companies.

In a bear market, owners must ensure that every marketing dollar counts.

In a more restricted economy, those revenue streams dry up.

The cash flow isn’t there to hire more people, adopt unproven technologies, or invest in other ways.

So why continue directing time and resources to marketing at all?

Because marketing is how a company attracts and retains customers.

To ensure survival and sustainable growth, local founders must choose how to focus those resources for the greatest results.

In a bear market, growth strategy must be disciplined and strategic, not just reactionary.

A long-term, sustainable marketing strategy requires intentionality to see reliable results.

While reading Andrew Chen’s recent article about why our current market requires a different approach, I found myself getting really fired up.

I’ve seen many people talking about this for investor-led companies, but not enough people talking to local businesses. Marketers talking to local businesses are acting like it’s business as usual when the coming months and years will most likely be anything but.

The need for sustainable marketing strategies in a bear market is unavoidable.

Founders who continue to rely on the same strategies they’ve been using for the past few years will soon see different results — if they haven’t already.

Local businesses need to catch up when it comes to innovation, which is understandable with more limited resources.

But local businesses also tend to lag when it comes to pivoting. And in a bear market, they simply cannot afford this to be the case.

Right now, local founders have three choices:

1. Stay the course and take your chances that what has worked the past few years will continue to work.
2. Cut all marketing spending and risk the continued growth of your company.
3. Play it smart with the resources you have while we wait for this bear market to end, as they all do.

Behind door #3 are three strategies that are proven to sustain your business, even during economic downturns.

Chen references them in his article, but this is how they apply to local businesses:

• Focus on steady, predictable, long-term ROI.
• Base your strategy on trackable data, not on what seems easiest or what you’ve spent the most time on.
• Learn to say “no” or “not yet,” and get selective with your “yes.”

Whenever you have a constriction in cash flow or a cut in marketing spend, you must choose the strategies with the highest chance of making money.

These are the strategies that have a clear line between the marketing ask and the end sale.

Anything that doesn’t fit that criteria belongs on the back burner when times are tight.

With the right strategy, bear markets are where local businesses can build wealth.

The strategies that work in a bear market will continue to provide exponential results in future economic cycles.

Our current economic climate will reveal which companies have staying power and which only seemed to be doing well because times were good.

If you handle this market well, you will see outsized gains in revenue and growth.

I know this because I’ve seen it — not just with my own company but with those of my clients who also started in a bear market.

As we’ve worked through our strategic planning for 2023, I’ve reminded each of them of what got them through the first time and how we can apply those lessons today.

Sustainable marketing principles have always been really sexy to us at Realign Consulting. Recently, they’ve been getting a lot sexier for other marketers as well.

Our credo is that a sustainable business strategy requires prioritizing what matters most.

This means people first.

Systems second.

And innovation third.

Why third? Because the idea that you can just throw caution to the wind and hope that there’s a net rarely works out in the long run. Real innovation is only possible when people feel valued and systems make baseline revenue fairly predictable.

To build sustainability in 2023, what can you rearrange to take care of your people and your community at this moment?

In a 2022/2023 world, it’s no longer acceptable to be indiscriminate with your marketing resources. We have the data-tracking and storytelling tools to help us pin down what’s working and what’s not.

We just have to have the discipline to actually do it.

Next week, I’ll dig into specific strategies to help you thrive during a bear market that will set a sustainable foundation for the future.

In the meantime, remember that this, too, will pass.

With the right focus, you and your business will come out stronger for it.