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10 Tips for Surviving The Economic Downturn

Business | Apr 22, 2009

The immediate challenge for smaller web design companies is how to attract new business and keep old clients in a downturn economy.

Customers are falling off of maintenance contracts and smaller businesses may not be looking to start a website right away.

Enterprise level clients are becoming more price-conscious. What can we do to make sure our collective heads stay above water in this tough climate?

Here are 10 tips to survive the economic downturn.

 

1. Contact Your Clients

Some businesses are actually afraid to contact their clients in a downturn because they don’t want to be the next casualty on their cost-cutting lists.

If someone is going to jump the boat, they’re going to do it anyway and a phone call from you may actually stop them from leaving rather than encouraging them. Call your past clients up, ask how their businesses are doing and ask them if you can help them out with anything that they may be considering on the web front.

Reinforce that your business is stable and you’ll be there for them.

 

2. Reinforce Your Value

When your potential clients sit down and plug in the math to justify an in-house designer versus an outsourced designer, the outsourced one will win every time.

No employment premiums, no benefits and no major ongoing costs once the project is done. If they are relying on in-house staff in other roles to maintain the website, chances are good that updates aren’t being done on time if at all.

Your services don’t cost your customers money, they save them money in the long run.

 

3. Look at Your Pricing

If you are noticing a lot of clients dropping off your roster and not a significant amount of new business, reevaluate your pricing plans and packages. Are they clear? Do they fall in line with what other web design companies are charging in your area? A quick market survey of other businesses in your area will tell you what you need to know.

While you should never compete on price, you should check once in a while just to make sure that your pricing isn’t way out of line with the competition.

Don’t make your pricing the lowest on the block either. You don’t want the clients that are looking for the cheapest game out there. Somewhere in the middle is where you want to be in order to attract clients and still make money.

 

4. Stay Profitable

It is just as important to make sure that you are making money as it is to ensure that your services are priced in line with the market. This rate calculator is an excellent gauge of how much you should personally be making based on your expenses.

If you aren’t there yet, or don’t think you will be there at your current rates, it’s time to reevaluate.

 

5. Choose the Right Add-On Services

We can all agree that add-ons are a great moneymaker regardless of economic times.

Make sure that you add services that you know you can provide; for example, you don’t want to turn yourself into a web hosting service if you only have very basic knowledge of web hosting.

Client pressure can often push us into business decisions like this that we just aren’t ready for. Outsource anything that you aren’t 100% comfortable with.

This is the time to consider adding social media to your roster. You can read more about it in our article here.

 

6. Don’t Use the Recession in Your Marketing

Not only will your message be dated when there is an upswing, this kind of marketing just reinforces the “don’t buy anything” reflex that businesses have during economic downturns.

People who want web design services base their buying decision on a combination of reputation, service, and price. Throwing extra concerns in just confuses the message.

 

7. Go after Larger Companies

Smaller businesses that aren’t financially viable to start with are the first casualties in a downturn.

You have to retool your model to go after, and keep, larger customers. Designing a site for a mid-sized company is the same as doing a site for a small business, with only some minor exceptions.

Upper management requires metrics to show the performance of the site, an easy enough thing to do since most of you are already set up with web analytics programs. Include the fact that you have reporting tools in your marketing message and larger companies will jump on board.

Keep in mind that larger companies will require more of your time in the design process than smaller companies and quote accordingly. Ask the company to appoint a project manager to deal with your company during site creation and maintenance so that their message isn’t diluted by various stakeholders.  This way you spend less time defending project decisions and more time designing.

 

8. Form Strategic Alliances

Competition between web design businesses is usually friendly.

Call up a bunch of web design companies in your area and see if you can help each other out. You may have Flash skills that another company can hire you for. They may have more SEO experience than you do and they may be able to handle your SEO requests.

Just make sure that you bring something to the table so that the references aren’t all one-way.

 

9. Reduce Your Overhead

Make a list of the stuff that you currently pay for that isn’t 100% necessary for your business.

Ongoing costs like magazine subscriptions should be the first on the chopping block. After them, focus on items that save you money and help the environment, like going with a printer cartridge recycling service instead of buying new cartridges.

 

10. Focus on Staff

Reducing staff should be a measure that you only take if you think your business is in serious trouble.

While layoffs may be the order of the day for large businesses, smaller web design businesses should be focused on reassuring their staff and contractors that there will be continuing work for them. Talk to them and see if they want to work different hours, take classes to upgrade their skills or anything else.

While you probably can’t offer huge raises right now, flexible hours and free courses are great incentives for your staff that will keep them happy and working hard for you.

If you are the only “staff” at your business, don’t forget to take some time off yourself. A lot of web designers are in “panic mode” right now, trying to get as much work as they can. When you take on too much, your efforts are diluted and the quality of your work suffers.

 

Summary

There are a million small things that you can do to save money and stay viable in an economic downturn.

The most important thing that you can do is use this opportunity to develop good business habits, like paying attention to customer retention and keeping your expenses lean.

The things that you can do to help yourself and others out during a recession are usually the things that you should be doing in business all along – it’s just easy to forget about them when times are good.


Written exclusively for WDD by Angela West.

What other tips can you suggest to help cope with the tougher economy? How’s the economic situation affected your work?

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  • http://dimagkidahi.wordpress.com Gaurav

    Thanks for such wonderful tips.
    Great share

  • http://freelancercrowd.com/blogs.html Crowd

    The pricing corrections are perhaps the most unpleasant part :/

  • http://www.thisismyurl.com Christopher Ross

    and always remember, even in a recession your product can sell … you might just have to try a little harder.

    • http://www.askjeremyjones.com Jeremy

      great point…hard work pays off

  • http://graphicleftovers.com Daniel Errante

    I think a great opportunity comes with the combination of #1 and #5. If you are consistently adding new products to your company’s array, such as white labeling hosting, analytics, or email marketing, you can sell these services to your past clients who didn’t have the option of adding these services to their website.

    You can also keep in front of your clients by sending out a newsletter letting them know of big changes, product additions or updates, and things they should be doing to help their business such as setting up a facebook or twitter page.

  • http://beingastarvingartistsucks.com Jeremy Tuber

    Great post here, in looking at the first freelancers should ALWAYS make a point to stay in contact with their clients. Remember, if you’re not talking with your clients, someone else probably is!

    If you’re looking to make quicker, easier sales in a tough economic time, who would be the people who would most likely buy from you? Your existing clients.

    So let’s combine points 1 & 5 – first think about what additional services/opportunities you can provide your clients (that would help THEIR business out), invest a little time researching the idea and how it would benefit your client, then call them and pitch them on the idea. This post points out social media – great example. I also agree that moving away from your expertise might bring in some money but could be dangerous. Again, solid ideas here, thanks!

    jeremy
    beingastarvingartistsucks.com

  • http://www.ikywim.com Luiz Lopes

    Awesome tips. I totally agree with the note that all these things should be carried out all the time, not only when things are bad. Providing the best service you can all the time will go a long way.

  • http://www.digitalaxis.us Randy Gonzalez

    Great Article! Thanks!

  • BacarliW

    Nice tips! Also – apply to jobs on craigslist. If you have Outlook, get Outlook Track-It which can help you with followup reminders. It’s a reminder for you and the recipient. This way you can keep track of what money you are making, and from whom.

  • BacarliW

    Nice tips! Also – apply to jobs on craigslist. If you have Outlook, get Outlook Track-It, from their website, which can help you with followup reminders. It’s a reminder for you and the recipient. This way you can keep track of what money you are making, and from whom.

  • http://www.hotpressweb.com Denver Web Designer

    We tried #1 back in January and generated a surprisingly large amount of revenue by simply re-connecting with customers.

  • pete

    When I read the second paragraph, I’m in doubts… and I have to post my first comment on webdesignerdepot.

    “Customers are falling off of maintenance contracts and smaller businesses may not be looking to start a website right away.”

    Its true maintenance contracts are dropping, no argue. But smaller businesses are LIKELY to start business online, even journalist!!! (http://edition.cnn.com/2009/TECH/04/06/print.on.demand.publishing/index.html) Bosses are thinking, if customers can’t reach them on papers, they must be reachable in web.

    I’m commenting not based on the whole article, but only the mentioned phrase.

    Cheers.

  • http://www.tintedpixel.com Denver Web Design

    Fantastic post, I enjoyed reading it.

    We have found that as companies look to cut costs, smaller Interactive agencies like ours provide an affordable alternative to mega retainer. For us, #7 is quite relevant. #1 sorta goes without saying IMHO.

  • http://www.misty-blue.net Sarah

    So helpful! I’ve become dependent on my freelance work since it’s so hard to find anything permanent in this economy. Some of the tips seem so obvious, but they’re things I wouldn’t necessarily think of doing. Thanks!

  • http://www.samacreation.com sama creation

    Fantastic post thanks

  • GBAAL

    Doesn’t this post contradict #6?

  • http://www.creditcardcompare.com.au David Boyd

    Really great post thank you

  • http://graphicleftovers.com/recent/page/2 Graphic Leftovers

    Now is the time to start leveraging social media sites like twitter to gain exposure and develop some word of mouth marketing about your brand/business. All of the traditional media is dying off and the eyeballs are turning to new media (social media mostly). Start promoting your business for free before everyone jumps on the bandwagon!

  • http://www.iambored.co.za Robert

    I agree with you wholeheartedly when you say that you need to call your clients to see if there is something you can do for them. I believe you need to stay in their minds and always remind them what you have done for them and that they can’t really afford to lose you.

    Pricing is another thing I agree on. I’ve run “specials” where I would give the client a hour for free on a big job. (Network installations/maintenance ect.)

    The advice you give is good and I’ll be looking into some of them to “survive” 2009.

  • http://www.bingogameplay.com robyn

    hye its cool information and tips about design excellent

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    Yes, there is the impact of economic crisis ten tips every day for a party to this people yıklarken search efforts are at a road. These issues related to the economy a nice article.

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    thanks

  • http://www.savingsaccountfinder.com.au Savings

    A great post. Heres another tip:

    Launch one of your own sites. If you run out of work you can take up those projects you have always wished you were doing but never quite got the time. Its taken a lot of people to loads of places, doing their own projects which turn successful.

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    Yeah, it’s really a geat stuff…Useful for every businessman, and the 10 tips that you have discussed are outstanding…Thanks a lot for sharing such a valuable information…