Selling in a slow economy

When the economy is slow, consumers tend to tighten their purse strings. Conservative shoppers may skip big-ticket items or carefully consider each penny they spend. This can make it challenging for businesses to turn over inventory.

Any business -- large or small -- may be faced with cyclical periods of slow business. But since the recession fell over the country like a suffocating blanket, some businesses are finding it hard to stay afloat and move merchandise or services. The economic downturn of the last several years has been much more pronounced than those that occurred in the 1970s and 1980s. That means fewer people have disposable income to spend, and business owners might need to work extra hard to entice consumers to buy their products.

Forget Luxury

Very few people are spending money on luxury items these days. Therefore, to be successful you may have to reposition products and services as necessities rather than idle wants. During a recession, consumers may only spend money on necessities or items that will improve their quality of life. Fluff items will be weeded out. Therefore, look at ways to turn your items into must-haves. For example, gear them toward health, children and pets. A massage therapist may want to focus less on the spa experience of a massage and talk more about the health benefits.

Convince People of Need

Consumers don't accessorize as much during a recession as they might when the economy is healthy. Instead, they're looking for the bare necessities or items that will help them down the road, such as a life insurance policy or a new roof on the house. If yours is an item that may not have immediate worth, try to transform it into a need. A customer may not have to put new tires on his car right now, but stressing how doing so can improve gas mileage while saving money in the long run could be enough to entice customers to buy. Necessary products will enjoy lower income elasticity than luxury items, and you want to cater to this area.

Create Other Spending Incentives

Deep pricing cuts can be counterintuitive to your business model. Also, it also may alienate customers who think low price indicates poor quality. Rather than slashing prices to entice spending, think about other ways you can make your items more affordable. Some business owners create their own methods of financing or layaway. This enables small payments to be made with the end goal of ownership. There's also the option of offering an incentive such as "buy one, get one."

Go With a Loss Leader

Sometimes the hardest thing is getting people into the store to buy. But research indicates that once customers are in a store, they are likely to purchase something. Some businesses like to advertise with a loss leader. This is essentially a very low price on one item that gets people into the store, where the rest of the items are not on sale. Although it could mean a profit loss on the discounted item, usually it is made up in profits from selling additional items.