It’s hard to escape news of a potential recession on the horizon. Whenever the economy takes a downturn, we see companies scramble to protect their business and minimize risks. For some, that takes shape in slashing marketing budgets and cutting as many costs as possible. However, the 2008 recession and pandemic-related chaos have shown businesses have the most success weathering the storm when they focus on strengthening relationships with existing customers.

You’ve probably heard that it costs up to five times more to engage a brand-new customer than retain an existing one. As a result, every interaction and sale with a current customer carries more significance in periods of economic instability. Simply put, you can’t afford to overlook or neglect any of your current customers now. Loyal returning customers ensure a steady cash flow and more predictable sales cycles, which are vital in an uncertain economy.

Unfortunately, customer loyalty has been on the decline for years. In 2020, the product shortages and panic-fueled purchases further exacerbated the issue. Nearly 75 percent of consumers tried new shopping behaviors in 2020, according to McKinsey. While consumers search your competitors for reasons to switch, your brand’s loyalty program must be in tip-top shape.

Add New Perks to Your Existing Program

By now, most businesses know they need to have a loyalty program. We’ve even seen companies who aren’t a natural fit for a traditional loyalty program find unique ways to reward their customers. It’s incredibly appealing to consumers, and some even base their buying choices on the advantage of a brand’s loyalty program. According to PR Newswire, 3 in 4 consumers would change brands if they offered a stronger loyalty program. Not only is a strong loyalty program essential for retaining customers, but it can actually work as a growth tool during tough times, as well.

If you’re like many businesses we work with, your current program might include standard rewards, such as a birthday freebie and discounts after a certain number of purchases. These strategies might work well during ordinary times, but a downturn may call for stronger offers. If you’ve been giving out the same rewards for a while, your longtime customers may grow bored or start searching for more valuable programs from competitors. To keep your audience engaged, consider adding unexpected but welcome curveballs that are outside of your normal rotation. These could include flash members-only sales, early contest access, or other creative perks that will remind customers how appealing it is to stick with your brand.

In addition to satisfying current loyalty program members, you can also easily turn these special offers into an enticement for new enrollments. For consumers who have purchased from your brand before, but never joined the loyalty program, these new rewards may tip the scales and convince them to sign up. Turning a once-in-a-while customer into a regular can make a huge difference in your business’ bottom line.

Recommend New Products

In some cases, your customers may be loyal only to one specific product or service your business provides. Because they’re already familiar with your brand, you also have a clearer path to convince them to try out your other offerings in addition to their reliable favorites. For example, restaurants might promote their online ordering service for carryout to past dine-in guests, encouraging them to consider the store for their takeout nights as well. This can be an effective strategy to increase sales without having to prospect new customers.

First party data is an incredibly helpful tool in these scenarios. By utilizing information like past purchasing history, you can recommend other products your members might be interested in or send personalized suggestions for services they may need. In the past, some companies worried consumers would see this highly personalized content as an intrusion. However, research has indicated that loyal customers appreciate when brands show they’re paying attention. According to data from Epsilon, 80 percent of consumers are more likely to make a purchase when a brand offers a personalized experience.

Create Referral Offers

As we said earlier, it can be expensive and time-consuming to land new customers. Businesses are often hesitant to extend that effort during a downturn. However, the prospecting process can become much less cumbersome when your loyal customers act as your spokespeople. To encourage your existing audience to spread the word, consider starting a referral program. For example, you could offer current members a discount or exclusive free product in exchange for referring one or more friends to your business. It’s a win-win scenario: your customer gets a reward for a product or service they use frequently, and your business can organically grow your customer base with minimal effort.

When the economy starts to lag, your existing customer base becomes your most crucial audience. Just because they already purchase from your brand, doesn’t mean they don’t still benefit from marketing messages. In our 15 years of experience, we’ve seen businesses that continue to market during a downturn earn incredible returns on their investment as the market steadies. For more advice on marketing through economic adversity, be sure to download our guide.