How to Benefit From Consumer Behavior During a Financial Crisis

Many business owners are probably somewhat afraid right now, seeing as the world's economy has taken a considerable swing for the worse. In the United States surveys have established that a very small amount of the population believe that there is reason to be hopeful righ now. For all businesses it is now very important to articulate strategies on how to deal with the current crisis. Studying customer behavior is an essential part of this and , interestingly enough, consumers may not act entirely as one would think.

Exactly what can be accomplished in your business in order to make it more recession proof, will of course vary somewhat depending on your particular business. For example, companies dealing mostly B2B may find themselves in a slightly different position right now than compared to the business to consumer players. Business to Business businesses may be better or much worse of, depending on how much their special industry is affected by the economic downswing. Selling to businesses might be better as there is more money exchanging hands in that market. But on the other hand, if your main business is supplying components to a larger company that is now going through great difficulties, you might be out of business very quickly.

Although some would well-nigh try and tell you that a recession mean consumers simply stop buying things and everything gets stuck, that is not exactly the whole truth. It is a fact however, that consumers will indeed behave differently during a recession - only possibly not always in a way that would seem wholly reasoned.

Studies have suggested that the following may take place during a downturn.

- People DO tighten the belt and ponder every purchase with extra care.

- People DO worry more and tread more cautiously, even if they are actually quite well off.

- People DO put off buying that new car and may think twice before dining out

You could probably have guessed all of the above, BUT people also

- Most often do not want it to show that they are struggling - this is important to their self image

- They will take certain measures for keeping up appearances

- They will seek out affordable pleasures that aspire to premium perceptions

- For the above reasons, commodities such as beer and various forms of entertainment can be top sellers during a downturn.

As you understand the examples above apply best to the middle class, as the rich will continue to consume more or less regardless of price and the poor to living on whatever they can afford. But phenomena such as these are still worth looking into in order to make your business survive the hard times ahead.

This article taken from Michael Hawkins