Will the economy hurt my business?

Will the economy hurt my business?

Sounds like an obvious question, but the answer is not completely obvious to me. As a dance studio owner of less than 10 years I have not experienced a downturn in the economy the likes of the one we are facing now. I know that dance studios have been around for a really long time- so what's in their business model that has kept them running all these years, even during economic hard times? What's the secret to staying afloat and keeping kids in the classroom?

When I look at my business I feel like I give an great product at a reasonable price. I know people (and my customer target group) invest in their children before all else. I know as a mom I would do without to make sure my daughter could keep dancing. So what's the answer?

The only way to know if the economy will hurt you is to start asking your customers. I am working on my annual customer survey to every parent - I hope you all do these too- feedback from parents is very valuable. Each year I ask if we met their expectations and other typical stuff. However, the most important question I ask them is "Would you recommend us/or Have you recommended us to a friend or family member." This is the all-important question- to understand word of mouth marketing impact. And word of mouth is a powerful method of marketing during troubled times. People trust each other more than anything else.

This year I'm working on adding a question or two tied to the economy to my survey - Will you be able to continue to provide your child with dance classes next year? Or, what can we do to help you with more flexible payments? etc... I don't have the right question yet, good questions take time, but you get the idea.

I encourage you to start thinking about a question or two you can ask to make sure you can respond and react smartly to the downturn next season too.

Dropping your price is not necessarily the best option(even though your customers may tell you to do it); increasing the value of your product is probably the most sound advice.

You could consider offering "specials" or "loyalty rewards" to existing and new customers. Remember, not to leave the new deals for the new students only. Even if it's a free pair of tights or a free logo'd bag (can be a marketing expense for you, ask your accountants) it can go along way in this deal seeking economy we are in- so reward your customers!

Some other random marketing ideas:
Re-packaging your classes to be more affordable without lowering price is also an option. Shorter term- less price, but at same hourly rate for you. Allows parents to keep some flexibility without committing to a long term service agreement making them feel safe spending money.

Summer programs are probably the most at risk right now. You could offer a free class as part of your package to get people over the hump or other added value efforts.

Other marketing tricks would be to say "we are not raising prices this year" - holding the barre' on prices.

Look for alternate sources of funding, health care plans that cover some classes as part of a fitness program. This is working well at my school. You just may need to rename and invoice differently to make it work for their needs.

Bottom line is you need to be empathetic without sounding to desperate in your conversation with customers in person or in your marketing materials. The economy is tough on all of us, but we'll get through this with some creative thinking.