What to do when customers quit spending money

When business slows down, most owners assume their customers are out of money. Jeremy Hanson argues that in most downturns the money is still there, but customers have grown far more selective about where it goes, and that is a problem an entrepreneur can solve. In this episode of Optimized Entrepreneur with Jeremy Hanson, Jeremy walks through how to keep a business busy when inflation, layoffs, high interest rates, and rising household costs squeeze your customers. He explains how to reposition a service from a want to a need by selling the result it protects, using an exterior cleaning business as the working example. He lays out the good, better, best pricing structure, explains why panic price cuts destroy margins, and makes the case for getting smaller before getting cheaper. From there the episode moves into finding the categories where money is still moving, turning a customer list into targeted campaigns, building recurring revenue, responding to leads quickly, running a structured follow-up system, taking market share while competitors retreat, building referral partnerships, removing friction from the buying process, staying visible, and using a slow season to fix the business from the inside. The takeaway: hard times do not erase opportunity, they move it, and the owner who adapts fastest finds it first.

QUESTIONS THIS EPISODE ANSWERS

How do you keep a small business busy during an economic slowdown? Jeremy Hanson recommends repositioning offers around the results customers need, creating tiered pricing, working your existing customer list, building recurring revenue, following up consistently, and staying visible while competitors pull back. Do customers really stop spending during a recession? In most slowdowns they keep spending but become more selective, moving money toward needs, maintenance, urgent problems, and convenience. Should a business lower its prices when sales drop? Jeremy argues against automatic price cuts because costs such as insurance, fuel, rent, and payroll do not fall with revenue; he recommends smaller, lower-priced offers that still protect margin. What is good, better, best pricing? It replaces a single yes-or-no price with three tiers, shifting the customer's decision from whether to buy to which option fits. What does get smaller before you get cheaper mean? It means shrinking the scope of an offer, such as a shorter engagement or a single-service maintenance visit, rather than discounting the full product. Why is a customer database valuable in a slowdown? Past buyers, unclosed estimates, and lapsed customers can be reached with targeted campaigns at a fraction of the cost of acquiring new customers. How should a business follow up on estimates? Use a helpful sequence at roughly day one, three, seven, fourteen, and thirty, varying the format and giving the customer useful information each time.

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