A recession inevitably conjures up the idea of cutting costs, treading carefully, thinking short-term and minimising risks. But is carrying the behaviours that might serve us well in our domestic and personal lives over to our businesses the best way to meet the challenges of a recession? And will caution, hunkering down and waiting for the downturn to pass help us emerge from a recession stronger?
The world doesn’t stop in a recession, things get harder for sure, but life goes on. If we take our foot off the pedal and go into preservation mode, it’ll feel like we’re standing on one of those interminably slow-moving airport travelators while our competitors, just by maintaining their own forward momentum, stride past, leaving us far behind.
Learn from the past
Having survived and thrived through several downturns, I know that there is a better way of approaching a recession and it comes with plenty of evidence to support it. As Mark Ritson (Marketing Week) says, “Provided you accept that we aren’t living in a paradigmatically different era of marketing in which history means nothing”, you’ll be better off ditching the ‘wait it out’ response.
A significant amount of data from previous recessions demonstrates that brands which indiscriminately reduce spending or go dark, experience protracted and costly recoveries while those that maintain spend which keeps them front of mind, remain relevant and enjoy future sales growth.
Going from a loss avoidance mindset to one where you focus on building resilience and creating continuous improvement is something your brand strategy will play a pivotal role in.
Think brand first
Brand is, in itself, a long-term strategy. It’s an identity – strategic, visual and written that makes up the entire ecosystem around your business and leaves no doubt in your audiences’ minds about your position in the market.
It’s worth remembering that during a recession sales slow down not because your customers are unwilling to buy but because they’re unable to. Being reactive (eg slashing prices) and not taking a long view on brand building is at best, inefficient and at worst, limiting – reducing your brand’s future potential. Defending your market position and ensuring your brand stays front of mind isn’t just so that when the economic situation eases you’re positioned to take advantage of it, there’s also a significant case to be made for being able to increase your share of voice (SOV) in your market during this time simply because, “everyone else is investing relatively less.” (Mark Ritson)
Go further, faster
Making like Samsung* and doubling down on your value proposition and refining your positioning will not only benefit you in the short term, boosting agility and helping you find wins in the here and now, but will also lay the foundations for doing better once the downturn is over: You’ll be riding the upward trajectory of the wave as it breaks through the end of the recession, seeing you ‘surf in’ further up the beach!
If you’ve ever been in a presentation or scoping meeting with me there’s a good chance I would have presented my ‘brand essence’ Venn diagram. This is the sum that feeds the strategy for your brand. If ever there’s a time to revisit this, it’s now – all three circles will be shifting – be that your audience’s focus, your focus or that of the market around you.
Here’s how: questions to ask, tips to follow
What your audience cares about – How is the recession affecting them? Have their needs and resources changed? What they feel about the service you’re providing matters now, more than ever – NPS scores and online surveys can only do so much. Tip: Put together some structured interview questions to ask people how they’re feeling directly. Real insight comes from human-to-human conversations as people are more likely to open up, particularly if the person conducting the interview is independent.
What you care about – If you aren’t 100% clear on your purpose or vision you and your team will lose motivation fast in challenging times. Similarly, not having absolute clarity on your values means your team and customers will recognise that lack of a principled approach to delivering on your promise. Tip: Get out of the office and run an away day – stepping out of the day-to-day helps you find your va-va-voom.
Where you play – Where are the new threats in your marketplace coming from? Who is sharpening their value proposition? Who has left the market? Is your positioning sufficiently distinctive? Tip: Run some competitor research. See if you can niche your offer by reviewing the value of your best services and sectors as well as considering who will be affected most by the recession. Test whether your positioning is robust and clear with this position matrix tool.
Act on what you find
By taking a holistic approach to reviewing your brand strategy and understanding your positioning, you’ll be making sure that you invest in the right places, improving your offering and building resilience into your business. This won’t necessarily mean you need to rebrand your entire business but be open to recognising that your findings may prompt you to refine and refresh what you have, tightening your messaging, sprucing up your visual touchpoints and refocusing your marketing plan.
And the good news? It’s later than you think
By the time the data declares that we’re in recession (defined by having had two consecutive quarters of negative economic growth) we’ll have lived through and survived six months of it already. When the world feels bleak, it pays to remember that this is a time like any other – it won’t last forever and it’s often followed by a period of higher economic growth. Take your team with you and allow yourself, amid all the worry and concern, to still love what you do, recognising the positive impact it has on the people you do it for.
(Harvard Business Review has analysed a number of recessions – those in the 1980s, 1990-91, 2000–2002 and 2008–9, studying almost 5000 companies from the lead-up through to the aftermath of recession. The 9% that flourished post-recession, outperforming rivals by at least 10% in sales and profit growth had all trodden a delicate balance – focusing on “greater operational efficiency along with investing relatively comprehensively in the future by spending on marketing, R&D and new assets.”
Bain & Co’s 2019 worldwide report on the last recession, found that those companies that maintained marketing while competitors cut back were able to maintain growth during and after the recession. They cite the example of Samsung* which maintained marketing investment in 2008–9 and focused on rebranding itself as an innovative company during that time, seeing itself go from No 21 in brand value among Interbrand’s global list in 2008 to No 6 in 2019.)