Having lived and worked through the ‘dot com’ crash in 2001 while living in San Francisco, after living and watching the NASDAQ rise five-fold between 1995-2000 then watching the ‘bubble burst’ and the market dropping almost 77% and losing billions of dollars.
THEN, surviving the 2008 Financial crash while living and working in New York – I am predicting after the 2020 Presidential elections, like many other economists, financial experts, business leaders and marketing experts there is a huge likelihood of another market crash. (Which will include both the Federal Reserve and The Central Bank and have global ramifications)
I am writing to try and highlight some of my observations and best tips having safely ‘weathered’ the above-mentioned events over the past couple of decades.
In order for you to minimize the lack of market discipline, avoid the looming credit and housing bubble after the next Presidential election in 2020 – I should explain my view and comments on how business executives, marketing companies and entrepreneurs need to do to avoid and side-step this potential crisis or market meltdown.
Importantly, having worked in the communications industry, and been heavily trained and skilled with Data powered tools, including: Direct Marketing, CRM, B2B, PR, Mobile and Digital Marketing – I have always found the following tips are a must in a market that is in a massive downturn.
As I have been involved, watched and survived over the last couple of downturns, I can clearly say, a commonality is – as sales start to drop for Ad Agencies and all businesses alike – every business starts by cutting costs, reducing prices, postponing investments, ceases staff training, cuts benefits and drastically cuts all marketing and new business costs.
BUT, as I have learned, such indiscriminate cost cutting is a HUGE mistake and ends up being even more costly when the market begins to recover again.
Although it’s smart to control or contain costs, failing to support your brand or examine your primary customers’ changing needs can jeopardize performance over the long term.
Brands and Companies that put customer needs under the microscope and take a scalpel rather than a cleaver to their marketing budgets in response to shifting demand are statistically far more likely than others to flourish both during and after a recession. I saw this in San Francisco, New York and I can now see the future unfolding ahead after the Presidential Elections in 2020 too.
YOUR BEST CUSTOMERS ARE YOUR CURRENT CUSTOMERS
Having worked at Ogilvy & Mather, Leo Burnett, Ammirati Puris Lintas and inside The Omnicom Group (NYSE:OMC) multiple times over the last 30 years, I have seen and learned, during recessions, it’s more critical than ever to remember that loyal customers are the primary, enduring source of cash flow and organic growth. Marketing isn’t optional—it’s a “good & must do investment in continuing sales”. It is essential to bringing in revenues from key customers, clients, fans, members and others.
TRUST MATTERS AND REDUCES RISK
During my career, I have been fortunate enough to work on amazing brands like P&G, Unilever, Nestles, etc. – so I know that continuing to build and maintain strong brands MUST be a strategic priority.
Your Customers and Clients will recognize and reward your trust, that’s why maintaining your customer’s trust is one of the best ways to reduce business risk in recessionary times. The stock prices of companies with strong brands, such as Unilever, Proctor & Gamble, and Johnson & Johnson, have held up better in recessions than those of large consumer product companies with less well-known brands.
KEY FACTORS IN MARKETINGIN SURVIVING A RECESSION
The first thing that must be done is, leading up to and during downturns, marketers and advertisers must balance efforts to reduce costs and shore up short-term sales against investments in long-term brand health. END OF STORY.
Note: I said reduce costs NOT cut all spending or investment
Don’t be an ‘ostrich’ and put your head in the sand and pretend a recession isn’t on the horizon – always plan and forecast for the one that is coming and plan accordingly.
MY PLANNING TIPS FOR IN A RECESSION
- Don’t panic but remain practical, calm, decisive and profit-minded.
- Cut the right costs and exercise your bargaining power.
- Harness the power of Integration and TRUST
- Cutting advertising will do long-term damage to your business.
- Careful targeting PLUS using the tracking advantages of online marketing, LinkedIn, B2B, Digital and Direct Marketing will be your best sources of success!
- When the economy struggles, the small businesses and areas that constantly perform strongly are:
- Movie theaters. People are especially in need of distraction when times are tough.
- Beer, wine and liquor.
- Tattoo parlors.
- Thrift stores.
- Home health care services.
- Veterinary services.
- Have a Cash Reserve. Much like an individual, it is imperative for small business owners to have a set of cash reserves to lean on when the economy is rocky.
- Maintain Lean Inventories.
- Diversify Your Client/ Customer Base.
- Put the focus on Customer Service And finally,
- Create a Customer Loyalty Program – Not only will your loyalty program help you retain your old customers, which also costs you less, remember it will cost you 5-9 times more to get a new customer than it does to retain an old one.
A customer loyalty program does much more than just retain your old customers and clients. It can also help you attract new ones. This will add fuel to your small business growth strategy in tough times!
Finally, it is important to remember that during recessionary times, while many companies and brands are making employees redundant and firing many, the best chief executives all seem to cement the loyalty of those who remain by assuring employees that the company has survived difficult times before. They maintain quality rather than cut corners, and they service existing customers rather than try to be all things to all people.
The best and most inspirational CEOs also spend more time with customers and employees.
Economic recession often elevates the importance of the finance director’s role is assessing the balance sheet while cutting the marketing director’s budget. BUT, the best CEO’s stand up and inspire, motivate and galvanize the troops and better manage working capital which can so easily dominate managing customer relationships. Good CEOs must counter this.
‘Successful brands and companies do not abandon their marketing strategies in a recession; they adapt them.’
Because, in recessions, marketers have to stay flexible, adjusting their strategies and tactics on the assumption of a long, difficult slump while retaining their ability to respond quickly to the upturn when it comes. This means, for example, having a pipeline of innovations ready to roll out on short notice. Most consumers will be ready to try a variety of new products once the economy improves. That’s why it is so critical to build emotional connections and TRUST to succeed into the future.
To your continued success and move towards more targeted marketing efforts, email, digital marketing efforts and loyalty programs!
I have seen how the most successful leaders have been visionary during ‘tough times’ and all have continued to emphasize their core values.
About Geoff De Weaver:
Super strategist who directs Fortune 500 clients to define their vision, create a strategy, and harness their internal innovation to grow their business or reinvent their products.
Expert at building and transforming brands, businesses, and digital and physical customer experiences at scale.
History of success developing and executing cross-channel global marketing campaigns to drive brand positioning, equity, and awareness while increasing engagement and sales and loyalty.
Innovative entrepreneur, author, speaker, and advertising executive with vast expertise driving business growth, reinventing brands, and implementing global marketing campaigns.
Connect with me at:
Twitter at: https://twitter.com/geoff_deweaver
Amazon Authors on: Geoff’s Books, Biography and Blog
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