I first had the idea to write a blog about a possible recession a few months ago. This was following a superb webinar with Ian Harris of Agency Hackers and his guest speaker Steve Parks, who, according to Ian, successfully predicted what the outcome of the pandemic would be when it was still just in China!
Steve is someone Ian pays close attention to. Why? Well for one reason Ian said, is because of a tweet Steve posted in January 2020 which read:
‘This new strain of coronavirus spreading human to human is very concerning…’ and told his followers to stock up on toiletries – including loo roll and antibacterial hand gel – and recommended preparing for lockdown.
This gave me reason enough to turn up and tune in.
What should you not do in a recession?
Steve said that a recession does not mean we need to batten down the hatches and hide until it is over, but rather, talk about it before it happens, and partner with your clients to reassure them that you can weather the storm together.
It is tricky in the marketing and marketing agency world during a recession. In many respects, what happened in the pandemic was like what happens in a recession, the first thing firms do is turn off their marketing or cut their marketing budgets! There are numerous case studies of why you should not do this, and indeed success stories show why you should increase your marketing spending during a recession. In August 2020, the Harvard Business Review said:
Companies tend to cut marketing in a recession. But firms that maintain their marketing spend while reallocating it to suit the context – be it in product development, advertising and communication, or pricing – typically fare better than firms that cut their marketing investment.
Fundamentally, it is going to come down to relationships and forward planning. Steve suggested that the recession will hit in Q4 2022 or Q1 2023. To be honest, I think things have moved on since Ian’s webinar and by the sounds of things, a recession in Q3 is more likely. The good news is that from research and people I have spoken to, it is going to be a localised recession and not a global one, which would of course be much worse….
This perspective was reinforced on social media by the legendary Daniel Priestley (I do love Daniel Priestley) earlier this week. Daniel said:
“WE ARE OFFICIALLY IN A RECESSION”
Three weeks from now, it’s highly likely that the front page of every newspaper will have those words printed on them. The media will go into overdrive “we’ve had two quarters of negative growth. It’s a recession. Markets are down 40%. Layoffs are coming. We expect the housing market to crash, fear-porn, fear-porn, fear-porn…”
What will follow is everyone will use the recession as an excuse to negotiate terms with you, to tell you your prices are too high, to delay making a decision, etc. Between the media and the noise, you might start to doubt yourself and your business.
Now the truth is, recessions are often a great time to launch new products, get angel funding, win contracts against bigger businesses, find amazing people to join your team, buy distressed assets, get a special deal on supplies, etc, etc, etc.
Recessions are often the time that you become very clear on your value and cut away the stuff the wasn’t adding much.
In the next 3 weeks, mentally prepare yourself to be one of those people who keeps a cool head, goes from strength to strength and builds wealth during a recession. Get ready to stay focused on your prize and to ignore the emotional whirlwind.
Do some scenario planning, start getting yourself and your business tightly aligned to your most valuable targets and start preparing your new marketing messages that resonate with a downward market.
- Great businesses solve meaningful problems. More problems, more opportunities.
- Being a Key Person of Influence in your industry is the only asset I know of that performs brilliantly when things go up, down or sideways!
- By the time a recession is announced, you’ve already been living through it for 6 months!
In this group and especially in our Dent Client communities we will support each other to “surf the waves” together. We will look back at this time and say “this was the moment that everything really came together for us”.
What is the core message?
As a ‘glass half-full kinda girl,’ this approach really resonated with me. I will not lie, I am not looking forward to a recession when it does come, but if we can survive a pandemic, then surely, we can survive another recession? The only challenge I personally see, even with my optimistic attitude, is that I am knackered! I don’t know about anyone else, but the pandemic took its toll, and I am not sure that I have much left to give….
So, what do I do to try and help myself? I surrounded myself with brilliant people who will help me ‘be’ better. That starts with my team at Consortium and continues through to our suppliers, clients, coaches, friends, and our advocates.
The core message at the heart of this blog is:
Do not believe all that you read, be prepared, and stay positive!
Good luck everyone!