Consumers fall into four groups during a recession: slam-on-the-breaks, painted-but-patient, comfortably-well-off, live-for-today. This is how to market to (with) them.
The key to thriving in a recession is understanding what your customers value and bringing your product from a nice-to-have to a must-have. Replace FOMO and scarcity with family, trust, and safety in your campaigns.
Customers negotiate harder and look for more durability. Companies need to reforecast demand, prune weaker items in their product portfolio, and stress market share over competitors.
Business strategy in a recession
Goldman Sachs – Black Swan: Coronavirus
This episode features interviews with experts in health, epidemiology, and economists. Always good to get insights straight from experts.
“Think of a recession as a sharp curve on an auto racetrack—the best place to pass competitors, but requiring more skill than straightaways. The best drivers apply the brakes just ahead of the curve (they take out excess costs), turn hard toward the apex of the curve (identify the short list of projects that will form the next business model), and accelerate hard out of the curve (spend and hire before markets have rebounded).”
There are four types of companies in each recession: prevention, promotion, pragmatic, progressive. Of those four, the progressive ones have the highest chances to survive and thrive.
20% of market leaders come out as laggards after a recession. Emerging leaders, on the other end, shorten cash conversion cycles, don’t cut headcount by more than 10%, maintained their debt/equity ratio, and made significant acquisitions towards the end of the downturn.