Is your business ready for a recession?
Is your business ready for a recession?
How to survive and even grab market share in a recessionary market
I’m going to start with the punchline here:
Recessions are historically short - the average being 11 months
Fear, combined with doomsday reporting before and after an actual recession, makes this period seem much longer
Most businesses overreact and lose momentum and market position
“There have been 11 recessions since 1948, averaging out to about one recession every six years. However, periods of economic expansion are varied and have lasted as little as one year or as long as a decade.
The average recession before 2007 lasted about 11 months. The Great Recession lasted 18 months. The 2020 recession lasted just two months—the shortest on record.”
https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011
The key to winning in a recession is knowing what to cut and what to double down on.
DO:
Focus on strategies, processes, and people that directly impact revenue and cash flow - marketing, sales, and your accounts receivables team
Make sure that these areas are still yielding consistent results, even though they will understandably be a new lower benchmark
Scrutinize capital expenses and tools/software (a notorious source of expense creep)
DON’T:
Cut marketing spend, just consolidate into the most productive lead generation
Get overwhelmed by the dip in sales units and revenue
Overly focus on short-term ROI/ROAS
So, for most consumer-direct businesses, these are my recommendations.
Double down on solutions to current market pain points. If you have a product or service that solves a core pain point of the recessionary market, double down on marketing and sales of that product.
Realign products and services to solve relevant market pain points. If you have a product or service that can be tweaked to realigned as a solution in the recessionary market, then do that.
Don’t starve your sales force. I’ve seen this too many times. Organizations slash the marketing budget and assume that sales can get better at prospecting. Instead, keep sales fueled and motivated with a consistent flow of leads.
Broaden and deepen your lead generation targeting and campaigns. This recommendation deserves an article of its own, but the short of it is that as a market shrinks, it is critical to widen the top of the funnel. As the market size shrinks, you will have to sustain your necessary lead volume by broadening your products, targeting, and personas that you can serve.
Help your salespeople become better lead generators. Support and coach them on how to create little microbrands. Build them personal landing pages, email and text message templates, and scripts to run against their past client and aged lead databases, and templates and coaching on creating social media content to grow a larger audience.
Create content, lots of content. Be the expert, the solution, in a painful market. In challenging markets - both industry and consumer - people want to be led. Become THE voice that your industry and consumers find a hopeful vibe from. It requires significant quantity and frequency to rise above the doomsday noise.
Take advantage of competitors failing. In some ways, business gets easier in tightening markets. Most of your competitors will be severely impaired during these down cycles or even go out of business. They are overly leveraged, poorly positioned, or just poorly run. This opportunity will leave you with less competition. Get aggressive.
Increase marketing while others are slashing budgets. As the marketplace thins out, you will have the opportunity to gain more impression share at bargain prices. Evaluate your search marketing spend ramping up - Google Ads and content creation (for SEO).
Pick up sales and marketing talent. There will be carnage. There have already been thousands of layoffs in the mortgage industry. This is a great time to build an A-team. Pay attention to Linkedin and your network. Reach out and have conversations with this newly available talent pool.
Focus. Get aggressive! Think through this list. Get a clear vision for your way forward for the next six to twelve months. Then get your whole organization laser-focused on two or three priorities. Then execute!
Get aggressive if you are well-positioned in the market and not overly leveraged!
Push harder.