On October 6th 2008, from a landline at the Waldorf Estoria hotel in New York, my dad phoned me up and said: "I don't know how long they will keep this line open, so if I get disconnected, know that your mom and I are okay. But there is total panic here. Cell phones are dead, televisions are on... the market has crashed. Biggest downturn ever. So listen to me carefully, here's what we are going to do... we're going to write a smart, short book called Recession Marketing, and release it in two months time. And we're going to start right now. For those who are unafraid..."
Serge Steijn (Doom & Dickson founder) credo
It involved many sleepless nights, but we did it, albeit in three months in the end. These days I write stories and make music for a large number of people, but back then, almost everything stopped in an instant. Through the writing of the booklet, and the hard times that followed, I learned the best marketing and innovation lessons on how to survive, and even thrive, when times are tough.
So, here is the extract of that booklet with the smartest lessons, examples and stories we've learned from the hardest of economic times we've faced, edited for the Zeitgeist we live in today, for those facing a real downturn or a really tough time within their business right now. As a nice touch I've added a few of the original visuals we used in the book to make our point, but the gist of this article should be clear: when times are tough, and things seem really low, what should your entrepreneurial story be? Turns out, bravery will win you the day.
Thanks dad, for this one.
October 6, 2008.
Globally, all economies are hit by a recession. It had been looming over us for over a year. Some sectors had been reporting declining revenues for some time, and the term 'housing bubble' had been around for quite a while. Despite these signs, it didn’t sink in, we didn’t want to believe the warning signs. And then, this smoldering economic cold suddenly turns into a severe flu.
Business activity shrinks, markets decrease in size, consumers postpone purchases. Even daily groceries are cut back. On October 12th, less than a week after Black Monday, car manufacturers announce en masse that they are reducing or even halting production. Layoffs followed.
The atmosphere changed.
Less than six months before the crash, the outlook was comparable to a fresh, crisp late-summer day: warm but not too warm, a light breeze, a steel-blue sky, and oxygen-rich air. A few grumblers pointed out the sliding American housing prices, but they were dismissed as 'doom prophets'. Economically speaking, the world was on course. Moreover, the stock market crashes of 1987 and 2000 (the dot-com bubble) had taught us that everything is temporary; the sun broke through quickly after those crashes too. No reason for real concern; even if the economy were to veer off course, we would quickly get it back on track. That was the commonly held opinion.
But Black Monday was different. We began to understand that something was fundamentally off. Collateral debt obligations as the bank called them in a fancy name... they were hot air, nothing more than the worst of loans, packed together in even more volatile financial garbage. The falling house prices in the U.S. caused massive mortgage write-downs, and banks faced liquidity problems. They couldn’t even access that global pool of credit (the liquidity market), formed by all banks together. The mutual distrust was just too great.
Credit is the motor oil of every economy and without the ability to quickly and easily borrow money - based on mutual trust in each others' solvency - that engine falters. Not only did banks collapse, or even countries defaulted (Greece), but the entire economic future turned from breezy blue skies to deep dark gray in a matter of weeks, days even. Only through government intervention could financial markets be prevented from a total collapse. And yet the underlying problem remained: too many people, companies, and countries lived far beyond their means and had debts that would take years to pay off.
Spending is cut back. Purchases are postponed. Fear creeps in. Suddenly, it’s over. The recession is a fact.
The main question was now: how should companies deal with this? Because it quickly became clear that there was no escape. The only way was through.
Let's hope it never happens again. But if it does, or if you are going through a really tough time, here are our solid, proven laws of winning through. All 13 of them. Good luck in the fight!
1.
The Law of Solidarity
Reconnect with your audience as people
Your customers can change… and in a downturn they change quickly. Black Monday had caused them to re-prioritize their values and emotions drastically: security, safety, cocooning, group behavior, discipline, order, reliability, consistency, duty, effort, commitment, frugality and family values had shot back to the top. And that had a profound effect on customers’ attitudes and behaviors.
In short; you may think you know your customers, but that knowledge can suddenly be outdated. Your customers’ priorities can see a 180-degree change. When the context is strong enough, they can become extremely unpredictable. They can go full-on emotional in their response, even if there is no logic to it. Just think of the pandemic: the one thing that would never go out of stock in such a moment - freakin' toilet paper - was the one thing that everybody hoarded. Copycat behavior.
So if you're in a bind... Go talk to them, feel and taste how they think and act. And we mean talk to them. Not let some market research company take the reins. Don't start surveys or questionnaires. Buy them coffee. Talk to them. And then buy the next one coffee. And talk to them too.
Plus, remember to really listen.
Don't stop listening until you're finding answers. You may think, in your panic, that a thousand other things are more important right now, but you'd be wrong. The single most important thing to do in tough times is to reach out, talk, and listen to the people you depend on for your financial survival. And really, really understand them. Trust in their views, and you'll survive.
Oh... and when you do the same when your not in hard times - and actually make a human connection by directly engaging with your audience - you'll thrive even more.
2.
The Law of Smart Innovations
Innovate your way out of a recession or tough time
Innovation is still key. An overriding obligation. In a tough time more than ever. In our book De Groeimotor [The Growth Engine] we lined out four different types of innovation. Radical innovation is ingenuity that creates an entire new category such as space travel, the invention of the car, or the television. Great innovation is ingenuity that creates new niches within such a category, for instance the idea of the truck, or the convertible in the car category. Strategic innovation is ingenuity aimed at renewing things in the background processes, for instance being able to drastically reduce production times in the clothing industry, giving us 'fast fashion'. And last but not least Smart innovation is ingenuity aimed at quick, small, but 'nice-to-have' renewal: an ice-cold beer tap from Heineken, a sound cancelling booth on a noisy festival by a phone company, a rubber toy that simultaneously cleans your dogs teeth.
It's the smart innovations you need right now. The objective is to temporarily increase added value in a progressive sequence with multiple smart innovations following each other up. You come up with a raft of smart ideas, and launch one onto the market every week or fortnight. This temporary boost in added value is extremely effective during a recession, or any moment when your company is not doing well for that matter.
3.
The Law of Proximity
All business is local
Prompt action is crucial in tough times. But action will only be effective if you are able to identify problems and opportunities. The sooner you manage that, the quicker you can respond. And you will only manage that, if you are right on top of the market. Through direct daily contact with the market. Like a true old-fashioned merchant.
Your current situation is like a war made up of several smaller fights, spread out over several battlefields. Officers and even troops need room to figure out for themselves how best to act. Their own perception and judgment are decisive. And that decisiveness is increased when they feel they are fighting on their 'home turf', their backyard.
Sure, we mean this figuratively... but also quite literally: did you know for instance that the single most important reason for buying a car is not the brand nor the advertising, not word-of-mouth nor online performance marketing... it's actually the physical proximity of the dealership.
Even the biggest international players know: all business is local.
4.
The Law of Investment
Don’t flatline
In stagnating markets we often see the same Pavlovian reaction: cut costs. But your advertising, design, PR and management consultants will all advise you to keep investing. This is called anti-cyclical marketing. Yet naturally, you take their advice with a pinch of salt, since you need to free up money, not lose it.
But in a tough market everything thinks that way. So, do the opposite.
Any market in a downturn sees fierce combat for market share. During downturns, companies look to boost their market share to keep their volume levels up. Under normal circumstances your turnover will drop at the same rate as the market shrinks. If however, you were to cut your marketing efforts in a downturn, you would of course run the risk of seeing your turnover drop faster than the market rate. Following such a strategy for a prolonged period of time, for example in a recession of up to two years, would surely make your starting position after the recession an extremely bad one.
Let your competitors blink. Not you.
So, whatever your feelings may say, there is a single, objective truth: the player who goes all in, and throws big investments on the table gains not one, but two crucial advantages: the short and in the long run.
5
The Law of Contact
Update your media strategy
Okay... so we've convinced you to scrape the barrel for every last penny and invest more, instead of less. But on what then? Well, this is the golden rule:
Different times require different media.
In a tough time, direct marketing and sales promotions (either offline or online with performance marketing) have to be first priority, something most people will automatically flock too anyway. The perception of value of your product is lower than it should be - either because of a recession or because of your tough time - so the audience will not be prepared to pay the normal, or premium price.
Everything and everyone becomes slightly more cautious and conservative.
So, come up with best offers, and pump them out as much as you can. And here's the crucial bit: on your most reliable media for reach. Of course, it's best to work with media channels that yield measurable results, but reach is more important right now than revenue... even if that sounds counterintuitive. The thing is: budgets are cut, so others will be out there less.
In other words: while in normal times conversion would be the key, and performance marketing the method, in this case, just getting attention is the winner already. Adjust your media accordingly.
6.
The Law of the Rebels
Give creativity free rein
This one is my favorite Law of Recession Marketing, since I really got to play this role on every turn. I've lived being the pirate, the rebel, the misfit... for business clients, for cultural institutions, government apparatus, musicians, productions, art, creative hubs... even years after the Credit Crunch had hit I was still being asked to come in. Not only was it fun to get highly creative, I could see the direct results of it too. A hard time gives a sort of multiplier to crazy out-of-the-box ideas that make them work double as good. Sometimes I wish people would call this misfit too when times were better...
What it comes down to is this: when facing the unforeseen situation of having to lay people off, companies often tend to pick out staff members who are not directly the most productive. Eliminating overheads basically. But that can prove counterproductive. You need rebels now more than ever. Those creative minds that do not always toe the line.
They are capable of coming up with unexpected solutions and ideas. They are the live fish that swim upstream. Set up a 'War Room' of sorts with a group of these independent spirits, just like generals do in times of war. A hyperactive think tank, with a few clever external thinkers thrown in, which meets on a weekly basis with the only objective being to come up with new Smart ideas that can be implemented in quick succession. In order to keep things dynamic, you should switch externals regularly, and bring in people from different backgrounds too.
Difficult times pose interesting challenges, and that is exactly what talented rebels are looking for. It is crucial that creative talent be retained. Fail to do so at your own peril.
7.
The Law of the Zeitgeist
Don’t be out of sync
These times ask for hyper-alertness in your marketing and communication staff. You run a considerable risk of your storytelling being out of sync, and of more mistakes being made than during normal times. Your target group has changed radically over the course of a few days and weeks, and has become hypersensitive to advertising that is not in line with the Zeitgeist.
As Warren Buffet put it: “It takes twenty years to build a reputation and five minutes to ruin it.
You will have to prevent, at all cost, that the promises you make in your storytelling are misinterpreted, or worse still, irritate people. All your advertising, PR, content marketing... the lot, through whatever channel, has to be in sync with each other and with the emotions of the Zeitgeist.
Flexibility to the emotions in the now is far more important than cutting costs. Not just to prevent things from backfiring but again... get it right, and you get double benefits in a downturn.
8.
The Law of Positioning
Now is the time to change tack
This is not the first time a recession hits, and it won’t be the last either. You will surely see stress and panic all around you, and hear stories of companies going bust and capital vaporizing. That is only natural in times like these.
It is part of human nature to sway along with such reactions. Emotions, especially strong ones like panic, are contagious. But bear in mind: only dead fish swim with the flow.
Unless there is really no other option for you, our advice is: don’t react right away. Wait before you unleash a raft of smart innovations on the public, you have to reconnect first. It is also worthwhile to hit the brakes, and chart your course from the sidelines. In other words, repositioning and changing - or reaffirming - that brand story could be crucial.
Be mindful of the fact that being a live fish swimming against that current won't be easy... it'll help knowing where you are headed.
9.
The Law of Remuneration
Reward loyalty
Few will escape the recession.Your competitors are facing the same challenges as you… The struggle for market share. And what goes for you and your competitors, also goes for your customers. They are also on the verge of a huge struggle. B2B markets have already turned into arenas with companies locked in battle for market share.
But things are different for consumers, they don't have to fight for a share of the market, but are nonetheless facing equal insecurity. Chances are your competitors will start tapping new customers.
And they have set their sights on yours. Do you actually know who your most loyal customers are?
Side with your Loyal customers, Loyal employees, Loyal business partners. Trust those that have been loyal to you for a longer period of time. And if you really want to seize your opportunity, now is the time to reward loyalty. Because swimming faster for the people that stood by you, will make them swim even faster still, for you.
10.
The Law of Choice
Oversized and inefficient portfolios
A recession can be a prime opportunity to take a closer look at your portfolio.
Brands and products in a portfolio are often overvalued, leading to skewed expenditure and revenue. There are also many cases of a certain brand or product held in a portfolio against the better judgment of the manager, because he wants to spare himself the embarrassment of admitting a mistake.
Plus, with too much going on in your portfolio, tough times or no tough times, the combined sum of your storytelling is likely to be all over the place, which we feel is the one thing that you do need to mind when thinking of costs: what is wasted money on wasted stories for brands or products that are not likely to keep me afloat?
A sense of reality is essential. It is crucial that you know what part of your portfolio requires close scrutiny, and what part can be put on hold, or disposed of straight away. Which brands weigh down on the portfolio and lack staying power, and which ones are nimble and in good shape? Which ones provide the greatest added value? What do we need to do to optimize the portfolio?
11.
The Law of Partnership
Pulling together and sharing boosts opportunities
You are not alone; the entire chain you operate in is likely suffering. Your distribution channels, your advisors, your suppliers, your staff, unions and so on. In times of crisis, the power of collectives and collaboration can be decisive. Carefully study your chain, and pinpoint the ties that need strengthening. That will significantly boost your chances of staying successful. Brainstorm with your chain partners (take all parties’ interests into consideration) on how to weather the storm together. Isolating yourself would be unwise. The one taking the initiative will receive the greatest reward.
12.
The Law of Corporate Responsibility
Sustainability actually becomes easier
Back then in the midst of the crunch, but now too in these different times, the news keeps telling us that the world is changing. Changes in our financial system, changes in the international balance of power, changes in our society, changes in our personal situations, climate changes...
We often think that people in tough times will flock back to more conservative thinking. And yes, this is very, very true... but with a crucial catch: they use more conservative values as their defence, but will be on highest alert to renewal and innovation. That's basic survival mode: keeping your options open.
So, paradoxically, in tough times, people become more conservative... and are more open to change than ever.
Insecurity throws up opportunities if you want to bring change. If you have been struggling with corporate social responsibility, sustainability and ESG goals for a while now (like many have) now is actually the time to make your biggest move towards it.
Plus, we will spell this one out for you: Any piece of good news about your company will now have double impact. And if you can show consumers that even during times of crisis, you have not lost sight of other problems on earth, you will win the highest praise you can get, and a brand loyalty none can beat.
13.
The Law of Leadership
Separating the men from the boys and the women from the girls
Leadership is the critical success factor in this whole game. And leadership starts with believing in your own abilities. If you don’t have any real faith in your ability to make your market share grow during a crisis, don’t even try! Ask someone who does have that faith to lead this process.
Consequently, the first thing you should do is look in the mirror and ask yourself: do I have the ideas, energy and will to fight? Because you will need it.
Leadership is required. The same goes for energy, ideas and fighting spirit. Be visible. Be unrelenting.
And be bold.
Love, as always,
Rogier
And check out the book The Whole Story - The Ultimate Guide to Storytelling.
(Or if your are too stressed go for this one ;) Restart - Burnout Recovery From a Patient Perspective.
