If you’re a marketer old enough to have worked through the recession of 2007-8, you might think you know how the next two years will pan out. I don’t agree. In my view we need to look back almost a century, but we can actually survive, adapt and thrive.
The 2008 credit crunch had one obvious root cause - the banks bet on thousands of subprime mortgages and lost – but the 1920-21 recession is more relevant to what is happening today. Back then the combination of a hangover from WW1 and the Spanish flu of 1918 meant a 32% retreat in overall economic activity for Western nations, the UK and the US were worst hit and 1921 saw the UK’s worst annual output since records began. We are now seeing the same pattern of negative GDP, unemployment spikes, and by the end of 2020 predictions of a falling housing market. Marketers seem set to continue reducing spend, thinking short-term and opting for profitability over long-term investments in brand equity building.
So as a marketer you might be wishing you could draw the curtains and hibernate until 2022! But before you do that, I urge you to scan some of our previous blogs, consider the wise words of Bank of England guru Charles Goodhart (“when a useful measure becomes a target it ceases to be a good measure…”) and consider these thoughts:
Survive: does everyone know your purpose, your ‘red thread’, and is it still valid? Start here. Get quick data to confirm in a fast-changing market that your strategy is clear, your product still meets important needs today and does a great job for your customers, and you’re allocating everything you can to delivering that.
Adapt: As the UK heads for a bleak mid-winter we need to redraft the three-year outlook. In my view Covid permanently changes parts of the landscape, but changes other parts only temporarily. As part of validating your strategy and offer with busy clients, new ideas might emerge, and this is the time to cut down the red tape and foster teams that move fast to innovate and pivot. In doing this, over-focusing on KPIs may conceal opportunities or mask underlying issues – could the focus be more on that ‘red thread’, to rebuild internal confidence and reduce emphasis on pure numerical targets?
- Thrive: The good times will return! Sectors like telecoms and online entertainment, primary production, grocery and healthcare mainly seem to be in steady-state or growth mode – in five months Disney+ achieved growth that took Netflix seven years. But within this there is huge variation. I would regard shifts like remote working as permanent for many but, as an example, remote GP appointments will remain popular with the vulnerable minority who prefer this, but I feel the rest of us would like to return as soon as possible to face-to-face. Strategists should carefully filter the genuine ‘green shoots’ in the market from the temporary changes and make sure their brand is ready to gain new business where it exists. Again, numerical targets may be less useful: I believe we should aim for a ‘green shoots map’ and responsiveness, underpinned by a strong ‘red thread’. The winners here will be defined by how they exited the recession and capitalised on the growth back to normal.
I think those that seek a positive approach to marketing in a recession will see that overcoming fears and anxiety of the changes to the market conditions can provide real opportunities. So despite the dire predictions and comparisons with the 1920’s, once you’ve reaffirmed your ‘red thread’ could this be the moment for marketers to repurpose budget, look at new channels and mine precious customer loyalty in new ways, rather than cut budgets and let it wither on the vine ?
I believe so.