Warren Buffett once said, “Only when the tide goes out do you discover who’s been swimming naked.” And with the economic downturn upon us, low tide has arrived.
The good news: If your brand is looking pretty exposed at the moment, taking decisive action now can help ensure it survives this economic storm and is better prepared for growth in sunnier times.
Ingenio and our flagship advice brand Keen.com were founded in 1999 when Silicon Valley was thriving. Since then, we’ve weathered not one but two catastrophic economic downturns: the dot-com bubble and the Great Recession in 2008. When the dot-com bubble burst, we were fortunate to be one of the few VC-backed tech companies of Silicon Valley to survive. Then during the Great Recession, despite slackening revenue, we emerged with a larger, stronger customer base.
A company’s survival can be attributed to various factors, but two for us proved key: the evergreen nature of our product and the deliberate, decisive actions taken by leadership.
Not every brand has the option of offering a product or service that can be leveraged in both economic downturns and upswings. Making the tough calls early, focusing on your critical customer needs and continuing to build customer loyalty can benefit any brand in a downturn.
So what can you do to help your brand weather an economic storm? Here are some strategies that have worked for us:
Cut early, cut deeply
Making the tough calls early is key. Take a long, hard look at your business strategy and supporting cost structure, then determine if they need to change and how. This may require reallocating some budget dollars to higher priority areas and making some tough decisions around cost reductions.
Be aggressive in paring down nonessential expenses to ensure your brand’s survival. Remember, you can’t unspend a dollar. Live to fight another day, and you can always reinvest during an economic upswing.
Break through the marketing clutter
Just as businesses are looking to cut costs in a recession, consumers are as well, so it’s critical to make sure your brand stays relevant and breaks through the marketing clutter.
During a recession, consumers likely will be looking for brands to provide more value for their dollars as they try to stretch them further. The market will become saturated with deals, discounts and promotions to address at home cost-cutting measures.
But what if your customer is looking for something more? Reach out to your current customers and stakeholders to better understand what’s currently top of mind for them. Then tailor your consumer messaging to directly address their needs, allowing you to carve out your own niche and rise above the din.
Build and nurture customer loyalty for the long haul
Developing deep and lasting customer relationships requires steady investment over time, during good times and bad. In fact, customers are more likely to remember how brands treat them during the tough times, which can impact how those same brands are then perceived in the long run.
Be clear on what elements of your brand consumers value most, and prioritize those. Continue to invest in those areas, and you’ll reap dividends in customer loyalty. Having a strong, loyal customer base can help weather many an economic storm.
Ultimately, a brand’s ability to survive a recession depends on many factors, not the least of which is a little luck. However, taking decisive action early and remaining focused on the customer are just a couple of ways to help your brand survive during the low tides.