Staying afloat amid a recession: Why not learn to surf?

Management

Lucy Hintonat at Flashtalking by Mediaocean explains that the smartest CMOs and CFOs will work together during time of business uncertainty, to plan for the upturn that will certainly come

“You can’t stop the waves, but you can learn to surf.” – John Kabat-Zinn.

The easiest way to think about the business landscape is as a wide and expansive ocean. Sometimes the waters are calm and clear, sometimes they’re rough and choppy, and other times, you’re smoothly riding a 20-foot wave and hanging ten. It’s important to remember that it’s not the end of the world if you wipe-out – in fact, it’s normal.

The world has seen nothing short of the choppiest of waters and disruption over the past two years. Unfortunately, with the rapidly rising cost of living and global economic uncertainty, we’re likely to experience more rough waters ahead. Some experts are even predicting a recession on the horizon.

But just as no two waves are the same, each downturn is historically unique in its elements, and 2022 is no different. Traditionally in a recession, economic output and employment decline simultaneously. Losses in revenue often force businesses to cut down on staff, and higher levels of unemployment lead to reduced consumer spending.

This year is particularly unique as the job market is currently thriving. The decline of the job market is typically a factor which we’d expect to see at the start of a downturn.

At this point, marketers may be pricking up their ears, as it’s typically the marketing budget which is first to be cut. But all is not lost, as there are trends in consumer behaviour which marketers can take note of and use to their advantage. This will allow marketers to sail with the tide and bring their vessels safely back to shore.

Tapping into recession psychology

Throughout a recession, a company’s audience may shift, not in terms of the specific demographics (age, race, etc.) but in the way the customers are categorised. For example, consumers will typically fall into one of several groups, depending on their financial priorities and their attitudes towards spending. The downturn may mean that these have shifted.

Conversely, the way that customers view and value your product or service may have also shifted. Products can typically be placed in one of four categories: Essentials (necessary for survival), Treats (indulgences), Postponables (purchases which can be put off but are still needed), and Expendables (perceived as unnecessary or unjustifiable).

Regardless of the category each customer fits in, purchasing decisions will always vary among them as priorities differ.

Understanding the new ways your customers think and behave is the key to making smart financial choices in a downturn. Just as you wouldn’t send a dinghy out in a storm, the insights gained from this research will allow marketers to put an appropriate strategy in place and safely navigate the rough tides.

Teamwork makes the dream work

The pandemic placed an unmitigated strain on the workforce for numerous reasons. For many, their workload increased as colleagues were placed on furlough. Others were attempting to fit their existing workload into reduced hours. The importance of improved collaboration within and between teams became excruciatingly clear.

Nowhere is collaboration so essential as with the C-Suite. It’s not unusual for executives at this level to operate in a siloed fashion. Given that they’re responsible for driving change and the majority of the decision making across the organisation, this approach ultimately may be harmful to the business. Therefore, it’s essential they’re in close contact and stay aligned.

The CMO and CFO have experienced possibly some of the biggest waves of change across the business. Marketers have been forced to rapidly adapt and innovate to reach out to an evolved consumer base with an updated set of priorities. For the CFO, managing an organisation’s financial endeavours has not been an easy task over the last two years.

Particularly throughout a downturn, collaboration between these two roles is an absolute must. Finance teams (and the wider business) must be educated on how the marketing goals can ladder to the wider business objectives.

Data is a marketer’s best friend

Rather than cutting your budget, streamlining your media spend is the smart move for marketers. But what exactly should you prioritise and focus your spending on? The answer to this lies in data and analytics.

When it comes to the media, consumers are inconsistent, and their needs are constantly shifting. Marketers must be agile in their approach, as no channel happens in a vacuum. In an omnichannel world, everything is on the table and there for the taking. Data analysis is the vehicle through which marketers can understand what’s being offered on the proverbial table and select the appropriate choices for their audience.

When it comes to the ocean, we’ll never be able to reduce the size of the waves, but we can take control of the vessels that we charter and the routes that we take. Similarly, recessions are cyclical events that we can’t prevent. However, we can use them as an opportunity to ensure we have an appropriate marketing strategy in place, to navigate and learn to thrive in an uncertain time.

Lucy Hinton is SVP Client Success EMEA, Flashtalking by Mediaocean