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How to make your company thrive during a recession?

How to make your company thrive during a recession?

COVID-19, the new coronavirus, was called a pandemic by the World Health Organization on 11 March 2020. The virus is sadly destined to kill a lot of people and - indirectly - companies all over the world. The looming recession will inevitably lead to a plethora of failures among companies, yet it will also lead to new mindsets, tons of new opportunities and life-changing innovations. But how will you make your company thrive during a downturn?

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Don't cut your marketing budget arbitrarily

At the start of a crisis, the marketing department will typically be one of the first to get an email to cut the costs as much as possible. In the short term this might help your organization to maintain its profits, but in the long term - when the recession is over - your position in the market will be weaker and your profit levels lower.

Harvard Business School professor John Quelch wrote an excellent article documenting that brands that increase advertising spending during a downturn, can improve their market share and ROI at a lower cost than during normal economic times. And the more your competitors are arbitrarily cutting marketing costs, the bigger the return on investment for your brand will be if you continue to invest in marketing. 

Successful companies do not abandon their marketing strategies in a recession, they adapt them.

John Quelch, Professor @ Harvard Business School

The decisions you make now will have an impact on your long-term market position. Do you give your competitors a freeway to capture your brand’s market share or will your brand be the winner that takes it all?

Understand how the needs of your stakeholders have changed

I used the term ‘arbitrarily’ quite a few times in the paragraph above. In order to make an informed decision on which costs to cut, you need to know how your stakeholders are responding to the recession. The needs and behaviors of your target audience will change during a crisis. It’s your job to make sure your brand can answer their needs. During a recession, your customers are as uncertain as you are, and they need your brand to reassure them that everything is going to be ok.

Understanding customer needs

Offering your stakeholders emotional convenience will prove to be a game-changing differentiator both during and after the crisis. Alleviate their worries, proactively solve their problems and show them you’re there for them. Show them you truly care. Now more than ever is the right time to prove to your stakeholders that your brand is a long-term life partner that is there when they need you the most.

Offering your stakeholders emotional convenience will prove to be a game-changing differentiator both during and after the crisis.

Steven Van Belleghem, Founder @ nexxworks

Understand your brand's purpose

A recession is also a good time to question why you (deserve to) exist as a brand. You need to know and understand your brand’s ‘why’, its true purpose. Now more than ever, people (customers, partners and employees) need something to believe in. 

Solidarity isn’t a differentiator anymore, it has become a norm during this crisis. I’m confident that the brands that use their business as a force for good will get an even bigger competitive advantage after the crisis. That’s why I’m so proud that Quest is a member of the wonderful B Corp Community.

Get a handle on the job to be done

History has taught us that a lot of amazing innovations happen during a crisis. So why wouldn’t your brand be one of those brands that come up with a crazy new idea that turns out to be a game-changer?

Successful innovations help consumers to solve their problems better, quicker or cheaper. That’s why we always find the job-to-be-done method of the late Clayton Christensen an amazing tool to spark customer-centric innovation. Here’s how it works:

 

We have done the job-to-be-done exercise with almost all of our customers, and it always tends to be one of the hardest challenges for the entrepreneurs or managers. But if you truly understand the job your brand has to do, successful innovation becomes way easier. Maybe that job has changed during the recession? You’ll only find out by talking to your customers.

The world is changing and so are your stakeholders. What will you do? We believe the brands that adapt fast and smart now, will be the winners of tomorrow.

The brands that adapt fast and smart now will be the winners of tomorrow.

Michael Boschmans, Strategy/Innovation Director @ Quest

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