There are emerging signals that the US economy is heading for a recession: concerns from Congress on exposures in mortgage finance; banks offering negative interest rates for lending; government offices forecasting tremendous deficits; and key factors indicating slowing economic growth. Some experts warn that not only is a recession ahead, but it could be worse than what we saw in 2008. Should we care?
We need to act on these signals for marketers in the midst of 2020+ strategy and operations planning. Why?
Let’s fast-forward to the near future. You know the drill. First, new product orders will start to slow, and discussions with customers and sales teams will reveal that this demand will only continue to decline. Next comes the mad scramble. Senior leaders will be calling emergency business reviews, and you’ll be stuck late at night crafting a 50-page deck that tries to offer some semblance of why and what to do about it (when you have no idea yourself). That is on top of your day job to stop the bleed.
It’s all happening, as Hemingway writes, “gradually, then all of a sudden.”
Imagine if, instead, you had a plan at the ready. You might even become an outlier in your business, where you are seeing growth or holding your own because of the steps you took today. You already thought it through and incorporated this real risk into your strategy and plans.
So, how can you get started with a recession-ready plan? Ask a Top Gun maverick…they’ll say it’s something about need and speed. Let’s start with need.
Need. The main preparation you can do now is to examine the impact on the customer: What are their needs now, and how does a recession alter their needs or create new ones? Here’s a method to help you do this:
1.) Start with your priority customer segment. Ideally, you’ve got an outcome or needs-based segmentation and have already chosen key segments in your 2020+ strategy. (If not, now is a great time to get your house in order—even a segmentation hypothesis that can be evolved and validated later is better than none.)
2.) For each priority customer segment, create an assessment grid. Evaluate:
- What are their current desired outcomes or job-to-be-done?
- For each outcome/job-to-be-done, how might a recession impact their ability to achieve this? Be specific.
- What new outcomes or jobs-to-be-done might be required if there is a recession? Be specific.
- For each current and new outcome/job-to-be-done, what might be early indicators that the recession is starting to impact them? (You can be tracking this over the next year as part of your ongoing metrics to watch things.)
3.) From this assessment grid, identify where you can deliver value. What risks need to be managed? Where are there new areas of opportunity? There may be new opportunities to solve customer problems and provide relevant, differentiated, and profitable value should a recession emerge. It also may be worth performing this assessment on non-priority segments. While you may not act on it right now, you are at the ready should your early, leading indicators suggest so.
Next, let’s look at speed.
Speed. It’s all about cycle time and getting ahead of the recession. That means finding ways to implement your strategies and plans faster and getting critical customer information to prepare you for when the recession comes. Let’s face it—with softening sales comes last-minute budget cuts, which makes your ability to deal with sales declines even more challenging and introduces new risks in your 2020+ plan. Why not ensure your resources and investments are fully loaded and in motion as you come to the end of 2020? Money spent is money that can’t be cut. Here are some things you can do:
- Identify critical tactics that can be implemented earlier and then get them done.
- Identify what new customer knowledge or questions arise, and get that market research underway to help you dig deeper with customers and value concepts. You’ll probably find that this will help you with your current business!
- Run experiments to test ideas and validate hypotheses
- Make sure all your 2020 dollars are spent!
Now, most important, actually do this. If you’re like most of the marketers I work with, none have free time magically arising where they can explore need and speed. So, open your calendar, and over the next four weeks, block four 1-hour sessions with yourself called “Recession-Ready Planning.” Use these protected sessions to do critical thinking and capture any implications or actions in your 2020 Strategy or Operations/Tactical plan (they are working documents, after all). One thing is certain: we can’t control the uncertainty. Our certain response is that “chance often favors the prepared.” Why not get ready for that date with a chance today in a world of volatility, uncertainty, complexity, and ambiguity!
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