Survive the Recession! What To Do Now!
Enough with the good news already! OK, here’s a little more… Yup, we’re in it. A recession is here. We’re likely to see an uptick when we’re all released from lockdown, then a longer downturn. So I reached back into the Harvard Business Review archive and found this excellent article from 2009 — and though past recessions are no template for this bad boy, human nature remains unchanged.
Here’s the take away:
- Indiscriminate cost cutting on the part of businesses is a mistake.
- Do contain costs, and then take the time to examine your core customers’ changing needs for longterm success.
- Embrace recession psychology! There are four categories of customers — and this, in my experience, goes for B-to-B as well: Slam-on-the-Brakes, Pained-but-Patient, Comfortably Well-off and Live-for-today. Understanding their approaches to purchasing will inform your business decisions.
- Categorize your products/services in this way:
- Essentials are necessary for survival or perceived as central to well-being.
- Treats are indulgences whose immediate purchase is considered justifiable.
- Postponables are needed or desired items whose purchase can be reasonably put off.
- Expendables are perceived as unnecessary or unjustifiable.
Triage and/or reconfigure your products or services to focus on Essentials or Treats — Postponable and Expendable options will see sales drop or longer sales cycles, but they too can be sold, though you will need to change your approach.
This reconfiguration can be deftly done while maintaining your brand promise.We can show you how.