By Michael Copp, Executive Vice President
Paul D. Meyer, is President and Co-CEO of Tecker International, LLC, and recently conducted and annual strategic review with PHCC National Association. Part of those discussions included how to help our members and our association weather the impending recession forecasted for 2020-2021. Several considerations are listed below for your awareness:
- Leadership and management –
- Leadership includes maintaining vision, constant communication, education on cyclical nature of economies, creating a culture of trust, strategic insight and preparation for upturn.
- The association becomes the member’s support system and point of stability. Members will remember when you were there during rough times.
- Maintain closeness to members. Exude trust and confidence.
- Scale back spending on non-essentials.
- Recessions are an opportunity for brands/products to expand market share. Increase messages focused on “efficiency” and “value.”
- New products are put on hold. Reduce risk.
- Environmental scanning is crucial. Continue to scan for opportunities during and after recession.
- Communicate, communicate, communicate (especially new companies).
Peter Drucker noted that “the greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.” Paul Meyer notes there are several possible actions that can be taken during a future economic downturn:
- Maintain your course and constantly share your vision. Timeframes may need to change, but if long-term vision is still correct, hold position and communicate.
- Stay in. As other brands cut back, your share of voice is going to increase. Your brand will be more visible for less money and you will come out of a recession with greater momentum.
- Get more than your share. Share becomes more important in tough times, and benefits go to those with resources to outspend the competition: when everyone is losing, the strong become relatively stronger.
- Provide better value. Businesses which provide better value for money in their customers’ are more profitable during economic downturns and grow faster after recovery.
- Strategic flexibility is crucial. Economic downturns give managers the opportunity to look harder at their organizations and reconnect with their markets. Bold strategies are required.
- Spend more. Those who increase spending in economic downturns generally improve share, and therefore profit; those who increase spending significantly may have to absorb a short-term drop in ROI but can thereby gain share substantially and greatly improve their position, and profit, for the future.
- Good times always follow bad. Taking action during less than rosy economic times provides a foundation for coming out on top of competition when the economy rebalances.
- No more, Mr. Nice Guy. An economic downturn can be seen as a wonderful time to take an unfair advantage.
- Manage your message. Reflect the new customer mindset. Shift your advertising message, shift funds to product lines that are suited to an economic downturn, stress quality and value, and unveil new uses for old brands.
Recommendations were obtained from various sources, including the American Marketing Association and the World Advertising Research Center