Economic headwinds will undoubtedly remain through 2024 and into 2025. Beyond that, who can say with any great certainty? It's also not clear how bad this uncertain period will be, with some saying the worst in a lifetime and others a little more optimistic. One thing is sure: Some sectors will benefit, some will muddle through, and some will unfortunately be negatively impacted.

During the 2008 GFC, research and a subsequent article from the Harvard Business Review, 'Roaring out of a recession,' proved very useful for my clients and me. I found myself going back to it throughout 2019-2021 during the COVID years and again now.

Their data pool was the 1970 recession, the 1990 Slowdown, and the 2000 Dotcom crash. Add to this the experience of 2008 and the COVID years, and it's a great place to start for what's coming and what you should do.

The research looked at strategies businesses could adopt to not only survive the downturn but, more importantly, emerge from it in a strong position, poised to take advantage of the opportunities during the recovery.

The four approaches were.

Prevention-focused companies make defensive moves and are more concerned with avoiding losses and minimizing risks. Cost-cutting usually involves staffing, market development, and marketing cuts, which significantly reduce a business's ability to service current customers and potential new ones. These may have short-term benefits but be very costly in the long term.

Promotion-focused companies made offensive moves that provided short-term upside benefits over the competition, usually in deep price discounts, which aren't great for short-term margin and profit and can be detrimental to long-term opportunities. Play the price game, and someone will always be cheaper. Play the price game, and getting your prices back up can be challenging and very costly.

Pragmatic companies combine the defense and office of the above. This is good in the short term but not in the long term.

Then, the Progressive companies deployed the optimal combination of defense and offence. They also outperformed Prevention-focused companies two-fold.

These companies found efficiencies throughout the business rather than cutting costs. They retained capacity and capabilities as much as possible, looked for new opportunities to exploit, and continued to market their offerings so they were more at the top of mind with category buyers during the downturn and when things picked up, which is great for recovery.

What progressive moves could you make? What defensive moves could you make that would help your ability to do business in the short and the long term? What cost-saving could benefit you in the short, but significantly hurt you in the future when the better times come back?

Whether your market will grow, maintain, or decline, it's all about market share and your share of it. How do you get more than your fair share, and what are you prepared to invest to secure it?

I say 'invest' because I see market development and marketing as investments in the future success of your business rather than costs. In times of cost-cutting, investments in future success should be among the last things to be cut.

With market share and not necessarily market growth in mind, here are four things I think every company should be thinking about. You can class these as things for all times, but they are especially important in tough times, as you can't be messing around.

Focus on you.

This always starts with your customers and your category buyers. Who are they? How will their needs change? How will their buying behaviour change? How will their consumer journey change? And what do they need from you?

Once you are clear on this, you must understand how your category will change. From past recessions, we know some categories will struggle, and others will be more robust. Which one are you in?

In recessions, as purse strings tighten, consumers become much more risk averse, which sees big, well-known, trusted brands do well. Are you the biggest?

Consider what your competition will do and how you can do it better and more prominently to steal a more significant share of mind, which will help you gain greater market share.

Then, the 'you' part: understand your current position, be clear on your opportunities and areas of focus (no more than three is good), and then define how you best present your brand to your customers and category buyers.

You should focus on long-term priming for future sales, with smart and effective performance marketing playing the short term.

Marketing is about creating future demand and fulfilling current demand for what you sell. In most categories, 80-90% of category buyers are not 'in the market' to buy this quarter, but they will be in the future, and that's where brand-building activity is so valuable, as it primes future buyers to buy you. It is also where all the big profits are. 

Most of us are now well-familiar with Misters Binet and Field's excellent work "The Long & The Short of It," which recommends that brands invest 60% of their marketing budget against brand-building activity that primes future buyers for the best business and profit results.

In times of recession, it pays to increase the brand-building percentage as more people will be 'future buyers' as most categories will contract. Raise your awareness, salience, consideration, and preference. Not only will you be more appealing to that smaller group of 'in-market' consumers now, but you'll be better positioned to take advantage when the better times return. You need to invest in the long game. Investing may seem risky, but doing nothing is dangerous and could be far more significant in the long term.

Smarter, more effective motivational marketing is also recommended, but don't overinvest here, particularly if your market will shrink. You also want to stay away from promotional activity offering price discounts, as someone will always play the commodity game better than you, and you'll only reduce your margins and profit on each sale. It will also be much harder for you to raise your prices again when the good times come back.

Maximise your ESOV.

The impact of SOV was first investigated by John Philip Jones and published in the Harvard Business Review in 1990. Jones studied the effect of a brand's advertising intensity relative to its category competitors and showed that the brands whose percentage of the total category advertising spend (referred to as their "Share of Voice" – SOV) exceeded their market share percentage that saw market share gains. This is known as Excess Share of Voice (ESOV).

When your competition goes quieter or quieter, it is much easier for you to get loud, allowing you to increase your SOV, which will increase your share of mind. This all correlates very nicely with market share gains. In times of recession, market share responds more strongly than in normal times. It's also much better for long-term profits.

It is very important to remember that what you do during the recession will help recovery post-recession. Invest during the recession to maximise your ability for success in the long term.

It's worth noting here that with many advertisers reducing or pulling media spending, you can also take advantage of some cheaper media to build greater SOV through the recession, as good deals will be available.

Harness the power of creativity.

Like in the good times, creativity is hugely valuable to businesses as it helps you stand out more, garner more significant attention, cut-through, and impact, and help to build greater brand likeability and preference.

If you're thinking, "Nonsense, Gareth," let me tell you about Paul Dyson's research from 2014 that looked at the main drivers of advertising profitability. Being the biggest brand in the category was the most influential, as that works as a shortcut to consumers' decision-making. Next was creativity. Everything else was miles behind. So, if you're not the biggest, and even if you are, creativity is a wonderful thing to maximise margin and profit for any business.

For more proof, Nielsen did some research in 2017 that found creative delivered 47% of the contribution to sales. In 2021, Kantar revisited Paul's work and got the same results. It pays dividends to get creative, and good creativity is always worth the investment.

In recessionary times (like the good), it also makes every dollar invested in media work even harder. It also helps with price elasticity, allowing you to maximise margins. Great, right?

The last thing I'll say about this is that there are three scenarios for how a recession affects you and what you should do about everything I've just written.

If your sector benefits, maximise your opportunities with big business, marketing, and advertising bets. This is great for the short and the long term.

If your sector is secure, look for low-cost opportunities to increase your SOV to maximise short-term returns while also playing the long game. Get creative.

If your sector will be a victim, go quiet unless you've done the maths and there are some offensive moves you can make.

And a last lastly, for you, Something Different is here to help.