You obviously don't need me to tell you that there is an enormous amount of trouble heading our way.
Economists are literally falling over each other trying to get onto CNBC to tell us how bad the looming recession is going to be.
As for a quick definition her: A recession is a prolonged period of economic decline, often defined as two quarters of negative economic growth. The issue stems from the fact that that various governments around the world introduced huge economic stimulus packages to keep things going during the worst of the pandemic. Now they need to put the brakes on.
Interest rates are climbing, social unrest is building; here in South Africa a day with just two bouts of loadshedding is classified as a win, and we're on the brink of an explosion of widespread protest action that is going to be painful and frustrating.
With higher interest rates consumers will have less disposable cash to spend after servicing their monthly debt.
Less consumer spending means lower revenue turnover, lower growth, job losses, a shrinking tax base etc etc. In other words...more and more pressure.
When is this going to happen?
According to a Financial Times survey, 68% of economists believe there will be a recession in 2023. Asked when the next recession was most likely to start, 38% said it would be the first or second quarter of 2023.
So how can you recession-proof your brand to minimise the impact of this coming storm?
Here are three ways you can prepare:
People are going to hunt for places to cut their expenses, so before they blindly take aim at your brand, acknowledge their anxiety and give them reasons to justify their loyalty. Package the value clearly and deliver even more value into that conversation with your customers.
Rather than automatically cutting costs, improve you level of competence to deliver even more.
See this as an opportunity
Recessions are useful mechanisms to flush out flawed competition.
Everyone is going to be taking strain, but rigid, less-agile competitors are going to be taking more strain than others. When the dam wall breaks for them, their customers are going to be looking for a new brand to support.
Do an assessment as too who's looking fragile; who's on the brink of letting things slip?
Structure plans as to how you might acquire and onboard those customers left in the lurch by an industry shake up. Recession could then spell significant growth for those that are prepared.
Innovate your way into the storm
Knowing that the financial conditions, under which everyone is going to be operating under, are going to be less than favourable - should give your business the much needed urgency to innovate valuable solutions that are desirable under those conditions.
These kind of opportunities to innovate don't come around all that often (most of the time people are just trying to defend the status quo, but when the annoying status quo is gone thanks to a recession...well...) - so take this one with open arms.
Using the classic 'Clayton Christensen definition' of disruption,...
“Disruptive Innovation describes a process by which a product or service initially takes root in simple applications at the bottom of a market—typically by being less expensive and more accessible—and then relentlessly moves upmarket, eventually displacing established competitors.” – Clayton Christensen
...disrupt your own product portfolio.
Recessions bring about a significant amount of uncertainty, but this is where strong brand leadership is key.
Remember during the early stages of the pandemic when some weak leaders and brands turned on their staff, their suppliers, their customers to save their own skins? Well, obviously you certainly don't want to replicate that kind of behaviour.
Prove your brand leadership - lean into the uncertainty, show your strength of character in the face of trouble and come out of it even stronger.