By Michael Nyman, Founder and CEO of Acceleration Community of Companies
The economy is in a profound state of uncertainty, with an almost unprecedented combination of circumstances creating serious ambiguity about what we can expect in the coming months and even years.
Persistent inflation, rising interest rates, the war in Ukraine, and high volatility in the stock market are all contributing to the sense that down times are on the horizon, but there is very little agreement on what that might look like or how things will be different. As a result, businesses are taking fresh stock, asking themselves how they can prepare for what is ahead, even as it remains so unclear.
Just as one has to batten down and prepare for a storm whose path may be uncertain, as many have been forced to do in this difficult hurricane season, now is the time to plan and develop a nimble response to any economic headwinds (and sidewinds and tailwinds) that are coming. The key to surviving, and even growing, is to develop and maintain a strategic vision. Be careful about making hard decisions based purely on fleeting economic trends.
Here’s what marketing industry executives should do when considering how to prepare for what is coming.
Assess your agency’s health.
Every agency has discovered a lapse or two in monitoring how well the business is functioning. There are probably a few loose screws in every department that need some tightening.
And, there are ways to shore up your boat against the rising tide of uncertainty. Consider whether now is the time to use more freelance professionals. Look at your roster and ask yourself if people are working most productively. Be aware of your marginal performers and consider right-sizing the organization. Do this regularly to better recession-proof your agency.
While you’re at it, check out your real estate costs and the cost of your technology. Measure the ROI on all of them. Are you getting good value for what you’re spending?
Clients need to hear from you. They need to know you are aware of the difficulties they are experiencing and that you are offering the same level of service and counsel. Make sure you reach out to them even more frequently than before.
The same goes for employees. People get nervous when they see the news, and they fear belt-tightening and shrinking budgets. Communicate honestly and often with your staff about the health of the agency.
Stabilize your client base.
It’s easy to be lulled into a sense of complacency when things are going well. But we must take stock on a regular basis of where we stand with our clients, especially as we weather what could become a storm.
To that end, ask yourself what you can do to make yourself more valuable to your clients. Maybe you need to have more measurable results around your work that you can share with current as well as potential clients.
Focus on market share.
In uncertain economic times, budgets may be cut back, but you can still be more aggressive pursuing new clients. It is natural to want to pull back when skies become cloudy but now is the time to consider expanding.
This is the time to go after more leads in order to grow your business. Identify leaders in your agency who can help you gain ground.
Lean in to specialization.
Many organizations pride themselves on being all things to all people. And sometimes that might work – but too often agencies can find their work forces tripping over themselves to deliver on all fronts.
In the extremely segmented advertising, marketing, and media sectors, this is the time to do a few things and do them well. It doesn’t inspire confidence in clients if you’re spreading yourself too thin to be expert in any one area. Now is the time to work toward establishing yourself as being best-in-class.
The bottom line.
There is no one playbook that will work every time the economy shifts, so agencies need to prioritize nimbleness and adjust quickly to change.
Developing a nuanced response is key because, right now, market signals are not entirely clear. This is not a “light switch” moment, such as the mortgage-backed securities crash that took down several banks in 2008, or when Covid hit, or after 9/11, all major single-event crises that stopped businesses in their tracks and made everyone feel paralyzed. Businesses have been doing well and consumers are spending but hard times are ahead.
We know it’s going to rain, we just don’t know how badly.
About the Author
Michael is the founder and CEO of Acceleration Community of Companies