When most people think of a recession, many hope to simply survive.
I think this is the wrong approach.
Recessions are the opportune times to be aggressive in making forward progress for your business.
The majority of Fortune 500 companies were founded in a recession, even though recessions only account for 20% of the past 150 years of U.S. economic history.
The reason this occurs is that these two things happen in a recession:
First, some opportunities get destroyed (think: airlines, hotels, restaurants).
Second, new opportunities emerge or grow dramatically (think: video conferencing, delivery services, telemedicine, PPE).
The opportunities that get destroyed are generally glaringly obvious and well covered by the news.
Historically speaking, new opportunities are often much less obvious.
Customer problems change.
Customer priorities change.
Customer psychology changes.
Break-even points change.
The growth doesn’t always go to the largest company. It goes to the company that is in alignment with the change.
Sometimes, you get lucky because the market moves toward you. (Think Zoom video conferencing; they grew from 10 million to 300 million meeting participants in five months. That’s 30X growth in less than two quarters!)
Other times, you have to find where the market has shifted toward.
Sometimes, prospects are still willing to buy what you sell, but why they buy has changed. If you don’t adapt your sales and marketing messages to your target market’s new priorities, your sales will suffer.
The key to doing all of this is to first engage in defense, and then engage in offense.
When the world changes overnight, you must revisit all of your prior decisions that were based on assumptions around the “old normal” as opposed to the “new normal.”
In retail, does it make sense to open up 100 brick and mortar locations when shopping is now illegal or poses a life and death threat to customers?
Such a decision might have made sense before the pandemic, but it makes absolutely no sense given new information.
To play defense, you need to revisit your prior decisions in light of current market conditions, recalculate your go-forward economics, and align your cost structure with where the market is now (as opposed to where it used to be).
This is playing “defense.”
If you go out of business between now and next quarter, you don’t live long enough to play offense.
So, defense must come first.
Once you’ve done that, it’s time to play offense.
You play offense by figuring out where your market demand (or at least market priority) has shifted toward. Once you figure that out, you try to find a way to tap into that demand.
Right now across multiples industries, markets, and customer segments, I see an enormous demand for helping customers cope with uncertainty.
In your market, this might be a product opportunity.
This might be an opportunity to change sales messaging.
This might be an opportunity to change the billing model (same revenue, but billed differently to reduce perceived risks).
This might be an opportunity to do thought leadership marketing to teach prospects to use and view your product in a different way — as a way to reduce uncertainty.
In a dramatic market shift, you must figure out what’s going on inside the head of your target customer. You need to be in close contact with your ideal customer and figure out what has changed for them.
You want to get ahead of those changes and help them head in the direction they want to be heading (as opposed to convincing them to want the opposite of what they want).
Many SaaS marketing departments have someone in charge of “demand generation.” I have always hated that term.
You can’t generate demand. The market wants what the market wants.
What you can do is get ahead of that demand.
What you can do is show a customer how what they demand can be met by your product.
What you can do is to channel that demand toward your business versus a competitor’s.
What you cannot do is create demand where demand fundamentally does not exist.
Believe me, I’ve tried dozens of times and failed every time!
In most markets, demand hasn’t disappeared entirely. It has merely shifted somewhere else. Sometimes, it shifts completely out of your product category (e.g., hotels); other times it shifts a modest step or two beyond what you normally consider “your product category.”
For example, toilet paper used to be bought to solve a functional problem in the bathroom.
Now, it is bought in part to provide a sense of security.
Yes, I may be locked down.
I may be unemployed tomorrow.
I may die from COVID-19.
But… at least I have the security knowing that I can still go to the bathroom when I need to!
I’m certain no toilet paper brand manager at Procter & Gamble has ever thought of their product as being in the “security” or “peace of mind” industry.
I’m still waiting for someone to market toilet paper that has a ten-year shelf life.
For all I know, all toilet paper has a ten-year shelf life — but none are marketed this way.
(Incidentally, that’s an opportunity that exists now that didn’t exist before the pandemic.)
There are many, many more such opportunities like this in your field. You just have to go find them.