It's Time To Pivot To The Recession Mindset

Like it or not, we are headed for a recession. The indicators are there. You may have noticed it in your business. I have. With the COVID fallout, companies are more operations and bottom-line focused. The growth mindset has been replaced by entrenchment and profit-taking. Consumers—shocked by inflation and portfolio erosion—are becoming more cautious about spending. And fear-based politics is taking its toll on America's cultural optimism. When fear is on the rise, people become more risk-averse and are more likely to "do the math" on their potential purchases.

What should a company do to adjust its messaging in a time like this? Invest less in vision. Focus more on value. In other words, worry less about branding and competitive differentiation, and dig deeper into serving up a rationale for the value of your offering.

Decision-making, whether it’s B2C or B2B, is a full-body sport. As neuroscientists and marketers know, one has to satisfy the “head, heart, and gut” to hook a customer. People have unconscious biases that incline them to make a purchase (the heart, so to speak); then they use their brain to examine the purchase. When the two align, the gut tells them to go for it. Typically, brand plays mostly to the heart, or the unconscious processes. It creates romance and attachment beyond the literal value of the offering. The value proposition leans into the rational processes. During a recession, there is more cognitive dissonance, more opportunities to lose a sale. Hence, the need for a value-based messaging strategy.?

How does one pump up the value? There are lots of ways to do it. Let’s look at a few.

Be An Essential Non-Essential

There are few things in life that we can’t live without, food, water, shelter, and love. However, in our complex modern lives, there are lots of things that feel indispensable to us. For me, some of those essential non-essentials would be strong morning coffee, my iPad with external keypad (on which I’m writing this column), my bike, car, walking shoes, day-packs that fit a certain way and have the right kinds of pockets, etc. They are my lifelines to sanity. Given the recession, I’ve sacrificed lots of things that are less core to me, like travel and pricey restaurants. Messaging can play into this emotional calculus of indispensability by suggesting “with everything else you’ve sacrificed, you deserve this.” A similar approach can be taken for B2B messaging, like “Don’t downsize your corporate security.”

It’s an axiom in the marketing world that you want your offering to be a “must have,” not a “nice to have.” I recommend that you take a hard look at all your must-have messaging and lean into it for 2023. Brainstorm with your coworkers about must-have propositions for your offering. Be smart and ridiculous. A good idea can come later from a “crazy” starting point. Also, talk to your customers. Look for their survival logic as it correlates to your product. One way to tease out these insights is by performing a deprivation study. Take your product away from your most loyal customers, then ask them afterwards what they lost. You’ll be surprised by the breadth of their value-based associations and depth of their emotion.

Be More Things To More People

The brain is a conservative organ. It classifies people, places, and things quickly to reduce risk and keep capacity free for spotting opportunity and real threats. For this reason, it’s easy for a person or a product to get typecast, pigeonholed, or categorized in a limiting way. Credit cards have this problem. People tend to use different cards for different purposes, e.g., the business card, the everyday card, the big-purchase card, etc. Credit card companies are always looking for ways to expand use cases, or spending opportunities, through messaging and incentives. Companies also leverage this kind of categorization to create specialized products. If you’re like me, I bet you have an army of cleaning agents under your sink, cleaners for cabinets, countertops, floors, appliances, etc. Also, you may have protectors and preservers in addition to the cleaners. But, when I grew up, we had four items under the sink, a cleanser, glass cleaner, all-purpose liquid, and all-purpose spray cleaner.

During a recession, specialized products with too few use cases are vulnerable to cutbacks. Marketers need to understand how their products are being used and how to expand use cases. It’s not enough to barrage customers with messaging that suggests new use cases. Because the brain has already categorized your product, it’s tricky to change or expand that cognitive container. But your customers will reveal how to do it if you know how to ask them. Segment your customers into three categories, occasional users, light users, and heavy users. Ask them questions about themselves, their lives, and their product usage. From here, you’ll be able to identify the path to expanding use cases and those customers who are likely to travel that path. I did this with paper-plate users and revealed not only a big brand idea that unified the segments but a world of value-based messaging opportunities.

Stop Promoting Hollow Benefits

This approach, at first glance, is counterintuitive. Aren’t benefits the proof of value? Yes, as long as they are relevant to a customer problem. A good example of what I call a “hollow-benefit category,” is technology. In the world of technology, whether it’s a mobile phone or a hyper-specialized industry-specific offering, features and benefits dominate messaging. You might call this lazy marketing, but its really a corollary to innovation. New tech products and services are born from expanded capacities. Now, we can do something we could never do before. They are, in essence, a solution searching for a problem. In the world of tech B2B, the burden of customer relevance typically falls on the shoulders of the sales people. Marketers throw benefits at the website and hope one sticks. Sales people have to discover where the problems are and how to connect them to product benefits.

What's needed is a market-based investigation to find the problems so Sales doesn't have to do it. It's best to do this while an offering is being shaped, but it can be done when a product is already in market. You need to create a “dialogue” that connects the SMEs (product development, internal thought leaders, engineers, etc.) to prospects. The SME owns the product knowledge and hypothesis for potential value. The customer owns the logic for real-world applications. By interviewing both, and connecting the logic, you can identify the most valuable problems that can be addressed with your new offering. To put a fine point on this, just because you can provide superior benefits (e.g., faster, cheaper, efficient, powerful, insightful, etc.) doesn’t mean that you are providing real value to a client. You need to connect these explicitly to the intractable, industry-specific problems you’re solving for them. In a recession, clients won’t take the risk on an offering that doesn’t have tangible, predictable, and measurable outcomes. Their jobs are on the line, not just their budgets.

There are countless other ways to lean into value-based stories. However, starting with these fundamentals, will provide you with a solid foundation for the coming year. Good luck!