If you’ve been watching the news lately, you’ve likely been inundated with warnings of a potential (or inevitable) recession. That’s much like playing Will Smith’s I Am Legend on repeat in your mind, nothing but scenes of what used to be and the disaster ahead. But, if this is what you’ve been thinking, I want you to stop it because I want to focus on how consulting can be your ticket to survival in difficult times instead.
Typically, in an economic downturn, you can expect consumers to cut spending and businesses to scale back their efforts to essential projects and work. This can lead to a contraction of business in the consulting industry. However, this doesn’t have to signal trouble ahead.
“In times of recession, there are massive opportunities and fortunes to be made; for new up and coming entrepreneurs, this is the time to go and start a business.” — Richard Branson
Part of what causes so must chaos is the unpredictable nature of the economic landscape during a recession. Many businesses realize that what has been working for years no longer resonates. There is the inability to pivot successfully before financial ruin. But what if this unpredictable nature was not erratic at all? What if we could learn lessons from the past to guide us into the future?
I believe that this is the approach we must take to sustain our businesses during difficult times so that we can thrive like never before when the economy recovers, which it always does.
So, how should we adjust our approach if we find ourselves in a challenging economic landscape?
First, start by reevaluating your offer.
Are you assisting with an essential need?
In the consumer space, this is relatively straightforward. However, it would be best to focus on delivering value at the functional level as people have less disposable income. Harvard Business Review describes the needs at this level in their Elements of Value Pyramid. Think about your approach in alignment with Maslow’s Hierarchy of Needs. How can you help clients reduce costs, reduce risk, make money, or simplify their lives? During such times, people are focused on being able to fulfill basic physiological needs such as food, security, and health. This is where you need to position your offer.
The business-to-business (B2B) space is similar in some respects. In most cases, projects that have already been funded and started will continue. However, after that point, it will be essential to consider how you can begin to advise on and provide assistance with efforts that are part of the organization’s core work. The goal is to be seen as necessary for their survival, an indispensable expense. Therefore, it is time to brainstorm how you can be of the most significant benefit in your industry through your unique expertise, talent, and skill set.
The second thing you will want to do is optimize your marketing strategy.
When business becomes somewhat unpredictable, you need to know where new signals arise. And there is no way to know this if you aren’t carefully tracking and looking at your data. It is also crucial that you conserve your resources and energy as well, which means you can’t afford to market without a strategy. You need to find the best way to reach your potential clients and increase your number of leads and eventual sales of your offer. What is working now may not be the best approach in the future.
In both the consumer and business markets, the buying behaviors will change. John Quelch and Katherine Jocz discuss this psychological shift in their article, How to Market in a Downturn. This article cites how traditional segmentation by demographics or lifestyle may be less reliable than psychological segmentation. Most people reevaluate their consumption priorities during such times, eliminating certain purchases. Therefore, your messaging must change to accommodate this shift.
One consideration is shifting your focus to consumer bases or businesses that have historically done well in a recession (i.e., fitness, healthcare, food industry, value-based brands). Create a simple and low-cost marketing strategy to gain traction early on to target these markets effectively. Don’t wait until the bottom falls out. Sales are much easier to make when there is no energy of desperation that causes distrust with potential clients. Give yourself time to navigate and adjust. But, ensure that marketing continues because it is essential to your business’s success.
Lastly, be ready to prove ongoing return on investment (ROI).
ROI is a concept in consulting that is often not addressed during economic prosperity. However, when the desire and need are to cut and scale back as much as possible, people are looking to make sure they invest in only what they need.
Having a way to capture the outcomes associated with your work and feed this information back to the client helps build trust, confidence, and reassurance. It helps them feel as if they are making the best decision at that moment. And these results must be evident to them and aligned with what was initially promised. Data tracking, reporting, and even benchmarking are no longer optional. It needs to be part of your process. You want to make sure you capture both tangible and intangible results and tell a story with the data you present.
The bottom line is this…
We may not be able to control whether or not a recession hits, but we can control its toll on our consulting business. The key is not to sit helplessly awaiting eventual doom but rather prepare to navigate the choppy waters until the sea becomes quiet and still again, which it will.