A perfect storm is coming for early-stage and fast-growth companies.
Uncertainty is at an all-time high. All over the world, businesses are facing the challenges
of rising inflation, ongoing supply-chain issues, and turbulence in the stock
market. This is compounded by challenges experienced during the COVID-19 pandemic
that we hoped would all be in the past by now.
Business is different today, introducing new challenges like remote work and quiet
quitting. While technology has offered opportunities to increase productivity and
create new opportunities for businesses1, endless Zoom meetings have led to a
loneliness epidemic2. Leaders are struggling to create a thriving company culture
when teams work remotely. Employees feel disconnected, and their work can begin
to seem transactional.
Exacerbated by our fractious social milieu, these business events set the stage for
continuing unevenness. And although an uncertain future awaits, one thing is certain:
a recession is looming. It may not be tomorrow, next week, or even next month,
but a recession is certainly in our future.
More than 75% of Americans believe we’re already in a recession or a “vibecession,”
a period when people feel anxious about the economy even though it’s technically
in good shape. A possible argument in favor of this belief could be that in the face
of increasing prices for goods and services and a slowdown of economic growth,
the second half of 2022 saw record-high employment rates in the US, and wages
began a rapid climb.
The buying power of consumers continues to decline. Food prices alone rose by
9.9% in 2022, and while they’re expected to increase as much in 2023, they’re still
forecast to go up 7.1% in 2023 — well above historical average rates. And according
to a Gallup poll conducted in January of 2023, Americans haven’t felt as pessimistic
about their finances since the Great Recession of 2008–2009.
Yet spending continues to climb even in the face of this anxiety about the uncertain
future. The economy isn’t following the trends or expectations of a typical recession,
and yet the economy is in decline.
At the end of the day, a vibecession often precedes an actual recession and sets in
motion the same human behaviors as an actual recession; this, along with the fact
that there’s been a recession nearly every ten years since 1958, makes it likely the
next one is on the horizon
So, it’s time to steel yourself.

Weathering the Storm:
When business, social, and financial uncertainty happen at once, a perfect storm for
a recession is on the horizon.8 And as noted before, the timing is right. But seeing
these storm clouds at a distance is also a gift. It allows us to prepare for what we
know will come.
This was a lesson learned during the financial crisis of 2008. At the time, Paul Otellini,
CEO of Intel, kept his cool and invested heavily in research & development (R&D),
expansion plans, and hiring9. This proved a terrific opportunity for early-stage and
fast-growth companies when other major companies followed suit. Apple, Google,
Microsoft, and Facebook (now Meta) spent the last recession acquiring more than
150 companies. When the market bounced back, they were bigger, stronger, more
profitable, and better positioned for the future.
And dozens of startup founders profited f rom being successfully acquired.
Given that we’ve had 11 recessions over the last 50 years10, we’ve seen how things
play out again and again. Knowing what we need to do is simply paying attention to
history.
I’ve worked through several recessions — five, in fact. The one that’s coming will
make it six. During one recession in the early 1990s, I launched a product so unique and successful that the Smithsonian asked me if they could add its model to their
archives. I spent the ensuing years learning why that product worked so well and how the
same success could be repeated for others. After studying 500 brands, I developed
a recipe that I tested with over 200 clients.
It’s a recipe for success that underscores the recommendations in this book. First,
you’ll look at why successful brands make it through recessions and how they do it.
You’ll then learn how you can systematically prepare your business to do the same.
For smart companies, knowledge is power; our objective here is to tap you into that
power.
After reading this book, you’ll understand how you can recession-proof your business
with a few simple changes to your marketing strategy.
So, let’s get started.

What is a Recession, really?
Recessions can be many things to many people. Some define it as two consecutive
quarters of falling GDP, but that’s led to some fierce debate on Wikipedia.11 The
generally agreed-upon terms are as follows:
◆ a recession is a significant and persistent decline in economic activity
◆ recessions can last months or years
◆ they are often (but not always) predicted by an inverted yield curve
◆ recessions are coupled with high unemployment that can linger even after the
economy bounces back.

What Happens During a Recession?

Consumers and businesses generally spend less in a recession during inflation and
a rise in unemployment. Most businesses experience a decline in sales and have
fewer opportunities for borrowing.
Since funds are harder to come by, recessions can be especially challenging for early-
stage companies which rely on funds from lenders, venture capital, and angel
investors. They tend to have smaller financial cushions and haven’t built up sufficient
market power to ride out lean times.
Larger companies may lay off employees, delay raises, or cut spending to balance
the books. They may pull back on research and development (R&D) or cut marketing.
Most companies do cut back on their marketing efforts, despite the evidence of
the advantage of the contrary.13 During the 2008 downturn, spending in the US on
things like online, newspaper, or radio advertisements dropped by 13%.14
Smaller companies, meanwhile, may not have the option to make these types of
changes. They may be forced to borrow or close shop instead. These actions have ripple effects on employees, suppliers, and the broader community.
This generates a cycle where less spending begets less spending.
Tech companies rely on large investments to get off the ground, so this pullback
from investors can be devastating. Good ideas could get lost. Companies we rely on
might even fold.
The good news is most opportunities can still be found in the technology sector.
Although they’re still likely to be affected by a sales slump, there are great examples
of tech businesses that have not only weathered past storms but emerged even
stronger.

What Opportunities Does the Coming Recession Present?

A recession is bound to make us rethink everything. Businesses will be forced to let
go of the things that weren’t working and focus on things that do. It will be difficult,
and it may feel like you’re forced to make tough decisions. But if you make the right
ones, your business will be stronger for it.
Marketing can be your key to success during a downturn. It’s an opportunity to gain
market share and get a better return on investment (ROI). This tried-and-true model
worked for Kellogg’s in the Great Depression. Post held the largest market share
in the ready-to-eat cereal category at the outset of the downturn. But when they cut
back on spending during tough times, Kellogg’s decided to double its advertising
investment. The end result? Kellogg’s became the category leader, a title it holds to
this day.

Learning from Past Mistakes

Investing in smart marketing can be your secret weapon to success in a downturn,
but before we move forward in a positive direction, we need to overcome three mistakes
we’ve made to date.

MISTAKE #1: Focusing on Expansion versus Financial Growth

Recently, venture capital has driven a surge in companies obsessed with expansion
— without any concern for the financials. As appealing as short-term growth
can seem, recent crashes have exposed the long-term risks of this model.
For example, WeWork raised over half a billion dollars from investors by 2014 and
was expanding faster than ever, despite losing six million dollars a month.16 It’s a
textbook example of many dubious startups that have been provided with infusions
of money by venture capitalists in search of the next unicorn — a company valued at
over a billion dollars.
What’s more, a unicorn may still not turn a profit even after reaching that pinnacle
valuation.17
As recession approaches, we need to refocus on profits and forego dreams of limitless
expansion. We need to pay better attention to the bottom line and consumers’
needs.

MISTAKE #2: Transactional Relationships

Many of today’s businesses are focused more on their valuation than their end users.
They value their consumers only for their spending.
It’s easy to spot companies making this mistake. Their digital and transactional marketing tactics treat customers like numbers on a spreadsheet instead of human beings with real emotions and needs.
The problem is reinforced by the fact that most B2B companies believe they are not
behaving transactionally. They use the term “customer engagement” without understanding
what true engagement is.
In a world where consumers have access to more information than ever before,
businesses need to communicate with them in a way that resonates and connects.
That means recognizing that people are looking for authenticity and real human
relationships.
Although business-to-consumer (B2C) organizations have understood this for
years, the business-to-business (B2B) world is only just beginning to realize that it’s
also true for their customers.
Transactional marketing is focused only on short-term benefits — a strategy that’s
not designed to outlast a long-term downturn.

MISTAKE #3: Disconnection from Employees

It’s not just consumers who are disappointed and disconnected. Employees are
feeling it, too. Engagement at work has declined for the first time in a decade, falling
by 2% from 2020 to 2022, and it’s a trend that’s predicted to continue.19
Employees feel their employers’ words and actions don’t align. Company culture
can no longer rely on ping-pong tables and happy hour. In recent years, many companies
have struggled to show they care about the well-being of their employees.
Inadequate sick days or supplies, for example, have prevented many employees
from performing at their best. They feel burned out after working long hours at
home on work that no longer seems meaningful.

So How Can You Get Back on Track?

This ebook is designed to provide you with a set of proven tools that you can start
using — right now — to correct the errors of the past. It will arm you with time-tested
defenses to make your organization as recession-proof as possible.
At the same time, it will help you take advantage of the unique opportunities for success that only a recession can provide.

Step #1: Approach Marketing as a System

According to the American Marketing Association (AMA), marketing “is the activity, set
of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large.”21
Unfortunately, this definition does marketing a disservice and fails to convey its full
potential.
What’s missing in the AMA’s description is this: effective marketing is systematic.
When done right, it’s a clearly defined set of procedures that nurtures customers
all the way along the buyer journey and beyond. Each step is part of the process for
a reason, with measurable goals and key performance indicators (KPIs).
If you don’t define marketing as a system, you run the risk of wasting effort and conducting
activities or undertaking processes that aren’t properly connected.
For example, while most auto manufacturers try to cast the widest possible net to
sell as many products as they can, Ferrari makes a conscious effort to position itself
as a prestigious luxury brand that isn’t for everyone.
In fact, the company’s marketing reinforces the message of exclusivity to such an
extent that it’s believed they will refuse to sell a car to a potential customer — even if
they can afford to buy one — if they don’t fit the image of an “ideal” Ferrari owner.
The manufacturing side of the business is completely aligned with this systematic
messaging. Ferrari carefully limits the number of vehicles it produces each year to
ensure demand is constantly higher than supply.
Because of these strategies, Ferrari may not sell as many cars, but every unit they make is significantly more profitable. Just before the pandemic, Ferrari made estimated profits of $94,000 on every car it sold. To put that in perspective, Ford had to sell 908 cars to make the same amount. Nissan had to sell even more: 926. Even BMW needed to sell 30 cars to match Ferrari’s margin from just one unit. A systematic approach demands that marketing be treated like a well-oiled machine,
in which each part is strong but works to the optimal support of the other
parts and the total machine. As you prepare for leaner times, your business needs to have a clear view of how
each area of marketing works in collaboration with the other areas. You’ll also need
a clear set of KPIs that allow you to identify how each part of the machine is running
and to spot any leaks before they become bigger problems. Continuously be aware
of changes in the industry. You need to be plugged into new technologies or trends
that impact how customers and businesses interact. It requires diligence on the
part of you and your team to keep things running smoothly.
As the recession approaches, start to think about the systems you have in place. If
there was ever a time to review your marketing, it’s now. Is anything disconnected?
These are your areas of opportunity.
It’s also the perfect time to leverage new tools and technologies. Innovations in artificial intelligence (AI) have allowed businesses to make data-driven decisions when
it comes to their marketing efforts. These decisions allow marketers to improve customer segmentation and, thus, offer
a more personalized experience across every channel. The result is a well-oiled
marketing machine that builds trust with customers automatically.
This is the perfect time to examine your customer journey and refocus on providing
a better experience at every touchpoint..

ACTION: Tune Up Your Marketing Machine

As you prepare for leaner times, your business needs to have a clear view of how
each area of marketing works in collaboration with the other areas. You’ll also need
a clear set of KPIs that allow you to identify how each part of the machine is running
and to spot any leaks before they become bigger problems. Continuously be aware
of changes in the industry. You need to be plugged into new technologies or trends
that impact how customers and businesses interact. It requires diligence on the
part of you and your team to keep things running smoothly.
As the recession approaches, start to think about the systems you have in place. If
there was ever a time to review your marketing, it’s now. Is anything disconnected?
These are your areas of opportunity.
It’s also the perfect time to leverage new tools and technologies. Innovations in artificial
intelligence (AI) have allowed businesses to make data-driven decisions when
it comes to their marketing efforts.
These decisions allow marketers to improve customer segmentation and, thus, offer
a more personalized experience across every channel. The result is a well-oiled
marketing machine that builds trust with customers automatically.
This is the perfect time to examine your customer journey and refocus on providing
a better experience at every touchpoint.

Step #2: Tap into the Power of Purpose

Purpose is what motivates us every day. It drives us to achieve things beyond our
perceived limits. It empowers us during difficult times because it gives us faith that
we are doing something important.
Your brand purpose is the reason you exist as a company. It’s an aspiration for your
business that’s grounded in humanity, not just profits, and inspires a call to action.
Why care about purpose? Because it adds hard, measurable value to your business.
If you build a process that allows your business to live out its purpose every day,
you’ll not only build trust from your customers and employees, but you’ll also begin
to see success you never thought possible.
Purpose-driven companies can weather the storms of the market better. They believe
their cause is important and understand that challenges do not outweigh potential
benefits. A 2018 Deloitte study found that purpose-driven companies had
“30% higher levels of innovation and 40% higher levels of workforce retention.”26
Companies with a strong purpose see higher returns with higher market share
gains and faster growth than competitors.
The value of purpose is also clear when you look at past recessions. In 2008, for example,
purpose-driven companies experienced an average annual growth rate of
51%. They were also 63% more likely to survive the Great Recession than companies
of the same size that weren’t motivated by purpose.
Why? Because purpose-driven companies attract customers. They are drawn to the
vision of the world your company is creating. That’s an asset at the best of times, but
it’s especially important during a recession. When times get tough financially, people
want to spend their hard-earned money with people they trust to provide optimal
value and service.
The key word in the previous sentence is trust.
This is a big part of the reason for Apple’s success. Many other tech companies offer similar — even arguably better — products, but Apple wins over consumers time and time again thanks to its vision.

It’s not just consumers; investors are also motivated by purpose. A company with a
deeper commitment inspires investor confidence, meaning more opportunities to
attract the right funding at the right time.
And when employees believe in their company’s purpose, they perform better. Purpose-
driven employees have a 20% longer tenure and are nearly twice as likely to
promote their employer to family and friends.28
Purpose isn’t everything, but it lays a solid foundation for a connected set of expectations,
and opportunities, with your key audiences. The good news is that the process
can easily be incorporated into the systematic approach we discussed in tip #1
in the form of promise/ deliver scenarios.
When you’re a purpose-driven brand, you attract investors who want to support your
mission, your employees, who want to make a difference, and who are motivated, and,
most significantly, you attract people who want to get on board with what you’re doing.
Your marketing is your voice, and it’s important that you align it with your purpose.
Lead with your purpose in your marketing, and your customers will connect with
you on an emotional level. You’ll build a strong connection, something so strong
that it will help them keep coming back, even when times are tough.

ACTION: Define Your Brand Purpose

Defining your brand purpose means figuring out what makes your company different
from everyone else. Purpose isn’t just performing for social good; it’s something
that comes from deep within and defines your business, acting as a North Star as
you navigate your way to success.

To properly define your purpose, you might ask yourself questions like these:
◆ What sets you apart from your competitors?
◆ Why should customers choose you over other alternatives, especially if your
rivals are less expensive?
◆ What positive or negative experiences inspire you to give back or pay forward?
◆ What do your customers and prospects value?
◆ What can you do to demonstrate that you understand and share their values?
Once you’ve established your brand purpose, it becomes easier to identify the kinds
of opportunities that will help grow and develop your business.
You shouldn’t feel limited by your purpose. It should be a personal and passionate
source of inspiration. It can also evolve and change over time.
Your brand purpose should be the driving force behind everything you do. It’s what
guides your strategy, shapes your messaging, and drives every decision you make.
If you aren’t clear on why you do what you do, this is the time to reflect. Find your
purpose, and you’ll weather the impending storm better.

Stuart McFaul Associates’ Recession Case Study:

Tapping into 3PAR’s Purpose Led to Multi-Billion Dollar Acquisition
3PAR was considered a successful Silicon Valley-based company in financial terms
but was considered “boring” by the media and investors. Stuart McFaul was retained
to overcome this problem. He interviewed customers, company executives, and
management to better define the company’s purpose and discovered that every
cloud-based financial transaction for every major financial institution in the world
passed through 3PAR’s servers. A simple campaign slogan — without 3PAR, the
cloud wouldn’t work — and the remotivated efforts of the 3PAR team helped them
change their perception in the media. Within a few months, they secured a $2.4
billion acquisition from HP. To read the full story, visit https://hey.stuartmcfaul.
com/3par.

Step #3: Act with Integrity: Walk Your Talk and Build Trust.

What you do is more important than what you say.
To be a purpose-driven company is more than having a reason to do what you do; it
also means you use that purpose to power your decisions.
Lead with your why but be sure to follow through with your actions. Know what
you’re promising and deliver on it. Failing to deliver on a promise is worse than failing
to deliver on what you haven’t promised.
Unfortunately, many brands have failed to follow through on their values. In the early
2000s, Martha Stewart was a symbol of family values. The Martha Stewart media
empire and fortune were rivaled only by that of Oprah. But Ms. Stewart’s image was
shattered when she was found guilty of insider trading. The wholesome values her
brand preached didn’t align with the actions of its founder. As a result, she’s worth
about 12% of what Oprah is today.
It’s not just celebrities; businesses often say one thing and do another. For years,
German carmaker Volkswagen touted its diesel cars’ low emissions as part of its
marketing campaign across the US. This made the scandal even more shocking
when news broke that VW engines emitted 40 times more nitrogen oxide pollutants
than permitted. Worse, its vehicles were equipped with software specifically
designed to make their engines “cheat” during emissions testing. Following the
news, the company lost over 2.5 billion euros in the fiscal quarter and has struggled
to regain consumer trust.29
Being dishonest is bad for business. Many companies focus solely on what they can
get from customers and are blind to opportunities to give, missing out on substantial
returns that can result from generosity.
Conversely, businesses that act with integrity see incredible results.
Let’s look at an example. Patagonia is an activewear and outdoor clothing company.
Their love of the great outdoors has aligned with their passion for protecting it.
They’ve made environmental activism a part of their brand from the beginning, but
in 2018, they took a step further by changing their mission. They no longer just “build the best product, cause no unnecessary harm, use business
to inspire and implement solutions to the environmental crisis,” but now, their
business “is to save our home planet.”
Patagonia spends more time advocating for environmental causes than it does
marketing its products and donates 1% of sales to grassroots groups every year. They
are proving their values by putting dollars behind them.
What’s more, Patagonia products are made to last for years, and they offer repair services
for all their clothing and gear, a service that adds value to all their customers.
Every single decision they make is influenced by their company values. Their purpose
is reflected in their products, operations, and marketing. As a result, they’ve
reached nearly $1 billion in annual sales.
This mandate was cemented in 2022 when Patagonia founder Yvon Chouinard donated
98% of his non-voting stock to the Holdfast Collective, an organization that
fights climate change.

ACTION: Deliver on Your Promise

Once you’ve defined your brand purpose, it’s time to put it into practice. So, ask
yourself, how are you proving your value? How are you building loyalty? It’s this loyalty
that will keep customers coming back the next time they need a similar product
or service.
Begin to look at ways to walk the talk, and you’ll begin building brand loyalty that will carry you through the next economic downturn and beyond.

Step #4: Inspire to “Rehire” Your Employees

The mission and vision of your organization aren’t just ways to inspire your customers.
They can also play a key role in keeping your employees engaged.
In recent years, hybrid and remote work have made it more difficult to build a company
culture that sticks.31 The result has been a great resignation, where employees
are leaving their jobs at record rates.32 Why? Because they feel their work has lost
meaning.33
Workers, especially younger workers, are demanding more from their jobs than
beer fridges and the occasional free lunch. They want work that feeds their souls
and seems worth doing. They are also setting new boundaries in their work. This
trend, known as quiet quitting, is when employees opt out of tasks beyond their assigned
duties and become less invested in their jobs.34 These unengaged workers
make up an estimated 50% of the American workforce today.35
It’s not just a qualitative problem; it has a major quantitative impact on businesses.
A recent Gallup study found that disengaged workers cost the German economy
between 214.7 and 287.1 billion euros annually.36 Lower engagement means lower
productivity and, thus, lower revenues, so it’s time to start taking it seriously.
One company that’s taken major steps to build a connection with its employees is
Puffco, a Los Angeles-based vaporizer manufacturer. Named as one of America’s
Best Cannabis Employers in 2022, the company’s employee benefits include pet
insurance, a cell phone stipend, and flexible spending accounts. The company also
has a written “employee commitment” and supports charities with environmental
and health-related missions. All this may be part of why two-thirds of its workforce rate the company as “amazing.”

ACTION: Reconnect with Your Workers

Take some time to reflect on the engagement in your office. What is your employee
net promoter score (NPS)? Do you feel productivity is lacking? Are employees quick
to sign off at the end of the day or excited about new challenges in the workplace? What can you do to inspire your employees? How can you improve their contributions
before the downturn? Even if you change nothing else, this one tip can have
a massive impact on your business.

Step #5: Stop Transacting and Start Relating

In a good business relationship, both parties win. It’s an exchange, a partnership
where you’re able to meet one another’s needs.
The rise of digital and social media marketing has taken away what was always a key
part of business: relationships. We’ve begun to perceive customers as numbers
rather than people.
It’s a phenomenon that’s been encouraged by venture capitalists and businesses.
Businesses have been too focused on growth at the expense of their end users. It’s
like an addiction.38 This approach is expensive and frustrating for both businesses
and customers. No one wants to feel undervalued.
A “growth at all costs” strategy can be short-sighted. Peloton saw short-term expansion
that made for impressive headlines and stock growth, but when its fast rise was
counterbalanced by by-product issues, investors took a step back. Another example is
the discount mobile app Wish, which took a similar approach. Like Peloton, they saw
dazzling short-term growth but weren’t paying attention to the customer experience.
This created a “churn and burn” cycle that eventually caused their revenue to nosedive
64% in the fourth quarter of 2020 and to continue falling every quarter after
that.39
Transactional relationships fail in the long run because they aren’t sustainable.
What’s more, companies that rely on them become especially vulnerable in a recession.
You’ll need to dig deeper to convince consumers or businesses to part with
their limited funds. You need to create a human connection with your customers.
You need to understand them, and they need to understand you.
Business is a lot like marriage. You and your customers give each other something
you and they need or want, but in return, you get something back. And just like any
marriage, this relationship needs some work to keep it going.
Relationships are built on trust, which, in turn, is built on authenticity and openness.
Trust builds between you when you’re honest about who you are, who your customers
are, and what matters most to both parties. If your prospects don’t trust you, they won’t buy from you. And if you don’t understand
what makes your customers tick, how can you possibly know what to offer them?
As we stare down the barrel of another recession, it’s time to think critically about who you are as a business, what you offer, and how you communicate that to your
customers.

ACTION: Establish a Continual Feedback Loop

Most businesses treat customer communication like a one-way street. They blast
out their messages through marketing without taking the time to truly listen. They
may make it difficult for customers to contact them or may rely too heavily on data
analytics without talking to the people in question.
If you’re sincere about building trust with your existing client base (and you should
be), it’s important to establish a continual feedback loop. Continually ask your customers
questions about your business, their experience, and themselves, and act on
their answers.
Make it easy for customers to provide feedback. Explore tools like online chat boxes
and surveys, or keep it simple with a phone line. However you do it, be sure it’s easy
to continuously hear from your customers. Invite them to tell you what they love
and don’t.
The most successful businesses create a customer council, a strategic advisory board
comprised of their top customers. This enables you to understand what they value
and use their insights to bring in other loyal customers. It will allow you to understand
your customers’ wants, needs, and desires like never before. What are their goals?
What purpose drives them? How can you align your business with these things?
You need a customer council to succeed in tough times.40 Combine your research
with this customer feedback and act on it. Now.

Step #6: Give Your Customers a Better Journey

A recession is a perfect time to rethink your communication with your consumers.
Are your communications leading with your purpose? Are you being clear about
your goals and actions? Do you need to get reacquainted with your best customers?
The customer experience matters. According to research by PWC, at least one in
three customers will walk away from a brand, even if they love it, after just one bad
experience. And more than half of all US consumers (54%) think most companies
need to do better.41
As you might expect, getting this right pays big dividends. In fact, 86% of buyers are
willing to pay more for a great customer experience. The more expensive the item,
the more they are willing to pay. Great customer interactions enable companies to
increase their charges by as much as 18%. They enjoy stronger loyalty, and their customers
are significantly more likely to share personal information.42
So, what makes a great customer experience? Based on our research, some key
things that customers value are:
◆ Intelligence — Intelligent customer experiences are as streamlined as possible,
eliminating redundant steps.43 The more integrated the different parts of your
company are, the more likely you’ll be able to provide this type of interaction.
◆ Consistency — Unified branding and messaging make your identity clear and
easier for customers to buy from you. The simple message here is: don’t
confuse the buyer by sending different messages on different channels.
◆ Personalization — 49% of buyers say they’ve made impulse purchases after a
more personalized customer experience, and 44% become repeat buyers after
they’ve had one.44
◆ Human interaction — Chatbots powered by artificial intelligence may be all the
rage, but 82% of US customers and 74% in other countries still prefer to deal
with real people.

ACTION: Double Down on Your Existing Customer Base

Your existing customers already believe in what you do. Now is the perfect time to
reinforce that relationship. As you examine your buyer journey and reposition yourself
as a purpose-driven company, you may realize that you’ve lost your way in the
past. The result may be a sense of lost trust amongst your customers.
Rebuild lost trust and spend time on the people who already support you.
As the old saying goes, finding a new customer is more expensive than keeping an
existing one. Spend your time and money wisely and invest in your established customer
base. Not only will you reengage clients, but you may also grow their customer
lifetime value and encourage good old-fashioned word-of-mouth marketing.
Take time to review the customer journey. Focus on the entire journey, not just individual
experiences. Are your company’s parts working seamlessly together to communicate
a consistent message, or is it segmented into “silos” that don’t interact
with one another? Are your objectives clear? If not, use this downtime to refine
them and ensure they work harder for you. Offer your customers a user experience
that aligns with your purpose.
If your existing systems are too complex, not personalized enough, or riddled with
bugs, now is the time to start afresh. Map out your entire customer journey from
start to finish. How do they first become aware of your business? Who are they before
they even know they need what you provide? What competitors are they considering?
What deciding factors lead them to choose you? Why do your repeat customers
keep coming back?
Try to create a journey that makes it easy for customers. Identify areas for improvement
and implement changes now so you’re set up for success.
It’s also important to show your appreciation to your loyal customers. These are the
folks who buy from you because they believe in you. It runs deeper than simply liking
your products or valuing your services. A loyal customer will give you the benefit
of the doubt in hard times and will continue to support you, even when it’s tough.

You’ll need to rely on your loyal customer base during a recession. Capitalize on this
strong connection and start to show your appreciation now. This can mean many
things. Maybe it’s time to develop a new offering that meets their needs. Or perhaps
it’s time to launch a loyalty rewards program?
Take the time to find out what’s best for you and your customers and implement it
ahead of, or even during, the recession.

Step #7: Invest More in Marketing… and Steal Market Share.

Market share is the percentage of the total market a business controls for its products
and services. The bigger your market share, the better your chance of profitability
and success.
Think about it, what’s the first search engine you use when you need to look something
up online? That sense of complete dominance is what it means to have a huge
market share.
A recession is a perfect time to steal market share. Shifts in the market mean there’s
less competition, and often, customers need a new source for their products and
services.
In the last recession, companies that invested in marketing stole market share. The
logic is simple: almost everyone will pull back on their expenses, so if you do the opposite,
you’ll reach a wider audience for much less.
You’ll no longer need to cut through the noise to be seen. Just be present, and you’ll
reach new eyeballs.
In a quiet market, frequent and consistent marketing efforts can gain huge levels of
attention quickly. Your marketing is equally a good way to build loyalty with existing
customers by reminding them of your value. The best approach is a multichannel
one that targets both new and returning customers.
The results are proven. As Intel did in 2008, an investment in your marketing is a
surefire way to steal major market share. Amid the worst recession in decades, Intel
invested over $7 billion into marketing and R&D. Their goal was to steal market share
from struggling competitors and to develop new technologies they believed would
be an important part of the overall recovery. The result was a 13.81% return on investment
in 200946 and an entire percentage point increase in market share.47
There are also compelling signs that some of the world’s most successful companies
are taking this long view defensively to stay on top. Take Amazon, for example.
In 2022, the ultimate online retailer saw sales rise just 9%, the slowest growth in the
company’s history. They could easily have responded by cutting back on marketing, but they didn’t. Instead, they increased advertising and promotional spending by
22% to $20.6 billion, setting a record for annual spending by any marketer.48
But don’t let these big names dissuade a smaller company from a similar investment.
Companies that increase their spending achieve success. An Analytic Partners Report noted that 60% of companies that increased their media spend in the last recession saw greater ROI, and those that spent more on paid advertising saw a 17% increase in incremental sales.

ACTION: Invest MORE in Marketing

This one is pretty simple. If you’re serious about growing your business, allocate
more to marketing efforts. Amazon’s example of 22% is a good benchmark. Consider
investing at least 20% more in your own marketing efforts.
If you’re spooked by tough economic times, remember this: every recession eventually
comes to an end. If you’re acquiring customers during lean times when your rivals
are cutting back, you’ll be stronger when the dust settles.

Step #8: Toot Your Horn

During a downturn, companies that are challenged often go quiet. That’s a bad
strategy. According to Bain & Company, companies that cut spending on key marketing
activities became sinking ships after the last recession.50 Conversely, those
that spent strategically could take advantage of the opportunities provided by the
unique times. In fact, 47% more rising star businesses are typically founded during
a recession than in times of growth.51
Simply put, the impending downturn offers a golden opportunity to invest strategically
and get your message out there. Downtimes are when companies and pundits
are looking for standouts to act as poster children for success and stability. These
stories offer hope and inspiration during uncertain times.
In 2008, Inc. ran an article profiling 17 recession success stories throughout history.
52 They tapped into a cultural phenomenon; people want to hear stories of success
in difficult times.

ACTION: Be Vocal

Tell your success story during the recession, and you can expect to be noticed. Media
and consumers alike will be drawn to your confidence, even before you have
results. In the end, you’ll attract customers and coverage simply by tooting your
horn. “Increasing consumer confidence increases consumer spending.”53
However, not only customers will be drawn to your confidence but also investors.
Investors are more willing to accept risk based on their understanding of market fluctuations.
In fact, their appetite for risk is the basis of their confidence. When an investor is
confident in a stock’s success, they’ll invest despite the high risks that may be involved.54
If you can provide that confidence to investors despite the current state of the market,
you’ll find yourself attracting more investment than you ever imagined.
When PayPal was founded in the late 1990s, it seemed like a crazy idea. The world
was still recovering from the dotcom bust, and yet its founders felt it was the perfect time to launch an online money transfer service. Despite media backlash, they were
incredibly confident about the future of their business. By tooting its horn in difficult
times, PayPal gained brand awareness that helped it achieve its vision. Only
four years later, PayPal was sold for $1.5 billion.55
Let this be a lesson for you. It’s time to start tooting your horn. Begin to believe in
your success, and you will achieve it.

Step #9: Focus on Marketing Results That Matter

Success during a recession is all about small but significant improvements. Regarding
marketing, it’s important to reflect on where you’re missing out on good returns,
but how are you determining what a good return is?
One of marketing’s biggest handicaps is that it often focuses on the key performance
indicators (KPIs) that it values rather than the company values. Are you paying
attention to how much revenue your advertising generates, or are you focused
on “likes,” impressions, and clicks? These metrics are only important if they lead to sales.

ACTION: Align Your KPIs with ROI

Downturns are ideal times to invest in the things that offer a high return on investment.
Focus on KPIs that are of value to your whole business. Stop measuring Facebook
likes and start measuring your social channels’ conversion rates.
Once you’ve identified the right KPIs, you can make informed decisions about where
to invest and where to cut back. Look for ways to tweak your marketing to provide
better returns.
Ensure you have clear KPIs that you can measure your marketing efforts against.
Then, do a deep dive to determine what’s hitting the mark and what’s not. Audit the
channels you’re using and explore different ways to earn market share. Now is the
time to invest in things like search engine optimization to bring in an audience
without an investment.
It’s also the time to closely examine your conversion rates. How many leads turn into
customers? Why aren’t they choosing you? Learn quickly and address your missed
opportunities. What is making customers stick around? Find out and use this to create your core messaging.

Measure the cost of your efforts at every stage. Find out your:
◆ cost per lead
◆ cost per conversion or acquisition
◆ average customer lifetime value
Set clear goals for improving these metrics to meet or exceed industry benchmarks.

Step #10: Think Fractionally

The typical effects of downturns are layoffs and drastic cost-cutting. As Investopedia
puts it, recessions “and unemployment go hand in hand and reinforce one another.”
56 That’s because a recession sparks layoffs, which can impact consumer earnings
and spending habits long-term.
The same can be said for cost-cutting. As revenues decline, businesses begin to cut
costs. However, if taken too far, this over-cutting can cripple “the company’s ability
to grow in the future.”57
A more nuanced, “f ractional” approach is best for business.

ACTION: Shave Costs Instead of Cutting Them

Approaching costs with a fractional mindset offers a flexible way of thinking during
lean times. It can empower you to spend money when there are opportunities for
growth, even as you reduce expenses in other areas.
It’s also important to focus on the essentials. As we’ve already discussed, there are
ways to measure your ROI effectively and areas of marketing that have better longterm
effects. Focus on these essential areas of marketing and shave spending on
non-essentials.
This also applies to your business expenses. Invest in people who are essential to
your business. Marketing and sales staff can be costly but invaluable to the future
success of your business.
If employing staff full-time is a challenge, consider fractional employees. A mix of employees
and outsourced staff can keep costs low while maintaining high-quality work.
Outsourcing during a recession can provide a higher value per dollar, reduce burnout
among existing employees, save money, and enable more flexible resourcing.

Bonus Action: Even Your CMO can be Fractional

It’s not always easy to rethink your business. If you’re feeling stuck or overwhelmed
by the options the coming downturn presents, it may be time to consider hiring a
fractional CMO. An outside expert can help you turn your business around just in
time for the recession.
Ask yourself these questions:
1. Is your purpose clear?
2. Is your marketing aligned with your purpose?
3. Do you know who your top customers are? If so, are you collecting their
feedback regularly?
4. Is your customer journey clear? Do you know how it could be improved?
5. Are your customers repeat buyers? If not, do you know why not?
6. Do you know who your competitors are? Do you understand what they’re
doing differently?
7. How are you proving your value to your customers?
8. Do you have a clear multichannel approach?
9. Do you know how you’re engaging repeat customers?
10. Are you getting good ROI on your marketing?
If you don’t have solid answers to all these questions, it may be time to hire a fractional
CMO.
A fractional CMO is a chief marketing officer who works as a part-time consultant.
You get the marketing strategy you need to succeed and expert management of
your marketing team on an as-needed basis at a fraction of the cost of a full-time
position.
This can be crucial if your business needs to scale quickly but doesn’t have the capacity
to hire a full-time CMO. It can also be valuable if you simply want to benefit from an outside perspective. As a specialist working with various companies at different
stages and a range of industries, a fractional CMO can provide levels of knowhow
and perspective that, typically, no in-house person can offer.
By working with a fractional CMO ahead of a recession, you can do all the above and incorporate these superpowers into your business.

Final Message f rom Stuart McFaul:
Your Best Next Steps? Let Me Help You Win… Recession or No Recession

A recession doesn’t have to mean a downturn for your business; many of our best
successes (like those you read about in this ebook) occurred during economic downturns.
Even in the most challenging times, I’ve been able to help companies tap into
their purpose and achieve incredible things they never dreamed possible.
Your next steps are simple: let me be your fractional CMO or consult with your team
to achieve your goals.

1. Want more insight into how I think and approach things?

Head to my
website at StuartMcFaul.com to learn more and read other case studies and
success stories.

2. Want to talk about how I can specifically help you?

Then let’s talk. My
contact information is below.
Let me help you tap into your superpowers to meet your full potential. And then
together, let’s make you fly.

Stuart McFaul
February 2023
www.StuartMcFaul.com
+1 (415) 869-8579
[email protected]