Last week, Sequoia released an article providing guidance for their start-up. In this missive, they compared the COVID-19 outbreak to the most recent recessions. I’m not an expert, but synthesizing the recent advice, the best case scenario is that we’ll see massive absenteeism for a few months in the spring, and another few months in the fall when the next wave of flu season comes around. The worst case scenario is an escalating crisis that will continue to devolve from a health and financial impact perspective.
The truth is, whether it’s a small blip or a big one, a blip it will be. And Marketing, first in budget, then in team, are frequently the first and hardest affected part of an organization. (Except recruiting, you probably have it worse).
Downmarket strategy for the individual contributor
For the individual contributor, the most obvious side effect of a downturn is losing your job. And it gets worse when you evaluate the environment: there will be fewer job openings and greater competition for those openings. The strategy for the marketing IC should be to focus on having as many skills as possible to be the indispensable jaime-of-all-trades on your shrinking team. Investing in those skills and that legacy knowledge will ensure you’re ahead of the game. Most organizations don’t see anyone in marketing as indispensable, even if you alone have the passwords to all the social media accounts.
Navigating a downturn as a marketing leader
As a leader, the strategy needs to navigate more vectors. Most marketing leaders immediately go into either a protective mode, trying to keep everything, or a line item budget cutting. These moments of crisis are where true leaders can set themselves apart. Any marketing leader that create sideration the true goals of the organization. Avoiding panic mode, even when you can see the steamroller headed your way will ensure that you and your company survive difficult times. Start by being hyperfocused on critical revenue-generating activities while having a methodical approach. That steadiness will make you a key asset to leadership. Successfully sharpening your decision making process will result in three critical reactions:
1. Cut costs
In a downturn, regardless if you’re a B2B or B2C, demand for your product will simply decrease. Finding places to optimize or cut demand generation costs, on everything, will be required. Be prepared with if/then scenarios in progressing levels of decline. For instance, if the sales pipeline falls beneath X, then we cut Y costs. Of course, this isn’t so cut and dry in practice, because some of those costs are people. And layoffs are painful for everyone.
2. Maintain existing high-value assets
Whether you have a highly engaged social media audience or the 42-step nurture that ushers customers through their buyers journey, it’s time to think about the run costs for your high-performing assets. Understand where decreasing volume or frequency of a slower customer cycle can help you cut costs. Be very clear about the assets you have invested in, the base level of effort it takes to maintain, and the base level to rebuild or rescale in the future. And whether there an isolated slow down or a systematic slow down, make sure you have the resources to keep the content in sync with your current reality. Moving to flexible contractor resources or deploying monitoring technology to replace expensive labor can keep investments performing in long recessions.
3. Be first to leverage the recovery.
As Sequoia mentioned, market leaders are made in downturns – and so much of that is in navigating the recovery. Marketing leadership needs to be poised to scale quickly and react to the new reality. If you’ve had to lay off the entire field marketing team, how will you on-board new teams and get them up and running while familiarizing themselves with your complex systems, and meaningful marketing assets. If you’ve chosen to release your sales tools or change to less expensive marketing automation platforms for cost, will those tools scale when the market bounces back? Make sure you are balancing cost cutting against the eventual recovery.
Side note on sunk costs
If you think about what it really takes to rebuild, don’t get caught in a cost trap. Anything you spent in the past is a sunk cost. Technology changes so quickly that something that took a year of engineering support and $100,000 to finally build and deploy last year, might be an app on the market today. Like Japan rebuilding after World War II, hard times can be the opportunity to modernize.
Shameless plug
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