To say the past several weeks have been difficult would be an understatement. We’ve watched the spread of a new virus across the globe, putting our healthcare systems, the economy, and our sanity under strain. And while every situation is different, individuals and companies alike are making decisions in the face of an uncertain future.
I don’t claim to be an economist, but as market researchers, our business is about reducing uncertainty so that companies can make smarter decisions. And so, humbly, I’d like to offer some advice:
Listen to your customers.
Your customers may be making important adjustments to their spending and priorities, and segments that were once predictable may behave in new and surprising ways. A Harvard Business Review article written after the 2008 Recession put it this way: “In a recession [demographic or behavioral] segmentations may be less relevant than a psychological segmentation that takes into consideration consumers’ emotional reactions to the economic environment.” Now more than ever, it’s important to understand the impact these changing times will have on your customers and adjust accordingly.
Cut costs wisely – use a scalpel, not an axe.
With so much uncertainty ahead, it’s smart to cut unessential spending. But it can be tempting to cut in the most convenient places rather carefully considering the impacts these choices will have on the long-term success and growth of your business. Companies that balance cost cutting through operational efficiency with smart investments in marketing and R&D fare better than those companies that take a hunker-down approach. These companies are better prepared to gain market share once the economy rebounds.
Which brings me to my final point:
Remember this isn’t forever.
If history has taught us anything, it’s that this is a temporary situation. It’s important to keep looking forward. To me, this feels a lot like the period after the 9-11 terrorist attacks. There was a sudden shock to our country and psyche. Within months, we saw the path forward and started investing in the future again.
For more insights from an innovation veteran, check out these thoughts from our friend and colleague, Mike Tennity with Stage-Gate.