Episode 933: How to market your way through the crisis [Part 1], with Stephen Woessner
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Good Morning Onward Nation \\u2013 I\\u2019m Stephen Woessner, CEO of Predictive ROI and your host. Thanks for coming back \\u2013 and if you\\u2019re new to Onward Nation \\u2013 please know \\u2013 I greatly appreciate your time and it\\u2019s wonderful to have you here.
Today\\u2019s episode is going to be a solocast \\u2013 just you and me exploring a topic with some real depth.
And sort of a house-keeping heads up \\u2013 this may very well be one of the longest solocast I\\u2019ve ever recorded \\u2013 if not the longest. In fact \\u2013 during one of the morning kick-start meetings with my Predictive team this week \\u2013 I shared with them that I felt like I was back at the university getting ready to teach a half-day session on campus.
For the last several days \\u2014 I\\u2019ve been writing on my whiteboards\\u2026erasing\\u2026starting over\\u2026scouring through literally 400 pages of research reports\\u2026and then refining my thoughts.
This will be a long one \\u2013 but my hope is that when you and I are finished walking through it \\u2013 you\\u2019ll feel it was well worth your time.
As I considered topics that would be helpful to you and your team \\u2014 I thought about the daily phone calls I\\u2019ve had over the last several weeks with business owners\\u2026or the emails I have received from owners within our Onward Nation community\\u2026business owners just like you\\u2026who wanted some help brainstorm strategies, or to have an opportunity to get a sanity check on the next steps they were considering, or to help them talk through decisions they were thinking about making within their business.
Here\\u2019s the reality, Onward Nation \\u2013 without question \\u2013 we\\u2019re facing new and historic challenges
But \\u2013 even though sometimes the challenges may seem insurmountable \\u2013 I\\u2019m telling you \\u2013 they aren\\u2019t.
I get it \\u2014 none of us have ever had to deal with something\\xa0exactly\\xa0like COVID-19 before \\u2013 but \\u2013 we have certainly worked through and navigated some very major crises before\\u2026and we survived through it all.
Look \\u2013 you know that I\\u2019m not a rah-rah, blow inspiration your way in order to make you feel better kind of person. I like data. I like examples. I like research. I like proven methods.
So I built the content of this episode from the ground up to be a resource that you and your team can use to market \\u2013\\xa0yes, market\\xa0\\u2013 your way through the crisis.
I\\u2019m going to share some big golden nuggets from the research that I have curated from a variety of sources \\u2013 and special thanks to Drew McLellan and Susan Baier for helping me knit the data points together.
I\\u2019m grateful for how you always generously share your smarts.
So that\\u2019s what you and I are going to talk through today \\u2013 how you and your team can proactively market your business through this crisis \\u2013 and at the same time \\u2013 get through to the other side in a healthy position and ready for the rebound in the economy.
Make no mistake. It is not a quick fix. It isn\\u2019t easy. It will take hard work. And it may require that you make some difficult decisions. But \\u2014 if you do all we talk about in this solocast\\u2026you will not only put your business in a position to make it through to the other side\\u2026but you will have also future-proofed your business for when the next crisis, challenge, or recession lands on our doorsteps.
Okay \\u2013 so that\\u2019s the plan for today. Deal?
But \\u2013 before we dive into all of that\\u2026I feel like I\\u2019d be remiss if we didn\\u2019t squarely address the emotional side of what we\\u2026as owners\\u2026are dealing with right now.
I hope you\\u2019ll forgive me here \\u2013 because the next several minutes might sound like venting\\u2026because I kind of am\\u2026but my guess is\\u2026you might take this opportunity to vent right alongside me as I share this.
Candidly \\u2014 part of what drove me to do the research, to write, and record this solocast was my own anger \\u2014 my own frustration, my disappointment, and my sadness around what is happening right now.
I will tell you \\u2014 there have been some days where I\\u2019ve felt bruised, battered, bewildered, and quite frankly\\u2026exhausted. My lens through which I normally view the world is to always look for the silver lining \\u2013 and there are indeed silver linings with today\\u2019s crisis \\u2013 but I admit\\u2026it\\u2019s taken me longer than normal to see them.
These are some big emotions so I wanted to tackle each of them in front of you because I know many of you have felt the same. You\\u2019ve shared that with me in our calls and emails.
Or \\u2013 maybe you\\u2019re wrestling with or feeling something entirely different. Either way \\u2013 maybe we\\u2019ll find some common ground here together.
I\\u2019m going to start with sadness.
I\\u2019m so sad for all of the families here in the United States and abroad that have had to say goodbye to a loved one, way too soon, because of COVID. I have several at-risk family members and friends \\u2014 as I\\u2019m sure you do, too \\u2014 and we\\u2019d be devastated if we were to lose any of them\\u2026ever.
My heart is also broken for business owners who have had to shut down\\u2026who are now questioning the livelihoods and the livelihoods of their employees. And to make matters worse \\u2014 many owners played by all the rules when seeking financial assistance\\u2026and yet\\u2026they were left out in the cold.
How could this possibly happen?
And \\u2014 I\\u2019m embarrassed to admit\\u2026when I think about my feelings of sadness\\u2026they quickly transition to anger and frustration.
Even as I thought through and then wrote out what I wanted to share with you today \\u2014 I felt my eyes welling up as I reflected on my sadness and then I heard my fingers pounding on my keyboard harder and harder because my level of tension grew.
I\\u2019m angry and frustrated when I hear of instances where our courageous healthcare workers and first responders who were asked to run toward the fight\\u2026yet had to do it at great personal risk because they didn\\u2019t have the gear they needed. And yet \\u2013 our brave men and women didn\\u2019t stop \\u2014 they did their duty because we all needed them to.
Or \\u2013 I feel myself get angry when I hear politicians on both sides of the aisle and bureaucrats seemingly make decisions with their own best interests in mind and not their constituents. With the end result being that many small business owners were left out of the original stimulus \\u2013 and have been forced to dangle in the wind and hope they get the assistance they desperately need \\u2014 because someone, somewhere, was playing favorites.
Yet through it all \\u2014 as I talk with business owners, Onward Nation \\u2013 as I\\u2019m hearing similar emotions felt \\u2014 I will tell you what I\\u2019m NOT hearing\\u2026and that\\u2019s the word QUIT.
Out of all of those calls \\u2014 and all of the emails I have received \\u2014 literally \\u2014 not one person has said to me that they had decided to throw in the towel and quit. Not a single person. And that is one of the many reasons why I love business owners as much as I do.
You\\u2019re some of the most tenacious, generous, and committed people I know. You give, you sacrifice, and you lend support wherever you can. I love that about you.
So when the roles are reversed and support is promised to you\\u2026and you\\u2019re told by a big box bank that they\\u2019ll be there for you\\u2026and then we come to find out that that was never their intention\\u2026you bet, Onward Nation\\u2026that makes me really, really angry.
I\\u2019m angry for every business owner who was given a promise and then that promise was broken. Yes, I get it\\u2026life isn\\u2019t fair but I was hoping that during this crisis we would have demonstrated that we learned some important lessons from the mistakes of the past.
I\\u2019m frustrated that the answers and next steps for business owners have been few and far between.
So \\u2013 I built this solocast as a way to provide a roadmap for where we as owners can and should go next in the coming weeks. What can we do to rebuild \\u2014 and if we work hard at it \\u2014 could it be possible to come out of this crisis in a better position than when we went in?
And that\\u2019s is what drove me to do the research. To look back through past recessions, past recoveries\\u2026to study the winners and the losers\\u2026and to share with you what they did\\u2026so we can all take some lessons out of their playbooks and put them to work right now.
I\\u2019m going to give you the data points and examples to show it\\u2019s possible. And \\u2014 I\\u2019m going to share the next steps that you and your team can take and apply.
Okay \\u2014 two final housekeeping items before we dive in.
First \\u2014 thanks for listening to me vent \\u2014 and I hope you were able to blow off a little steam in the process, too. We all need to give ourselves the grace of being able to do that from time-to-time. Yes, our teams deserve the best leadership and direction we can provide. But \\u2014 you\\u2019re also human \\u2014 you\\u2019re not a rock and sometimes we need to remind ourselves that it\\u2019s okay to take a step back and to honor the fact that this is an emotional time\\u2026even if that\\u2019s for 5 minutes. So thank you for giving me that grace just now, Onward Nation.
Second \\u2014 all of the citation and references sources that I have included can be found in the endnotes section of today\\u2019s show notes on\\xa0PredictiveROI.com.
And third \\u2014 as I mapped out all of this content on my whiteboards and worked through the written drafts \\u2014 holy bananas \\u2014 I quickly saw that there was no way I could cover everything in the level of detail necessary within one solocast. It would be too long and too overwhelming.
So today\\u2019s solocast is Part 1 of 2. But by the time you listen to this episode \\u2014 I will have likely finished up Part 2 so we will be airing it very soon.
Stepping through the research\\u2026
Okay, Onward Nation \\u2014 with all that said \\u2014 let\\u2019s start stepping through how to market your way through the crisis.
And we will start off by reviewing three research studies and articles published in the Harvard Business Review. Again all linked within today\\u2019s show notes.
Okay, Onward Nation \\u2014 with all that said \\u2014 let\\u2019s start stepping through how to market your way through the crisis.
And we will start off by reviewing three research studies and articles published in the Harvard Business Review. Again all linked within today\\u2019s show notes.
The first article is entitled \\u201cPreparing your business for a post-pandemic world\\u201d, which was published by HBR on April 10, 2020 and was written by Carsten Lund Pedersen and Thomas Ritter, both professors at the Copenhagen Business School in Denmark.
I decided to pull golden nuggets out of Pedersen and Ritter\\u2019s work and share it with you because of their emphasis on planning before and during a crisis \\u2014 and how if your planning process was sound, Onward Nation \\u2014 that the end-result could be that you will not only survive the current crisis but you will have future-proofed your business so you can survive and thrive future threats.
But in order to prep the proper response plan with smart strategic decisions, you must first understand the position your business holds in the market. You can do that by asking yourself and your team some fundamental questions like, \\u201cwho are we in our market\\u201d, \\u201cwhat role do we play in the market? (Are we price-sensitive suppliers, are we market leaders, do our clients and prospects see us as thought leaders, etc.?).\\u201d And \\u2014 what if we make immediate course corrections\\u2026could we emerge as a market leader fueled by developments, new ideas, service offerings, or new markets that we invest in during the lockdown? [1]
Onward Nation \\u2014 we all know that a plan is a course of action pointing the way to the position you hope to attain. But \\u2014 the right plan should also map out what you need to do today to achieve your objectives tomorrow. And this is where business owners get snagged. Their plans consist of either lofty ideas without any of the tactical detail their team can challenge, make better, and then implement \\u2014 or often times \\u2014 there\\u2019s no plan at all because the business owner relies on winging it. Winging it may work during good economic times \\u2014 but it doesn\\u2019t work during a crisis.
And yes, I think Mike Tyson had a point when he famously said, \\u201cEveryone has a plan until they get punched in the face.\\u201d And that is exactly why when the U.S. Navy Seals create a mission plan along with 13 contingencies for each mission they execute. They recognize that there will be ebb and flow to the mission plan as the situation evolves and changes with new data points, variables difficult to predict, or sudden changes. But if they didn\\u2019t have a plan \\u2013 they wouldn\\u2019t know what gear to take, how much gear, transportation, extraction, and the litany of other things that need to be considered.
And yet \\u2013 I know many business owners who bristle at planning because they don\\u2019t want to feel boxed in or the constraint on flexibility. The Seals would tell you that it is because of the intensity of their planning process that they can be more flexible on the battlefield because they have already anticipated their options \\u2013 and \\u2013 have everything they need to proceed with a new direction.
Here\\u2019s the reality \\u2014 and I think the authors of the article were spot on when they wrote, \\u201cthe lack of a plan only exacerbates disorientation in an already confusing situation.\\u201d[2]
Yes, this crisis is confusing. It\\u2019s stressful. And there have been times when working with my leadership team at Predictive when I felt overwhelmed and just wanted to start doing things to see if anything would stick. But \\u2014 we didn\\u2019t until we had a plan. I encourage you to take a step back\\u2026have discipline\\u2026look around\\u2026ask yourself and your team questions\\u2026look at today\\u2026this week\\u2026this month\\u2026and map out in writing the steps you intend to take quickly for both the short-term \\u2014 and \\u2014 identify how those steps will set your business up for success in 12-months as it relates to your 3-year mission.
In addition to the planning process that you and your fellow leaders within your business need to be working through \\u2014 you also need to communicate the plan as well as the process to create the plan \\u2014 with your entire team. If you or your leadership team works through the planning process in a vacuum and doesn\\u2019t share highlights, milestones, or progress as the plan is evolving \\u2014 I\\u2019m telling you \\u2014 your team will feel lost and your culture will suffer.
Your team is just as confused, scared, and concerned as you are. And many of them might be super scared and concerned for you \\u2013 way more so than their own job security. So \\u2014 I\\u2019m not suggesting that your entire team needs to be involved in the creation of the core plan.
But what I am suggesting is that you take a lesson out of the book, \\u201cExtreme Ownership\\u201d where you and your leadership team create the core plan \\u2014 brief your entire team on the objectives and intent of the plan \\u2014 and then ask junior members of your team to meet and work out the tactical details for implementing the plan.[3]
Your job is to make sure you are clear on the objectives and the intent of the plan. Then set your expectations for the timing for the completion of the plan \\u2014 quickly\\u2026like 24- to 48-hours \\u2014 and have each of the junior team members present their portion of the plan back to you and your leadership team. Then everyone asks questions and in doing so \\u2013 does some stress testing of the plan. It\\u2019s crucial to create space for the plan to evolve but that doesn\\u2019t mean your planning process needs to take weeks. It can be days and you will be off and running.
I assure you \\u2014 your greatest challenge during the planning process will be to prioritize. You need to be careful that you don\\u2019t start numerous projects that all depend on the same critical resources. If you do \\u2014 you will burn out your team and nothing will get done with excellence. Instead \\u2014 take your five, six, or 10 great ideas\\u2026apply pressure to them\\u2026and distill them down to one to two great ideas with clear steps for the next 30-days. And then keep a list of all of the other ideas and come back to it in 30-days and re-evaluate what should be next.
Okay \\u2014 before we move on to another ingredient in the planning process \\u2013 I want to give you a warning so you don\\u2019t fall into a mental trap. I learned this lesson during my mentorship with Darren Hardy, former publisher of SUCCESS Magazine when he was on our board of advisors at Predictive. And one day he shared some marketing strategies and tactics with me\\u2026and candidly\\u2026while he was sharing them with me\\u2026I was arrogantly thinking to myself,\\xa0\\u201cYes, good ideas, Darren but I\\u2019ve heard these before.\\u201d\\xa0And then came the two-part question from Darren.
\\u201cStephen \\u2013 you may have heard these ideas before but\\u2026\\u201d
Question 1: Are you doing them?
And as soon as he asked me the question \\u2013 I immediately felt embarrassed. When he was sharing the ideas \\u2013 I was affirming my own smarts in my head because I wanted to show myself that I had similar ideas to Darren. When instead I should have been thinking\\u2026\\xa0\\u201cYes, I have heard this before\\u2026and why aren\\u2019t we doing this?\\u201d\\xa0So his challenge landed exactly the way he wanted it to land.
And then the second question\\u2026
Question #2: If you are doing it\\u2026can you do it better, greater, with more excellence?
So \\u2013 if you\\u2019re already planning\\u2026rock solid awesome. I commend you because most business owners aren\\u2019t planning right now \\u2014 they are reacting without a plan, which is dangerous because it forces them to aimlessly wandering through the wilderness while trying to wing it.
So my challenge to you is \\u2014 can you take a nugget out of what Pedersen, Ritter, and the Navy Seals do for planning and make your planning process even better?
My guess is\\u2026we all can.
Now let\\u2019s shift our attention to imagination \\u2014 because we need it now more than ever.
Martin Reeves and Jack Fuller, both part of the Boston Consulting Group\\u2019s Henderson Institute, wrote a brilliant article entitled,\\xa0\\u201cWe Need Imagination Now More Than Ever\\u201d\\xa0which was published by the Harvard Business Review on April 10, 2020. A link to the full text of the article can be found in the endnotes section of today\\u2019s show notes.
Reeves and Fuller put forth the argument that imagination \\u2014 in the face of uncertainty, economic crisis, and the historic challenges we are facing right now as a nation/world \\u2014 is exactly what we need to solve the problem. But it is difficult to apply imagination and all of its benefits when we are in full-on crisis management mode.
Why? Because when something unexpected and significant happens our first instinct is to defend against it. Then we later move to understand and manage whatever caused the crisis so we can get back to the status quo.
But we may not be able to return to our familiar pre-crisis reality. Onward Nation \\u2013 no one knows for sure of course \\u2013 but if I had to guess \\u2013 I\\u2019d predict that COVID-19 is going to permanently change attitudes, needs, behaviors, and industries.
The authors believe \\u2013 and I agree \\u2013 \\u201cthat your capacity to imagine\\u2026to create, to evolve, and to pursue ideas \\u2014 is a crucial factor in seizing and creating new opportunities, and finding new paths to growth.\\u201d[4]
But the challenge is \\u2014 and my guess is when I impressed upon you the importance of planning a few minutes ago \\u2014 you felt the pressure to act and may have said to yourself \\u201cStephen\\u2026there\\u2019s no time for planning \\u2013 I need to take action now.\\u201d Same thing with imagination \\u2014 because of the pressure of COVID-19 \\u2014 it will be one of the hardest things to keep alive within your business right now.
However \\u2014 imagination \\u2014 re-thinking how you can double down in being helpful to your clients and prospects right now is exactly what can help your business survive this recession.
For example \\u2014 in recessions and downturns, 14 percent of companies outperform both historically and competitively because they invested in new growth areas. Apple released its first iPod in 2001 \\u2014 the same year the U.S. economy experienced a recession that contributed to a 33 percent drop in Apple\\u2019s total revenue. Still \\u2013 Apple saw the iPod\\u2019s ability to transform its product portfolio so the company increased R&D spending by double digits, which sparked an era of high growth for the company.[5]
Later in today\\u2019s solocast \\u2014 I will share with you some data points from a special coronavirus report from Edelman, which shows that what your clients and prospects want from you right now is to be helpful. Share, communicate, educate, teach, and be supportive. Onward Nation \\u2014 you cannot do any of those things at a high level, with excellence, by reacting\\u2026by winging it\\u2026without a plan\\u2026and with no imagination.
The authors also surveyed more than 250 multi-national companies to understand what leaders were doing to manage the COVID-19 epidemic and its impact on their businesses. Interestingly, only a small number of companies are at a stage where they\\u2019re identifying and sharing strategic opportunities. I suppose this shouldn\\u2019t be surprising since big companies take longer to pivot than what our teams within our small businesses can do. But it also paints a picture of opportunity, too, doesn\\u2019t it?
If you can rally your teams \\u2014 create an imaginative plan that everyone buys into because they had a hand in building it \\u2014 you will likely be way of ahead of your competitors.
And yes I get it \\u2013 you likely don\\u2019t own a multi-national company and you don\\u2019t have an R&D budget like Apple did back in 2001. But think of it this way \\u2013 if multi-national companies that have budgets capable of doubling down on R&D \\u2013 yet aren\\u2019t because they are in reactive mode \\u2013 just think of the possibilities if you could actual reimage what\\u2019s next for you in your industry.
You might be the only one serving your niche that is actually thinking about how best to double down on being helpful. The rest of your industry might be thinking about that next promotional push\\u2026something\\u2026anything in order to get in a few dollars to survive. But you can imagine a completely different path. One that shares your smarts, your insights, the best of what you have in a generous way while everyone else is reacting and frozen.
You may have a blue ocean of possibilities in front of you if you can take the time to imagine all that can be.
But how do you do that? Let me help by giving you a push from the authors. Instead of asking yourself and your team passive questions like \\u201cWhat will happen to us during this crisis?\\u201d \\u2014 flip the script \\u2014 by asking active, open questions like \\u201cHow can we create new options?\\u201d
Or \\u2014 \\u201cHow can we double down and be even more helpful to our clients and prospects during this crisis?\\u201d
What could we teach?
What research could we share?
What online event, webinar, or forum could we host for our audience that would share the best of what we\\u2019ve got to help them navigate what\\u2019s next?
I know \\u2014 there are no easy solutions. And my Predictive team and I have wrestled through many options when we were building out our 30-day Priorities. Rest assured \\u2014 we have worked through everything I\\u2019m recommending to you\\u2026I have seen it in action. But through it all \\u2013 in order for this to work for you \\u2013 you need to be open to new possibilities and not constrict the funnel.
Okay \\u2013 the last nugget I want to share with you was a game-changer for me. I have been a student of mindset, attraction theory, and the power of the mastermind for years. I am a firm believer in that which we focus on we get more of. Perseverating over negative thoughts produces negative results and I have seen the reverse happen, too. And when blended with a great plan, intentional execution, and hard work \\u2013 that within the plan becomes reality.
But what I learned from this article and wanted to share with you is how this actually plays out in the world of statistics, too.
For example \\u2014 \\u201cwhen we lose hope and adopt a passive mindset, we cease to believe that we can meet our ideals or fix our problems. In statistics, Bayesian learning involves taking a belief about a statistical distribution \\u2013 prior results \\u2013 and updating it in the light of each new piece of information obtained. The outcome of the entire process can be determined by the initial belief. Pessimism can become a self-fulfilling prophecy.\\u201d[6]
So \\u2013 if you focus on being imaginative, being open to the possibilities, giving your team grounds for hope, encouraging them to be innovative\\u2026and all of this is done with the intent of being helpful to your clients and prospects in a way you never have been before\\u2026you will make progress. Meanwhile \\u2013 your competitors will be bogged down in the thickness of things and trapped in a short-term survival mentality that requires them to TAKE from their clients and prospects\\u2026and it won\\u2019t work.
Onward Nation \\u2013 as a leader in your business \\u2013 ask yourself whether you are giving people grounds for hope, imagination, and innovation, or whether you are using pessimistic or fatalistic language, which could create a downward spiral in organizational creativity. Dealing with real risks involves taking imaginative risks, which requires hope.[7]
Trust me when I say that the trench you are fighting in every day \\u2013 that trench of pressure, doubt, fear, anxiety, and at times\\u2026overwhelm\\u2026yes, I know that trench well, too. And I\\u2019m right there with you\\u2026slugging it out, too\\u2026and working hard.
But one thing I\\u2019m grateful for is that we quickly built a plan at Predictive, we prioritized, we mapped out how we could be helpful to clients and prospects\\u2026and we did all of that from the spirit of imagination\\u2026and then we shared it with our team. Now \\u2013 taking you behind the curtain in full transparency\\u2026we did all of that in 48-hours. This is not a 4-6 week process. Don\\u2019t get bogged down\\u2026get moving.
Let\\u2019s keep up the momentum of the planning process and begin to think about how you should deal with the myriad of business pressures right now. Do you cut operating costs, do you furlough employees, do you work to open new markets and invest in R&D, or some other combination of strategies? And \\u2013 is there an ideal combination or blend of the strategies \\u2013 and if so \\u2013 what have been the result outcomes from other companies as they worked to navigate past crises.
Thankfully \\u2013 there is some excellent research available on all of the above. With that said \\u2013 it might seem a bit odd that I am going to now turn our attention toward an article / published study in the Harvard Business Review from 2010. Why would I pull from an article that is 10-years old?
The article is entitled,\\xa0\\u201cRoaring Out of Recession\\u201d\\xa0and was published in HBR on March 3, 2010. I\\u2019m recommending you and your team study it because the data points within the article provide a whole lot of context that matters during today\\u2019s crisis.
Back in 2010 of course \\u2013 the country was looking for any and all help in pulling itself out of the Great Recession of 2008 and 2009. But in order to make smart recommendations to their 2010 readers \\u2013 the authors went back and gathered data from the past three global recessions: the 1980 crisis (which lasted from 1980 to 1982), the 1990 slowdown (1990 to 1991) and the 2000 bust (2000 to 2002). They studied 4,700 public companies, breaking down the data into three periods: the three years before a recession, the three years after, and the recession years themselves.[8] It took the researchers over 12-months to complete the research project and they focused on publicly traded companies because of the availability and access to data.
At the high level \\u2014 and I will slice the big nuggets apart in just a minute \\u2014 but as a business owner this data is helpful because right now you are in the heat of battle. You are a battlefield general. You\\u2019re commanding your troops\\u2026you\\u2019re asking for the best intel\\u2026and you and your fellow leaders are trying to react and respond. But without taking the time to plan\\u2026to imagine\\u2026to think about long-term positioning\\u2026I assure you\\u2026you will be busy tackling short term priorities and your outlook on the future will continue to be obscured by the fog of war.
Here are some of the highlights\\u2026
Seventeen percent of the companies in the study didn\\u2019t survive the recession.
About 80 percent of 4,700 companies in the study (3,760 companies) had not yet regained their pre-recession growth rate for sales and profits three years after the recession.
Forty percent of the 4,700 companies (1,880 companies) hadn\\u2019t even returned to their prerecession sales and profits levels by the end of the three years post-recession.
So for the majority of the companies \\u2013 the financial impact of the recession were long lasting.
Only nine percent of companies flourished after a slowdown, doing better on key financial parameters than they had before and outperforming rivals in their industry by at least 10 percent in terms of sales and profits growth.
Interestingly \\u2014 companies that cut costs faster and deeper than their competitors didn\\u2019t necessarily flourish. In fact \\u2013 these were the companies in the study with the lowest probability \\u2014 21 percent \\u2014 of pulling ahead of their competition when the economy rebounded.
Counter-intuitively \\u2014 the company leaders that decided to double down and boldly invest more than their rivals during a recession also didn\\u2019t fare well. They only enjoyed a 26 percent chance of becoming leaders after a downturn and then into an economic rebound.
And most surprising to me was learning that 85 percent of growth leaders heading into a recession are then toppled because of the crisis. So if you\\u2019re not currently the leader in your niche \\u2013 the current crisis could absolutely be your opportunity if you lead your team correctly over the next several months.
The post-recession winners were companies that mastered the balance between cutting costs to survive today and investing to grow tomorrow. And the proof is in the results with 37 percent of the post-recession winners breaking away from the pack.
\\u201cThe post-recession winners were the companies that cut costs selectively by focusing on increasing operational efficiency \\u2014 meanwhile \\u2014 they invested relatively comprehensively in the future by spending on marketing, R&D, and new assets.\\xa0This is the best antidote to a recession.\\u201d[9]
The researchers called the segment of companies that had taken this strategic approach, \\u201cProgressive.\\u201d
Progressive companies deploy the optimal combination of defense and offense. Conversely \\u2014 the \\u201cprevention-focused companies\\u201d in the study were the ones whose leaders quickly implemented policies that reduced operating costs, shrunk discretionary expenditures, eliminated frills, lowered headcount, and preserved cash. They also postponed making new investments in R&D, developing new businesses, or buying assets such as plants and machinery to expand their capacity. Prevention-focused leaders cut back on almost every item of cost and investment and reduce expenditures significantly more than competitors.
Focusing solely on cost-cutting causes executives and employees to approach every decision through a loss-minimizing lens and pessimism permeates the organization.
Post-recession profits for prevention-focused enterprises typically rose by only $600 million, whereas for progressive companies they increased by an average of $6.6 billion. Prevention-focused companies were the ones that suffered the most during the recession \\u2013 and \\u2013 took the longest to recover. Or \\u2013 never recovered to their pre-recession levels for sales and profit.
So let\\u2019s flip that \\u2014 is doubling down on promotion is the right strategy?
Unfortunately \\u2013 no \\u2013 it\\u2019s not that simple. A focus purely on promotion develops a culture of optimism that led companies to deny the gravity of a crisis for a long time. They ignored early warning signs, such as customer\\u2019s budget cuts, and were steadfast in the belief that as long as they innovate, their sales and profits will continue to rise. They didn\\u2019t notice that because the pie was shrinking, they must capture an even larger share from rivals to keep growing. And this typically leads to intense price competition and a zero-sum game. No one wins in a race to the bottom.
However \\u2014 progressive companies \\u2014 which is where I\\u2019m urging you to begin thinking, Onward Nation \\u2014 they are the companies that cut costs by improving operational efficiency rather than by slashing the number of employees. Only 23 percent of progressive companies cut staff \\u2014 whereas 56% of prevention-focused companies do\\u2014and they lay off fewer people.
And the offensive moves by progressive are even comprehensive. Progression companies develop new business opportunities by making significantly greater investments than their rivals in R&D and marketing, and they invest in expanding their capacity. Progressive companies develop new markets and invest to enlarge their asset bases. They take advantage of depressed prices to buy property, plants, and equipment.
All of that combined is why the post-recession growth in sales and earnings by the progressive lead companies was the best among the 4,700 within the study.
Okay \\u2014 let\\u2019s do a quick recap from what we have covered so far. First \\u2014 by the data \\u2014 you need to have a plan that involves your entire team \\u2013 you cannot afford to wing it through any crisis\\u2026and definitely not this one. Second \\u2014 you need to find ways to stay open to imagination and letting it impact your R&D and how you approach doubling down on being helpful to your clients and prospects. And third \\u2014 if you want your business to make it through the other side of this crisis\\u2026and potentially\\u2026be in an even better position than when you entered it\\u2026now is the time to be progressive. Yes, reduce your operating expenses to boost efficiency\\u2026keep your team intact the best you can\\u2026and make investments in your marketing and R&D.
Let\\u2019s take the ROI around marketing investments a bit deeper with some data points collected from a study commissioned by the Advertising Specialty Institute (ASI).
\\u201cASI studied 2,662 firms from 1970 \\u2013 1991 to determine the effect of marketing on a company during a recession. Firms that marketed during a recession increased in value and got more marketing bang for their investment. In some cases \\u2013 up to three years after the recession had ended. It seems like common sense \\u2013 if you market when everyone else stops marketing \\u2013 your message is more likely to be noticed due to a less cluttered market and your business is more likely to be remembered once your competitors begin marketing again.\\u201d
In my opinion, Onward Nation \\u2014 this crisis is the time for you not to be silent. You need to be in front of your clients, prospects, and audience \\u2014 and yes \\u2014 that is marketing. But \\u2014 this isn\\u2019t the time to be selling. This is the time to be helping. So yes \\u2014 I want you to have a progressive mindset about how to lead your business to the other side of this but I want you to be very thoughtful about the content you and your team create and shares.
This is why I also want to share some highlights from a recent special report from Edelman because the context here will help guide the context of your content.
You can access a full copy of\\xa0the report from the Edelman website\\xa0using the link at the bottom of today\\u2019s show notes.
Edelman is a global communications firm that partners with businesses and organizations to evolve, promote, and protect their brands and reputations. Edelman employs 6,000 people in more than 60 offices. And they have been studying, researching, reporting on the topic of trust for the last 20-years. Their report has become the standard for excellence on the topic.
Edelman just conducted a 12-market study on the critical role brands are expected to play during the coronavirus pandemic, completed on March 26. We interviewed 12,000 people in Brazil, Canada, China, France, Germany, India, Italy, Japan, South Africa, South Korea, the UK, and the U.S. This follows on a study that we released two weeks ago on the role of the private sector during the pandemic.
I\\u2019m going to walk through a high-level overview of the key points\\u2026
If you were ever in doubt that your brand(s) mattered, this new data reveals the power and necessity of brand as well as the urgent need for you to act.
You and your team need to find solutions (think \\u201cimagination\\u201d \\u2013 remember that from earlier in this solocast?) instead of selling passion or image.
Your solutions need to be tangible and fast, not impressionistic and conceptual.
Respondents recognized the need for specific actions to help address the societal challenges posed by COVID-19, from protecting the wellbeing of employees to shifting products, services, and pricing to create a sense of community. This crisis is indeed an opportunity for you to step up in a whole new way to be helpful in your niche.
Sixty-two percent of respondents said that their country won\\u2019t make it through this crisis without businesses playing a critical role in addressing the challenges. At the same time, 71 percent agree that if they perceive that a business is putting profit over people, they will lose trust in that business forever.[10]
So Onward Nation \\u2013 if you\\u2019re not smart about your context ensuring it\\u2019s on-point \\u2013 you could cause more harm than good from your marketing effort.
Businesses must focus their messaging on solutions, not selling.
Eighty-four percent of respondents said they want brand advertising to focus on how brands help people cope with pandemic-related life challenges.[11]
Seventy-seven percent said they want brands only to speak about products and services in ways that show they are aware of the crisis and the impact on people\\u2019s lives.[12]
And Onward Nation \\u2014 the study showed that there\\u2019s a deep desire for expertise. Eighty-four percent of respondents globally said that they want businesses to be a reliable news source that keeps people informed. They want to receive this information from multiple sources, in part because they are skeptical about any individual medium given the epidemic of fake news. The most credible combination is mainstream media plus email.
Taking that further \\u2014 eighty-five percent of respondents want you to be an educator, offering your audience instructional information about the virus and its effects and how to protect yourselves from it.
With the said \\u2014 I\\u2019m suggesting that you play doctor or infectious disease expert. But what I am recommending that you do is pick up the torch and lead the conversations in your niche about the business impact the virus is having on your customers, your vendors, your industry as a whole. And \\u2014 champion the distribution of resources, research, or anything else you think will be helpful to your community of clients and prospects who are desperately seeking answers.
If you\\u2019re on our email list \\u2013 you\\u2019ve likely received updates from me with PPP resources, calculators, applications, etc. Our expertise isn\\u2019t in the public health arena \\u2013 but \\u2013 we absolutely believe we can be helpful to business owners within our community by sharing resources we have curated. And the response from our community has been incredible because we shared the right resources, at the right time, with absolutely no expectation of return.
Helping \\u2013 not selling, Onward Nation.
The team at Edelman believes that this global crisis will fundamentally change how we think, behave, and consume. There will not be a rapid return to normal. And the new world will have trust at its core, with the brand mandate expanded to solve problems for all, protect all, care for all, collaborate with all, and innovate in the public interest.
Business owners that act in the interest of their employees, clients, prospects, and other stakeholders will reinforce their expertise, leadership, and trust and immeasurably strengthen those bonds. Your community is looking to you to share your thought leadership and expertise \\u2013 and you can\\u2019t do that by shrinking or by being quiet. They want you to demonstrate your authority.
Don\\u2019t be promotional \\u2013 be helpful. Don\\u2019t focus on selling \\u2013 but be solutions focused. Double down on sharing your expertise like you never have before. We\\u2019re all faced with economic challenges right now \\u2013 no one is immune \\u2013 and if you can resist the temptation to sell\\u2026I assure you\\u2026creating an authority position will deliver a financial return on your investment.
In an upcoming episode of Onward Nation \\u2014 Susan Baier, founder of\\xa0Audience Audit\\xa0\\u2013 an exceptional research firm and our partner on a recent study on the\\xa0ROI of Thought Leadership\\xa0will join me to walk through the findings with you. I will tell you \\u2013 the results are shocking. Yes, there is an ROI on your thought leadership when done well.
For example\\u2026
When a prospect chooses to work with you and your team instead of a competitor \\u2013 62 percent of the time that choice was made because of whether they consider you to be an authority or not.
Susan and I are preparing an executive summary with some of the biggest findings from the research. It will be available soon. If you\\u2019d like to ensure you receive it when it\\u2019s available \\u2013 go to our Resources Library at PredictiveROI.com/resources and download one of the resources to ensure you\\u2019re on our mailing list \\u2013 or \\u2013 you can also email me directly at\\xa0Stephen@predictiveroi.com\\xa0and I\\u2019ll make sure you get on the distribution list.
Okay \\u2013 let\\u2019s begin to wrap up an come in for a landing by circling back to the Edelman data and then some additional framing about what makes someone an authority.
Onward Nation \\u2014 all of the data points to the fact that we\\u2019ve entered the era of the Authority\\u2026even before COVID-19\\u2026and now even more so as a result of the virus. And while you may be sick of the phrase \\u201cthought leader\\u201d, the truth is there aren\\u2019t that many of them in the niches where you have decided to focus your business. If you haven\\u2019t yet niched down \\u2013 I highly recommend you listen to\\xa0Episode 930\\xa0where Eric Lanel and I talked through the importance of claiming your niche.
But what makes a thought leader a thought leader?
Thought leaders don\\u2019t write content that anyone else could claim. Thought leaders don\\u2019t write about anything and everything. And thought leaders don\\u2019t compete on price. And because of COVID, the data from Edelman, the data from our own ROI of Thought Leadership study, and many other relevant sources \\u2014 I will argue \\u2014 that the ideal time for you to double down on your own thought leadership to build your authority in your niche is now.
Churning out generic content to get ahead in Google rankings may have worked 20 years ago \\u2013 but it doesn\\u2019t work today and it\\u2019s not helpful to your audience.
In our recent book entitled, \\u201cSell with Authority\\u201d, my co-author, Drew McLellan, and I shared highlights from the 2019 Trust Barometer study from Edelman, a global PR agency, which has conducted the study each year for the last 20-years. It\\u2019s a worldwide study with 33,000 consumers participating in 27 countries.
One of the biggest takeaways from the study was that buyers assign a high level of trust to people they believe are just like themselves. When you think about the impact that ratings, reviews, and influencers have with their audiences, you begin to see the power of that belief.
But Edelman\\u2019s research isn\\u2019t about the celebrity influencer. This study documents the rise of the common man influencer \\u2013 business owners just like you and me, Onward Nation. It\\u2019s noteworthy because it gives statistical validity to the idea of real people as influencers and the impact they can have on the beliefs around a brand.
The one attribute that ranked higher than the trust we have in people like you and me is the trust we have in highly educated experts. The only three groups of people we trust more than people like ourselves are company, industry, and academic experts.
Experts are afforded the highest level of confidence and trust\\xa0because they have a depth of knowledge in a specific industry or niche. So why in the world wouldn\\u2019t you capitalize on that? Instead of creating generic content that looks and sounds like everyone else during this crisis \\u2013 take the opportunity to create thought leadership content that is unique, different, and helpful \\u2013 not promotional. Your competitors aren\\u2019t. So you should.
Now more than ever \\u2014 you can own an authority position \\u2013 you can do it \\u2013 and it will help you future proof your business. There has never been a better time in history to start.
The data is all on your side.
The 10 Truths of an Authority
If you were asked to think of an authority on any subject, who would come to mind? What about them designates them as an authority? What\\u2019s true about them? And what does someone have to do to earn and keep the title of authority?
Truth #1: They have a focus area or subject matter expertise.
Truth #2: They don\\u2019t just repeat what everyone else is saying.
Truth #3: They have a public presence where they share their expertise.
Truth #4: They don\\u2019t stray from their area of expertise\\u2014think specialist versus a generalist.
Truth #5: They aren\\u2019t equally attractive to everyone. In fact, they probably bore most people to tears.
Truth #6: They\\u2019re significant\\u2014which is different from prolific\\u2014in terms of content creation.
Truth #7: They don\\u2019t create any generic content that someone with far less knowledge or experience could have just as easily written.
Truth #8: They\\u2019re perceived as an educator in some way.
Truth #9: They have a passion for their subject matter.
Truth #10: They have a strong point of view, which is the foundation of all of their content.
A true authority has something specific to teach us, and they want to be helpful or illuminating. They\\u2019re eager to share what they know because they have a genuine passion for it, and they don\\u2019t fear giving away the recipe to their secret sauce (or so it\\u2019s perceived).
That confidence and generosity are contagious. Their expertise is something specific groups of people (their sweet-spot prospects) are hungry to access. Call them an expert, a thought leader, an authority, a sought-after pundit, advisor, or specialist. They\\u2019re all words for the same thing\\u2014a trusted resource that has earned that trust by demonstrating and generously sharing the depth of their specialized knowledge over and over again.
One way to recognize an authority is the ability to define them in a single sentence, like Simon Sinek. He\\u2019s \\u201cthe why guy.\\u201d Bren\\xe9 Brown is \\u201cthe dare-to-be-vulnerable woman.\\u201d They\\u2019ve so narrowly and so carefully defined their expertise that we can capture it with a word or phrase.
Does Simon Sinek talk about other things? Of course. But he always ties it back to his thing\\u2014the \\u201cwhy.\\u201d
Does Bren\\xe9 Brown write about additional topics? Absolutely. But she always loops it back to being vulnerable and the power that comes from being brave enough to embrace vulnerability.
Beyond that, Drew and I would argue that a true authority has a strong point-of-view or belief that influences how they talk about their subject area. A narrow niche, a strong point-of-view, and being findable in multiple places are the hallmarks of an authority position.
And \\u2014 they have a plan for creating content that is helpful to their niche and not focused on selling. All of the data points to the validity of leveraging your own thought leadership as your core strategy to proactively market your way through the crisis and to make it through to the other side in a stronger position than when all of this happened. You need a plan, with some imagination, some hard work, progressive ideas, and the willingness to invest your time and attention toward execution.
But if you do that \\u2013 and your clients, prospects, and audience can see that you are being helpful and not selling\\u2026when they are ready to enter the market again\\u2026you will have put yourself in the best possible position for a new trajectory of growth.
Your plan \\u2013 will need to address what my team and I call the 6 tenets of how to\\xa0Sell with Authority. And I will cover those in full transparent detail in Part 2 of this solocast series.
Okay \\u2013 whew \\u2013 was that a lot?
Holy bananas \\u2013 it sure felt like a lot.
And remember \\u2014 all of the research sources can be found in the endnotes in today\\u2019s show notes on\\xa0PredictiveROI.com.
As always \\u2014 I look forward to your feedback. The emails you send me \\u2014 and your comments on social media \\u2014 all help us get better every day \\u2014 so thank you for that Onward Nation and keep them coming.
And if you need me \\u2014 you can reach me directly at\\xa0Stephen@predictiveroi.com. Rest assured \\u2014 that\\u2019s my actual Inbox and I read and reply to every email.
Okay, Onward Nation \\u2014 this is the time to double down like no other in history. But \\u2014 be smart about it. Invest in the right areas. Make progressive decisions. And if you do all that \\u2014 you will market your way through this crisis.
I look forward to seeing you on the other side.
Until our next episode \\u2014 onward with gusto!
[1] \\u201cPreparing Your Business for a Post-Pandemic World\\u201d, Carsten Lund Pederson and Thomas Ritter, Harvard Business Review, April 10, 2020.
[2] \\u201cPreparing Your Business for a Post-Pandemic World\\u201d, Carsten Lund Pederson and Thomas Ritter, Harvard Business Review, April 10, 2020.
[3] \\u201cExtreme Ownership\\u201d, Jocko Willink and Leif Babin, St. Martin\\u2019s Press, 2015.
[4] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[5] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[6] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[7] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[8] \\u201cRoaring Out of Recession\\u201d, Ranjay Gulati, Nitin Nohria, Franz Wohlgezogen, Harvard Business Review, March 3, 2010.
[9] \\u201cRoaring Out of Recession\\u201d, Ranjay Gulati, Nitin Nohria, Franz Wohlgezogen, Harvard Business Review, March 3, 2010.
[10] \\u201cTrust Barometer Special Report: Brand Trust and the Coronavirus Pandemic\\u201d, Richard Edelman, Edelman Trust Barometer Special Report, March 30, 2020.
[11] \\u201cTrust Barometer Special Report: Brand Trust and the Coronavirus Pandemic\\u201d, Richard Edelman, Edelman Trust Barometer Special Report, March 30, 2020.
[12] \\u201cTrust Barometer Special Report: Brand Trust and the Coronavirus Pandemic\\u201d, Richard Edelman, Edelman Trust Barometer Special Report, March 30, 2020.
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