The novel coronavirus (COVID-19) is all around us. Offices are closed. Malls are closed. Events have been canceled. Educational institutions are closed. Religious places are closed. In-person social gatherings are not the need of the hour anymore. Everyone is and wants to be isolated for a while. For all of us, these are not good times but it is also the time for us to look back at the history of how the industry has survived and prospered during and after countless recessions of the past.
Here are four things that I’ve personally learned from global economic events of the past and how they could play out in a short or long-term recession possibly ahead of us.
Down economies lead to better customer experience, better social health, and stronger business models
Believe it or not, booming economies end up propping up mediocre companies as growth at times can possibly mask a below-average product or service, bad corporate culture, or marginal customer experience.
In the present scenario, the coronavirus outbreak has shined a light on companies that had a lack of supply chain diversity and were exposed to regional disasters. On the other hand, some IT and technology companies are finding it easy somewhat to survive downturns as they have a strong vision to put their reputations ahead of growth at all times and costs during favorable economic times.
Innovation thrives during down economies
Downturns tend to be periods where innovative entrepreneurs with an out-of-the-box approach to business have more downtime to think, invent, and create solutions to real problems that address the pain points of the consumers and the industry.
Those inventions are brought to market with sophisticated business models that were fleshed out during lean times that suggest they tend to be more economically and practically sound.
PR (earned media) weathers downturns better compared to paid
The rise of online paid, influencer, and growth marketing channels in the last decade has guided companies’ A/B test tactics, access more measurable results, and better align marketing with the comprehensive funnel.
Everything else apart earned media marketing is still a cost-effective way when it comes to customer acquisition. Furthermore, it does make sense in today’s era of paywalls where article views drive revenue for media outlets to align readership with staff investments compared to advertising only revenue models.
Scrappy wins in any economy
Inherent scrappiness is all it takes to starting a company, being employee and customer-obsessed, and driving earned versus paid results. Hiring fast, driving visibility, and having a growth mindset is not the right and best differentiators during a booming market as everyone is making a similar attempt to do the same thing. Scrappiness is all about not following the conventional wisdom and seeing opportunities where others don’t.
After all, there comes a point during a down economy when the upside of investment manages to dramatically overshadow the risk and it then becomes a calculated competitive advantage. To sum up, companies that manage to cut the most and follow a playbook rarely tend to gain market share during or after a recession.
Taking the above factors into consideration, it can be easily interpreted that the novel coronavirus (COVID-19) that is as of now causing havoc in the global economy may actually lift up the world economy in the times to come.
Till then, stay blessed and protected!