Ponderosa Founder and Group Strategy Director, Richard Midgley, lifts the lid on how brands (and agencies) can not only survive, but thrive during a recession.
When someone asks you to write a blog about the coming recession, you might think that they are assuming you are so old that you were working during the last recession. And yes – they would be right. In fact – I am so old that I started work during the last one – in the early 90s – and struggled to get a job.
I came out of a fancy university thinking I could take my pick of the biggest agencies in London and ended up working as a bricky’s labourer for 6 months until I offered to work for free for Phil Hesketh at Principles in 1993. But at least I did something different, I had something to offer and the genius idea of offering it for free. Not quite the advice I would give everyone, but it got me in the door, and I stayed for 15 years. And he did start paying me. Eventually.
The 2008 recession – or the Great Recession as I believe it’s called (not sure by whom) – was when we set up Ponderosa. We had one decent client (Halewood International, Crabbie’s Alcoholic Ginger Beer) and the owner John Halewood offered to back us if we went out on our own. So, we took the chance thinking that if we failed, we could blame the recession and not our own incompetence. Fortunately, it worked out. Crabbie’s was the bedrock on which we built Ponderosa and then through a bit of graft and some great teamwork we grew and prospered. Until they sacked us. And then we nearly went bust. But that’s got nothing to do with recessions.
So… two recessions survived, two interesting decisions down and two different life-changing outcomes.
It’s interesting isn’t it how we can talk ourselves into it or at least we talk up the downturn and so talk it down and so it becomes a self-fulfilling prophecy. I have never purported to understand financial markets but if the last two weeks shows us anything it is that they are what Matthew McConaughey says they are in The Wolf of Wall Street, “Fugayzi, fugazi. It’s a whazy. It’s a woozie. It’s fairy dust. It doesn’t exist. It’s never landed. It is no matter.” And I know some very clever people who make a very good living out of it and who agree with those wondrous words of wisdom. So that means we can both talk it up and talk it down – and still be right! Or wrong? One statement from Liz Truss and the pound drops like a stone, another from Jeremy Hunt and all’s well. Well not quite, but you get my drift.
The first point – other than a bit of quick thinking – is we must be careful about talking ourselves into a worse recession when we could be talking ourselves into one that isn’t quite so bad.
But let’s just for a minute agree that there is a recession coming and we can talk it up all we like but we need to prepare for it.
You really need to get a crash helmet and tackle it head on. Not put your head in the sand and hope it will go away but have a conversation with your clients. Ask them what they think is going to happen in their world. When our previous world came to a grinding halt at the start of the pandemic, some clients struggled, and others prospered. Some industries have long been seen as “recession-proof” – gambling, smoking, drinking – all the vices which no doubt will now be added to with vaping and other things that people can’t simply give up. And it’s not just the vices that people can’t give up. They will look for bargains, for better deals and for a bit of added value.
Speak to clients and try to understand how you can add value: can you do more and give a discount in return? Can you provide more services if the client has a recruitment freeze? Can you give a volume discount if the client gives you a brief that they didn’t give you before? Also think a bit harder. It has always been easier to spend a lot of money than spend a little. It’s why agencies in Leeds, Manchester and Birmingham are so much better at making smaller budgets go further than those in London. It’s about being clever and creative and not just doing the same with a smaller budget.
The same. Speak to your agencies. Be honest about whether you are cutting back or need to save money. Ask them what they can do to help, how they would spend the money more effectively and ensure that you still get the cut-through that you need. Ask them what else they can do for you? What discount can they give for more work? If you are cutting headcount – can they fill the gap?
It’s a time for honesty and openness, not just holding your breath and hoping that things will be OK. It’s a time to work together and get a plan that works. And most importantly it’s a time to be bold and talk ourselves up, not down.