“Prepare for a ‘long and ugly’ recession, says Dr. Doom.” According to Fortune, Nouriel Roubini, “the economist who predicted the 2008 crash,” now predicts a bad U.S. recession is on the way. 

Not everyone agrees. According to CNBC, in a month’s time in Q3, experts have predicted “a recession is everything from inevitable to unlikely.” 

Setting the semantics of a potential recession aside, there seems to be plenty of agreement on the economic hardships already wreaking havoc in the United States and around the world. Already soaring, “U.S. inflation grows more persistent,” according to the Associated Press. U.S. Capital markets are contracting with IPO volume drying up and instability in the U.S. stock market, and the effects are being felt around the world. 

According to The Hill contributor Desmond Lachman, “The Fed’s raising interest rates at the fastest pace in 30 years, as well as its move to an unprecedented pace of quantitative tightening, might serve the U.S. well in its fight against inflation. But it is doing so at a substantial cost to the rest of the world economy.” The Wall Street Journal concurred in its article, “Dollar’s Rise Spells Trouble for Global Economies.”

Address economic woes directly

Dept. 11 was born during the Great Recession, which officially lasted from 2007-2009 and is widely considered the most significant downturn since the Great Depression. As mortgage-backed securities imploded, the economy fell apart and the effects ravaged the U.S. housing market, the U.S. job market, the retirement plans of thousands, and other long-trusted processes and institutions. 

Founded in 2008, Dept. 11 launched to address the changing needs of marketers and make lemonade out of a mostly dreary economic environment. Our recipe for success was simple and works across industries: stay nimble and serve what the market needs at the time.

Experiencing the economic impact firsthand, primarily through reduced budgets and falling customer demand, marketers needed to fluidly staff teams, have experts at their disposal when needed, and quickly contract efforts at will. In short, they needed to execute marketing plans in a new way, and Dept. 11 responded to this change with a new and compelling offer to provide expert staff for critical projects, secure the long-term hires that had eluded them, or to function as a full-service agency partner. Marketers needed flexibility first and foremost, and Dept. 11 offered a compelling solution that continues to help marketers thrive through booms, busts, contraction and expansion.

Listen to the market

Brands need to listen to their clients/customers and the markets they serve at all times, but it’s exponentially more important in times of turmoil, economic or otherwise. Turmoil accelerates the rate of change, exposes broken models and triggers seismic shifts in what customers and the market at large need. Existing brands that track the pulse of their customer base to proactively identify and address shifts in needs, changing challenges and emerging opportunities, have a leg up.

Sometimes, the market needs something new that at first may seem counterintuitive, and Fortune contributor Candace Nelson shares some great examples in her August article on consumer spending, “I built a brand during the worst recession in modern times. Here’s what I learned.”

During the Great Recession, as consumer investment portfolios took a pounding, property values plummeted and many lost their jobs, building luxury consumer brands might sound like a horrific idea to many, but Candace made her own lemonade and then some. Sprinkles, her high-end bakery, launched a couple years before the 2008 recession, and “within days, my business outlook turned from promising to bleak,” she wrote.

She credits her success that followed, at least in part, to strengthening the brand. “Consumers pull back on spending during downturns, but there are still small luxuries and strong brands that people will make room for in their budget,” she explains. She outlines the concept of the term “lipstick effect” or the idea that “many consumers will find the cash for small indulgences during hard times, even as they forgo buying bigger, more expensive items,” and offers firsthand evidence that the concept holds up.

Instead of cutting marketing budgets and discounting products as so many do as a knee-jerk reaction to a contracting economy, Candace recommends finding the fun. As the economy contracted in 2022, she sees evidence of this in the huge success of certain nostalgic summer blockbusters and other products that leverage humor and levity. Consumers want a break, and marketers can provide it. Don’t devalue your product; reposition it, in other words. 

It turns out that consumers’ love of high-end baked goods motivates them to make room for the splurge, even as budgets shrink. Sprinkles’ unique model of just-in-time cupcakes that are every bit as freshly baked in the late afternoon as they are in the early morning hours was something  consumers never stopped their hunger for.

Whether marketing professional services or high-end baked goods, listening, adapting and building a brand around fast-evolving customer preferences can lead to branding gold, even in a woeful economy.

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