File this lesson away for the next recession

The more one reads about the history of recessions and market collapses, the more one realizes why certain contrarian investors and marketers look forward to those times when others are capitulating, laying off, hunkering down and wallowing in bad news delivered by CNBC all day.

Those who see times like these as business and investment opportunities love reading stories like this one on Time.com with the headline, “Why the Talk Has Turned to Depression.” They especially love the last sentence in the story, “This goes to show that nearly everyone has gone from being nervous to terrified.” (Sidenote: Such an attribution to a make-believe group called “nearly everyone” reveals the Time.com piece to be what Jeff Jarvis calls “a self-fulfilling story.”)

When people who run giant companies get terrified over the possibility they may lose the ability to travel in private jets, they also lose the ability to think. That is great news for those who can. Rudyard Kipling taught you that in middle school: “If you can keep your head when all about you are losing theirs and blaming it on you…you’ll be a Man, my son!”

Being terrified is another way of saying, “panic.” Kipling said it much more poetically than neurologists and psychologists, but they explain what happens when you panic in much the same way. However, they use terms like “limbic hijacking” to describe the way panic causes emotional parts of issues (like watching CNBC all day) to hijack the part of our brain from which rational thought originates.

I say all this to note that sometime in the future, when we’re heading into the next recession, writers will be looking for examples of how companies weathered previous recessions. And once more, they will look back and discover the winners were those companies that look forward to recessions as times in which they can gain market share. Like so many other things when it comes to marketing, Apple will be one of the examples, and the story-line will go something like this:

“While other technology companies curtailed their ad budgets to ride out what appeared to be an intense and protracted recession, Apple actually increased marketing and advertising.”

Apple will come out of this recession a winner. “Nearly everyone” who panics won’t.

  • I am with you. I turned CNBC off, drastically cut down on the news I read, and quit watching the DOW and NASDAQ (and other indexes I was watching like RTL). Specifically in relation to Apple I thought the $80 a share was just too low so I went long and deep.

    We are thinking about expanding our retail business if we can get recession level prices on a lease. I am also staying the course with my startups (though I have decided raising money at this stage would be a waste of time).

    I am curious what you are doing to take advantage of the situation. Have opportunities started to present themselves?

  • Jackson: We are not immune from the economic downturn and last year made adjustments related to the changing needs of specific clients.

    But we are continuing a long-term strategy that included recently adding a new position, a new national sales manager, and are continuing to evolve and expand the services and product we offer. Also, we’ve budgeted more for marketing this year than ever before.

    As Hammock is an “outsource” provider of a certain set of creative and technical services, we are seeing an uptick in requests for proposals that we think may have previously been done by the potential clients’ in-house department that may no longer exist.

    We, too, are utilizing more outsourcing. One thing we’re doing (as you know because I’ve sought your insight on this one) is broadening our network of the “partners” we’d like to work with and to include in our RFPs. We’ve always worked with dozens of writers, photographers and illustrators. Now we’re working in the same way with videographers, web developers and other types of companies and individuals.

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  • Great post! We’ve had a few clients put marketing projects on hold since the news media has whipped them into a heightened state of fear. It’s too bad since these same companies have available funds and great products with interesting stories to tell. I’m hoping news of Apple’s stance on marketing will become more widespread and taken into consideration.

    For my small clients who lack financial resources, I wrote in my January Buzz Builder newsletter and blog about how they can take some inexpensive yet effective steps to grow their businesses. Perhaps you readers might find it interesting…
    http://blog.galvincomm.com/my_weblog/2009/02/embrace-buzz-refuse-to-participate-in-a-recession.html.

    Thanks for you blog. It’s one of the few that I read regularly in my RSS reader.