I’ve been really impressed with the way our company and our clients have reacted to this crisis. First and foremost, we’re taking precautions to slow the spread. We, as well as our clients, moved quickly on things like suspending travel, replacing in-person qualitative with on-line approaches, and working from home. So far this has kept our staff and our clients free of the disease and allowed us to tirelessly meet our clients’ rapidly evolving needs and deadlines.
I’ve also been impressed by the way our clients have reacted from a business standpoint. With all the scary news and panic buying, it is impressive that our clients have reacted to the crisis seriously and thoughtfully. While it might seem insensitive to talk about business issues in a crisis like this, the reality is that we need a thriving economy for the well-being of everyone.
Every recession is different and this one is perhaps the most different of all. It came on more suddenly and was driven not by economic factors like inflation, commodity prices or financial institutions collapsing. With that said, such downturns are not unprecedented. They are referred to as “event driven” recessions. Unlike normal recessions, the event driven variety tend to be short lived with fast recoveries. According to the Goldman Sachs article the stock market typically takes just 15 months to fully recover from an event driven recession as compared to over 100 months for a structural one (such as the financial crisis of 2008). It is important to understand that while it takes 15 months to get back to where the market was pre-bear market, the recovery starts much earlier than that; it might have already started.
Simply put, even as the crisis grows you need to plan for the upsurge to come. In the short term, you need to understand what consumers are thinking and when that thinking will change. Most critically, you need to understand how to connect and the tone your audience will accept from you so you don’t alienate them. Longer term you need to understand how this recession will change behavior. We do so many discrete choice conjoint studies that I tend to think in terms of “features”…so what product and service features will change forever due to behavioral changes? For example, more on-line usage is a no-brainer given the success of this extensive national experiment in remote working.
While all recessions are different, we can still learn from each one. This HBR article outlines the consumer mind set as they come through a recession. It separates products into “Essentials, Treats, Postponables, and Expendables.” Knowing where your product falls and how various types of consumers will respond is critical.
In closing, we understand the gravity of the situation but remain hopeful we will come through this OK together. As people, we may be left with a permanent mark on how we view and value the world but will come out stronger than we were before. As an industry, we are uniquely suited to help distinguish between the temporary bruises and the permanent scars on the consumer landscape.
If you’d like to talk through these concepts, please drop me a line.
Rich brings a passion for quantitative data and the use of choice to understand consumer behavior to his blog entries. His unique perspective has allowed him to muse on subjects as far afield as Dinosaurs and advanced technology with insight into what each can teach us about doing better research.