For months there has been talk of a lingering recession on the horizon. With a tepid stock market, soaring inflation, and rising interest rates, brands are less than optimistic about the state of the economy. This means they are looking for areas to cut costs.
We’ve already started to see it– from mass layoffs and budget cuts, companies are looking hard at what expenses are “nice to haves” vs “must-haves.” And anything in the latter category is at risk of being chopped. As an agency, it’s not the time to panic. It’s the time to get smart and prepare for the worst case scenario while hoping for the best.
In this post, we are sharing tips to help your agency maintain success even in the event of a recession.
5 Biz Tips for Recession Preparation for Business Success
AAR Partners has been in business for over four decades. In that time, we’ve had the pleasure of watching marketing and advertising go from a “nice to have” for most businesses to an absolutely must have. With that being said, in times of a recession, organizations may not be letting go of their entire marketing department anymore, but they are looking to eliminate extra expenses where possible.
A lot of times, whether your agency is viewed as expendable or not is rarely in your control. Yes– you should be adding as much value as possible, but there are a variety of uncontrollable factors like CEOs who don’t value marketing and companies shutting their doors.
That’s why it’s so important to take a proactive approach in times like these. Here’s our top tips to ensure success even during a recession:
1. Diversify your clientele
Every agency has that one behemoth of a client… but have you truly thought about what would happen if they ended their contract? While we hate to think of such situations, when faced with a recession, it’s something you need to take seriously and it has recently happened to a few agencies in the past few months.
Agencies that follow the 40% rule are less likely to fail in these cases. This rule is simple– don’t ever let one client make up 40% of your agency’s revenue. Why? Because your business is entirely too reliant on that client sticking around. In unprecedented times betting the well being of your business on one client is a risk you simply can’t take.
Right now is the time to start diversifying your clientele. Add on a variety of clients, smaller ones included, to ensure if something does happen with your behemoth client, you’re not shutting your doors tomorrow. 20% of your roster as project work can go a long way during tough times and they often convert into larger accounts as trust builds.
2. Get serious about your lead gen approach
Recently, we’ve been spoiled by an influx of inbound new business opportunities. In every smAARt Huddle since early 2021 agencies have confirmed that business was booming and inbound leads were flooding in– but with a lingering recession, that could quickly come to an end.
Without an influx of inbound leads and referral opportunities, it’s critical that your new business team is putting in the work to keep the pipeline full of potential opportunities. The way to do this is through building trust. In addition hunting down leads in Winmo and pounding the phone and inbox, consider:
- Commenting on articles your prospects are reading
- Getting involved in Twitter chats or LinkedIn forums to build rapport and set alerts so you can be the first to post comments which are more often read than subsequent comments
- Sharing insights, ideas, and relevant experiences with a select group of prospects that you’d like to work with for rational and emotional reasons
- Sharing articles (that you didn’t write) on your social media with your own smart commentary added to them
Establishing yourself as a trusted source is critical to landing new business.
But the hard work shouldn’t fall on their shoulders– acquiring a new customer costs five times more than retaining an existing one. And one of the best (and easiest) ways to generate more revenue for your organization is to grow your current clients’ scope of work. So it falls on your account management teams to ensure value is constantly being added to your clients scope.
3. Revisit customer perception and value
It’s no secret that when a recession is on the horizon, households begin to evaluate what they can cut out of budget if and when inevitably necessary. Both B2C and B2B companies alike tend to get caught up in the nuances of daily operations and overlook the possibility of being eliminated. Always remember that even when you are dealing with an entity you are still dealing with real people behind the scenes.
Why did your clients choose you to begin with? How might a recession change your unique selling proposition? You are the specialist, so find ways to subtly remind customers that your business provides value and expertise that exceeds the dollar value attached to it.
It may be tempting, but when expecting a recession your clients will ultimately be re-evaluating which business partnerships are absolutely indispensable, not what is on sale. At AAR Partners, we always educate agencies to price their services for value not time– so even in hard times, remember to focus on being the best at what makes you uniquely valuable, not the cheapest.
4. Reconnect
When it comes to agency new business– relationships are everything. Period.
Especially during a time where businesses are thinking about what can be eliminated– indistinguishable and mediocre customer relations can be a reason your agency gets placed on the chopping block. Backing up your value is the structure of the business, but a positive relationship is the bond that holds it together.
Find ways to let your clients know that you appreciate their business and see what else you can do for them before they start pondering whether or not the relationship is worth cutting ties to begin with. Be willing to be reasonably flexible and accommodating in terms of service and resources provided. In addition to evaluating your services, break bread with them and don’t always talk shop!
5. Being proactive is actually being on time
It is easy to get caught in a tunnel vision focused on survival, but remember that proactive acquisition and retention is always a present matter of business. Ultimately, the downfall of any strong agency is the lack of new business success. Never assume that what works now works tomorrow, no one stays on top forever by being reactive.
Go after your right to win clients, keep fueling your pipeline, and above all, pitch to brands with a passion.
Take Advantage of your Agency Growth Program Membership Benefits
Over the past 40 years, AAR Partners has helped hundreds of agencies navigate unprecedented times– dot com booms, recessions, pandemics– you name it. And with your agency growth program benefits, you get two annual visits with Lisa Colantuono (but she’s always willing to jump on a call to help out however she can and isn’t counting the number of visits).
If you have questions about the near future and how your agency can succeed through a recession, schedule your consultation with her today.
Prior to joining Netflix, Marian was the Vice President & Co-Head of Music at Spotify for nearly 8 years. Over the course of her impressive career, Marian has worked with some of the leading brands in fashion and music. Her other experience spans various roles at Condé Nast including VOGUE, program management at Gilt Groupe, and marketing at J.Crew. Marian began her career at PricewaterhouseCoopers as a management consultant
In this guide, you will learn everything you need to know about Marian to develop meaningful outreach. Including:
- Work history
- News highlights
- Speaking engagements
- Personality insights
- Outreach tips
Hello and welcome to AAR Partners’ new biz quick tips shared exclusively with our AAR Agency Growth Program Partners.
Did you ever sit and think about, “Why your agency?” Why does your agency exist? What does your agency do that another does not? How does your agency provide services that stand out amongst the pack? It boils down to, “Why you?”
After evaluating hundreds of capabilities presentations over the past two decades, those agencies that really stand out are those that have anchored their agency with a positioning statement or a north star. And that positioning or storyline is weaved throughout all materials.
But why do you need a clear positioning strategy? For starters, it helps you to define why you exist as an agency. It often leads to a stronger win ratio since your strengths are more clearly defined. And it often leads to fewer competitors since there are fewer agencies who can say what you do. Your positioning becomes your differentiating factor.
As Tim Williams notes, a well-positioned agency strikes a balance between “authenticity and aspiration”.
So how do you find your perfect agency positioning?
- Separate your positioning from your philosophy – your philosophy is a statement about your beliefs. You positioning is how these beliefs translate into value for clients. For example, “ABC is a digital agency obsessed with driving more ROI” doesn’t help you stand out. What really matters is showing prospects what you’re great at and why. For example, Argonaut positions itself as the following: We’re a full-service advertising agency specializing in creating brand comebacks, and our ambition is to make the most effective creative work in the world.
- Answer the ‘Why’ – Why should prospects belie that you can deliver on your positioning? Show proof of your target expertise with case studies. Prove your expertise with results, reviews, and testimonials.
- Establish reference points – don’t have a prospect land on your site and wonder “what does this agency do?” Think you the way your prospects categorize and contextualize agencies. Then establish points of reference to help them evaluate your services.
Finally, take the litmus test. Look at your website and honestly ask yourself if your agency logo can easily be replaced with one of your competitor’s logos? Be neutral and brutally honest about it. Are you making generic claims or really highlighting your why?!
Remember to find a balance between authenticity and aspiration, and “Why You” should pop.
There you have it. That’s my counsel on this topic and I hope it helps. Look out for more of my new biz quick tips shared exclusively with AAR Agency Growth Program Partners…
Leads to Leverage
Bealls – With a history spanning more than 100 years and a network of more than 500 stores across the US, Matt Bealls, CEO, was focused on adding 100 news stores to Bealls Outlet and Burkes Outlet retail chains by December 2021. The stores are known as Bealls Outlet in Florida, Georgia and Arizona, and as Burkes Outlet in the other 20 states that it operates in. However, the acquisition of bankrupt rival Stage Stores’ distribution center and intellectual property now gives Bealls the national rights to the Bealls name. The next few years will see Bealls work to continue that growth with the aim of becoming the “premier off-price retailer in America”. “That is our goal, but we’ve got a long way to go because we’ve got great companies that are larger than us and in front of us,” Matt Bealls admits. “But we feel that we can make up that gap here over the next three to five years in a really significant way by adding a bunch of stores and increasing our comp sales in existing stores.” They have also shown a high intent data when searching for “creative agencies” recently.
New Ownership
Denver Broncos Announce $4.65 Billion Sale Agreement with Walton-Penner Family. Read more here.
Expansion Plans
Ferrero candy maker eyes $214M expansion in central Illinois, bring with it 200 new jobs. Read more here.
Brand Launch
Pet Releaf, the Original Plant-Based Pet Health brand, Launches New Stress Releaf CBD Hemp Oils Ahead of July 4, The Most Stressful Day of Year for Dogs and Cats. Read more here.
Acquisition Opportunity
Milestone Brands Strengthens Strategic Position with Acquisition of Victoria Distillers and Azzurre Spirits – Milestone Brands LLC, the premium spirits company based in Austin, Texas, announced that it has acquired Victoria Distillers Inc (“VDI”), one of the oldest artisan distilleries in Canada and the producer of Empress 1908 Gin, and Azzurre Spirits Corporation, the U.S. importer of Empress 1908 Gin. Read more here.
Trend to Watch
Add a Little Zest to New Biz with Herbal Opportunity
Demand for medicinal plants is shooting up… There are some high-growth opportunities
What’s Trending: Interest in herbal health remedies is brewing. Items like mulberry tea and ginger foot soak are exploding on Amazon. Google searches for seemingly obscure options (heard of shilajit or bakuchiol?) just hit all-time highs.
The most popular ones are sticking around: sea moss plant is still trending. Inspired by, Trendsters Yulia and Ruslan launched a sea moss capsule biz that was on track to hit 6-figures a month with the last checked in.
Capitalize on the trend via:
Supplements and teas. Interest is sprouting up for:
Shilajit. Jungle Scout shows there are 26k+ US searches/mo. on Amazon (up 17% MoM) for this “sticky, tar-like” substance.
It’s formed from the decomposition of plants and minerals at high altitudes, and is used for everything from boosting testosterone to heart health. This resin, which goes for ~$24 per 0.2 ounce, generates $105k+/mo.; other popular products include capsules and liquid drops.
Source: Google Trends
Mulberry leaf tea. One brand brings in $5k/mo. on Amazon; it’s been out of stock for weeks, though, and with search volumes up 700%+ MoM, the market is ripe for new entrants.
Japanese knotweed. Amazon searches are up 600%+ MoM, with these capsules generating $9k+/mo. Japanese knotweed is a pervasive alien species in the US and beyond; your supplement brand could help control invasive populations.
Other popular options include:
Source: Jungle Scout, March 2022
External applications. Personal care brands and salon owners could leverage the trend, too:
Ginger root for… foot soaks. Google searches for “ginger foot soak” hit an all-time high out of nowhere in February — with New Zealand, Australia, and Canada driving search interest. There is also big US demand on Amazon, with 7.4k searches/mo., a 3,000%+ MoM increase, per Jungle Scout.
The soak is used to boost circulation, decrease inflammation, and even lower blood pressure (something we could all use in 2022). This trend appears to only just be taking off; if the trajectory continues, early market entrants could win big.
Scientific skin care has continued to soar since 2020. Plants are now coming to the party. Interest in “nature’s retinols,” like rosehip and bakuchiol, is climbing. Include these in facial treatments, serums, lotions, etc.
Source: Google Trends
The Opportunity. Herbs have gone wild and commonly searched terms in the U.S., via Ahrefs include:
- Herbal remedies — 14k searches/mo.
- Shilajit benefits — 9.3k
- Herbal store near me — 9k
- Rosehip oil benefits — 5.9k
- What is sarsaparilla — 4.7k
- Bakuchiol vs. retinol — 1.2k
Next Steps: You may want to add a little zest to your new business prospecting by capitalizing on the herbal trend. Prospect smAARt, pitch with purpose, and most importantly, with passion.
New CMOs in Charge:
Popeyes
Jeff Klein
Chief Marketing Officer
Jeff is consensus focused – he prefers to build relationships rather than staying totally transactional. Unlike D or C types, he is convinced more by stories and testimonials.
Hooters
Bruce Skala
Chief Marketing Officer
Bruce is a persuasive, assertive yet informal executive. He is not against taking risks and can make tough decisions if he believes in your value proposition. A combo of speed and relationship will get the best response from him!
LEADS TO LEVERAGE:
Five Below:
When Five Below last reported, it outlined a plan to more than double its earning per share by the end of 2025. The retailer also set a goal of tripling its store count to more than 3,500 locations by 2030, up from 1,190 stores at the end of 2021. Roughly 1,000 of those stores Five Below plans to open by the end of fiscal 2025. They have also shown a high intent data when searching for “creative agencies” recently.
NEW OWNERSHIP:
Krave, Funfetti and Häagen-Dazs
Just a few of the lines that have flourished after being divested, with their new owners spending more on marketing, innovation and improving product quality.
EXPANSION PLANS:
ORAGIN Foods – “Ready to Scale with Plant-Based Brands and Next Gen Organic Retailing,” CEO Matt Lurie.
ORAGIN Foods is capitalizing on twin megatrends in the booming plant-based foods space and specialty organic retailing. CEO Matt Lurie shared with investors how OGGFF is positioned for explosive growth in the coming months, as it scales it’s “Organic Garage” specialty retail stores and expands its portfolio of CPG brands focusing on the plant-based and organic lifestyle.
BRAND LAUNCH:
Redbud Brand:
New $46 Million Financing Round Signals Soaring Interest In Startup Studio-Backed Food And Beverage Brands
TREND TO WATCH:
🎨 Sensory art (think finger painting) is designed to engage and develop children’s senses. Companies selling rubber ducks ($951k/mo), fidget poppers ($479k/mo), and sand and water tables ($329k/mo) are just 3 examples of this hockey stick trend.
Parents on Pinterest are searching for sensory art projects they can do with their kids.
NEW CMOs IN CHARGE:
Vanguard
Alissa Van Volkom
Chief Marketing Officer
Bark Box
Cindy Gustafson
Chief Marketing Officer