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.