Tag Archives: Risk v Reward

Taking the risk…Reaping the reward

As a marketeer, you get used to hearing certain buzz words around the place. They tend to seep slowly into your consciousness, become entrenched in your everyday vocabulary for some varying amount of time before sloping off again into obscurity. Some stick around for what seems like forever. Some disappear along with the outward forces that created such a need for the term in the first place.

‘Credit crunch’ is one such word. You couldn’t move for ‘credit-crunch’ some months ago, but somewhere along the way it paved the way for ‘recession’…an altogether darker more unforgiving descriptor. ‘Credit crunch’ sounded dangerous and powerful. Recession just sounds grey and depressing. And when such words enter the public psyche, we marketers have to use them more and more ourselves because after all, the consumers affected by sociological goings-on are those people we still have to persuade to buy our products., whatever their economic situation.

What start of as ‘asides’ in presentations quickly become ‘topics for discussion’ which in turn become presentations in their own rights. And as we grapple with these terms and how to manage these sociological changes, we create terms that tend to go hand in hand with them. Imagine an organogram with the terms that we might associate with recession. You might see ‘hard working’, or ‘cheap’, or ‘quick fix’ and ‘guaranteed results’. It is easy to see why it happens. It happens because money is tight and people start to watch their backs fearing for their jobs and ultimately their source of income. They don’t want to take any risks and give their employer a reason to get rid of them. People become more conscious of doing nothing wrong than they are of doing anything right.

And this has to be the wrong approach for 2 reasons.

Reason 1: Look at the facts…

I just took a look at the unemployment statistics and found this quote from the national statistics site:

“The employment rate and the number of people in employment have fallen. The number of vacancies has fallen. The number of unemployed people, the unemployment rate and the claimant count have all increased. The number of inactive people of working age and the inactivity rate have increased. Growth in average earnings, excluding bonuses, has fallen”

Now, if that isn’t a bleak picture then I don’t know what is. It’s not a great suprise – the contraction of the economy has meant that there simply isn’t the growth at this moment in time to support the number of jobs created pre-recession. Now, the crux of this argument is the fact is that most of those people were not doing anything wrong. The majority of them were working hard and  trying to stay in employment – trying to not do anything wrong. One thing is for sure though, not many of those people were trying to be different – to be bold or adventurous. It is understandable,  human beings are programmed to try and protect and the fear the loss  is a stronger emotion than the desire to strive for something greater.

But when you look at the facts,  it doesn’t actually make any sense to ‘be safe’. The reason for this is that ‘being safe’ ensures you stay in the same lottery bowl as everyone else. By ‘doing different’, you at least give yourself more of a chance to succeed.

Reason 2: The need for change

The second reason is that when things are bad, people are looking harder than ever for something different. Something to drag them from the boring minutiae of their everyday life into a place where for they can forget about their worries. If we can recognise this as marketers and try and give consumers something different from what is already in existence but at a lower price point, then we stand a chance of engaging them. We need to adjust our psyche to take risks in adverse environments. If we can do this,  then we are more likely than not to succeed.

Why? Well ,let me quote another blog (in French) ‘envie d’entreprendre’ which explains why an innovator would have a higher likeliness of success in periods of crisis:

Since financing is more difficult to obtain, those who know how to operate in a low-cost, frugal environment have an edge. Since many people wait and see, even are “frozen”, using the crisis as an excuse not to act or cannot act because of lack of financing, there is less competition. Since there is less competition, the market is easier [and more talents are available].

I like these arguments: less competition + better efficiency = increased likelihood of success. It seems that periods of recession can create opportunites to become MORE entrepreneurial, innovative and push boundaries. So maybe, it’s about time we stopped talking about always delivering ‘value’ and ‘hard working approaches’ and start thinking about how we bring the greatest possible changes to those people who need them most.

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