As the economy continues to struggle, those in the service sector need to remember that the customer service they provide can remain at a high level (or perhaps even improve). Of course a changing economy may hamper people’s ability to offer services they may have done in better times. Indeed financial pressures will almost certainly encourage businesses to enforce contract terms more rigorously. This may prove a costly mistake for some, especially if the ‘letter of the law’ approach is combined with poor customer service.
Today I was involved in a car accident. Some guy decided to turn left without really checking to see if there was a car coming the other way and drove straight into me. To say that his insurance company were less than friendly when I called them would be an understatement. Now I know they are trying to limit their potential loss here but by being borderline rude they have ensured I will never use them for insurance. It costs nothing to be polite and to show that you understand the needs of the other person in a service situation, something this insurance agent has never been taught. So when clients come asking for the moon and want you to do the work for next to nothing please remember to listen and to empathize with their challenges. You shouldn’t need to agree to requests that mean you would be giving your time for free at a time when you can least afford to do it. Equally you shouldn’t leave them feeling like you were being rude to them. This isn’t always easy, especially when clients are under pressure and are themselves being rude but it can be done and the PR people who can walk that line will do very well.
Just as in the fashion industry everyone awaits the answer to the question: “what’s the new black?” business leaders should be asking “what’s the new behavior?” The new behavior I’m referring to here is recession behavior. Of course the obvious signs of the new behavior are people being more cautious with their spending. However, the behavior shifts are a lot more complex than that.
The new behavior is built on people replacing one action with another. For example I heard from a friend who is a family doctor that many of the patients that would normally be in her office at this time of year complaining about a cough or cold are simply not coming in. This isn’t because they don’t have a cold but because they don’t want to make their copay. So instead of going to see a doctor they are taking over the counter medicines and riding it out. Put another way they are still doing something. They’re just taking a different (cheaper) path. Of course this may end up being an equally expensive route and could even wind up being more expensive.
Replacement recessionary behavior as I’d call it, is something we can expect across all aspects of life and isn’t simply limited to consumer behavior. This is something PR people need to consider when they plan activities for ’09. For example is your client’s product a product that could be a replacement for another more expensive (normal market conditions) option? Or is it a product likely to be replaced by another? In many cases the way the product is sold will need to change. For example if you are selling chocolate or a latte I’d suggest it is sold as a replacement to those who are cutting back on eating out. If you can do this it may actually open up a new market.
As I mentioned this type of behavior won’t be limited to consumer markets. For example in business, people are cutting back on off sites and business travel. How about spending some of that saving on Skype video conferencing technology (a few cheap web cams)? I for one would much rather do a video conference than spend hours on a United Airlines flight across country. In other words for every change in behavior there is an opportunity. The challenge is how to make your client’s product or service the beneficiary of this change. In some cases it will require some creativity but I can assure you it will be worth the effort.
Now that the US and many other major economies are officially in recession it is tempting to believe that 2009 is going to be a horrid year for PR agencies. I suspect for some it will be. There will be plenty of lay offs as smaller clients cut back and larger clients become more cautious with their marketing spend. But it needn’t be all bad news. Agencies may well end up with limited if any financial growth but they can grow their business in plenty of other ways. Agencies can finally embrace good measurement techniques, social media and other related digital services. They can explore ways to extend their services so they better integrate with other marketing services. Put another way, consultants can increase the skills they are able to offer clients and therefore increase the return the clients get from their investment.
I think it is also worth noting that not all PR agencies are the same (I know how obvious that statement is). I say this to remind consultants that the fortunes of agencies lie in the skills of the management at the agency, the strength of their client relationships, the products they offer, the ability of the agency to demonstrate value and of course a little luck. This means that some well run agencies that are also lucky may well grow in the next year or two. For PROs wondering if their firm will be one of them they need to evaluate the management, product offering and client base. They then need to ask themselves how their agency scores. The luck part is of course impossible to measure but its is worth noting that the better agencies are likely to also be the luckiest. Indeed I think it was the golfer Gary Player that said the more I practice the luckier I get.