There is no secret that the current economic situation is, let’s say, far from favorable. Companies are firing employees, consumers are losing money, and with that, their buying power is dropping; meanwhile, the situation in the world remains unpredictable. A vicious circle. Most likely, you have already felt how this crisis is influencing both business and daily life.
Here are the main risks for businesses that may occur very soon:
When consumers realize their income is not the same as it used to be, they stop spending on anything that isn’t critical. That means fewer sales for brands, slower cash flow, weaker quarterly numbers, and a tougher fight for every transaction. That is how demand doesn’t collapse overnight; it always fades gradually.
The companies with no buffer - thin margins, high debt, or unstable demand - will be the first to disappear. Some will shut down quietly; others will be swallowed by bigger players.
Those brands that will survive will operate in a colder, more defensive environment.
The worst scenario is when growth slows but prices don’t follow, especially for basics like energy, rent, food, and logistics. That means you can’t “save” your way out: even if you cut costs, your purchasing power still erodes.
At some point, governments will try to “fix” the situation, and, unfortunately, not always wisely. They may raise taxes, restrict credit, cut subsidies, freeze prices, or tighten regulations.
Historically, late policy interventions often make business conditions worse, not better. And when public budgets get squeezed, companies cannot count on the same safety net they had during the pandemic.
Hard times force us to gather what we have - skills, people, money, attention - and use them with intent instead of on autopilot. The point isn’t to freeze or react chaotically, but to move with strategy. The question is not if we should act, but how to channel our effort so it actually works. Here is a couple of advice for the hard economic times:
You will see many brands in panic, trying to target as many people as they can, hoping that it will increase their revenue. A shrinking market, however, punishes broad targeting. Keep the customers who still have money and still have a need. Survival is about depth, not width.
Companies die not because they cut, but because they cut the wrong things: marketing, R&D, customer support. The practice and various studies show, cutting marketing during the crisis can only worsen the situation. Thus, when your competitors are getting silent, it’s your high time to raise your voice through marketing.
Instead, remove vanity spend; protect what feeds demand.
In a recession, buying decisions shift from desire to defense. So your product cannot be framed as an upgrade or a nice perk in the current situation. Instead, you need to reframe it as a risk-reducer, cost-saver, or performance enabler.
As an example, during the pandemic of 2020, Airbnb shifted its focus from delivering “travel experiences” to “safe local escapes”. Thus, before the pandemic, they forced global travel, freedom, adventure, and switched during the crisis to “stay nearby, isolate safely, live & work elsewhere short-term”
Acquiring a new customer in a recession is a premium-priced sport: higher CPMs, longer decision cycles, more objections, more stakeholders, and less willingness to try anything new. Retention, on the other hand, works with people who already trust you and already pay you. The unit economics are completely different.
That’s why during downturns, the smartest brands lock in the base:
The principle is the same as in nature: only the most adaptive make it through. The crisis may drive you to consider different opportunities that will require risk and changes on your part.
During a recession, flexibility becomes a competitive advantage. You work with the resources you already have, and you stay alert to new openings the market creates in chaos. Those who move first when opportunities appear usually own them.
Adello was founded in 2008, right in the middle of a global crisis. Since then, we have gone through several downturns, including the 2020 pandemic. We have experience not only surviving, but operating through volatility.
Everything mentioned above reflects what actually helped us get through hard cycles. But there is one more principle worth stating explicitly: consolidation is crucial. We know the kinds of pressures companies are facing now - we have been there.
That is why we invite you to a free consultation on how to navigate marketing during this period. If you want to discuss realistic strategies for the current climate, fill out the form below, and let’s talk.
