Create New Opportunities to Thrive in Recession By Judy Celmins

As headlines shout doom & gloom, remember that primal human drivers don’t change, whatever the economic climate.

Understanding customers & consumption

There’s an excellent 2009 Harvard University study by Professor John Quelch and Research Associate Katherine E. Jozc on How to Market in a Downturn.

They identified four segments of customers in a recession …

  1. Slam-on-the-brakes: reduce all types of spending.
  2. Pained-but-patient: the largest segment, who economise, but not aggressively.
  3. Comfortably well-off: maintain spending, but more selectively and less conspicuously.
  4. Live-for-today: tending younger, who mostly extend their timetables for large purchases.

And also described four categories of products & services consumption …

  1. Essentials: central to survival or well-being.
  2. Treats: which customers view as justifiable.
  3. Postponables: can be put off.
  4. Expendables: unnecessary or unjustifiable.

So 16 possible combinations of customers and consumption to help plan your strategy.

This chart, derived from the article, shows 13 Recession Behaviour scenarios with potential opportunities, depending on your type of business and target customer.

The importance of Perceived Value

As incomes are squeezed and costs go up, people still have to function in life, and fulfil emotional needs as well as practical.

They will look for a way of gaining the same value from a lower cost alternative. And when it comes to Treats, it’s human nature to want even a small moment of pleasure, especially in tough times.

Potential tactics

The research suggests ways of adapting your offering to retain customers e.g. from the ‘Slam’ and ‘Pained’ segments

Essentials & Treats

  • Offer smaller pack sizes for less money.
  • Create a budget ‘substitute’ version.
  • Promote ‘bonus’ packs to encourage stockpiling.
  • Emphasise ‘dependability’ of your product or service.
  • Promote Treats as a small ‘you deserve it’ indulgence.
  • Reward loyal customers, even if they buy less (e.g. loyalty points, discounts, freebies).
  • Promote Treats as affordable alternative to more expensive luxuries.


  • Challenge ‘false-economy’ behaviour with facts if the outcome is unsafe.
  • Promote repair services, offer tips on how to extend the life of their purchase.
  • Provide a simpler version.

Grow the relationship with advice & insights

Keep the customer relationship going, even when they’re not spending, to stay top-of-mind as conditions ease.

Maintain awareness and build trust with free advice on money-saving tips relating to your category. Even in an Expendable category, you could provide a temporary DIY alternative, with trust-equity repaid in future sales.

People turn to friends and community in difficult times – why not be a trusted friend in a recession? Use social media to stay in touch with customers and grow your relationship with practical content.

What’s the role of your product or service in their life? Have a chat with five of your top customers on what you can do to help them.

The Takeaway

Look for opportunities in primal needs. The only limit is your imagination.

I’m Judy Celmins, and I’m a marketing strategist with Thriveablebiz I can help you thrive, contact me

This is an extract from a more extensive article you can find here.

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