Reflexions in a (seemingly) bottomless pit.

Is it safe to look now?

Is there light at the end of the tunnel?

Is the ugly “R” word that spells cutbacks, layoffs, zero level budgets, empty desks, paralyzing fear and despair about to be shoved out of the way by the other “R” word? The one that means recovery, renewed activity, a revitalized economy and a refreshed outlook?

A variation of those clichés have become our morning fare – starting our day with a sobering shock of cold reality, as we watch impotently the quick unraveling of our dreams and their potentially devastating effects on friends and family.

And then we realize that the answer is no. No, we haven’t hit bottom yet. And No, we don’t know how much longer and deeper this recession will go on.

Consensus seems to be that things need to get much worse before they start to get better. How much worse? Well that depends on whose projections you read. To hear President Obama’s advisors, the economic stimulus plans will start kicking in sooner rather than later; but not that soon. In fact, Mr. Obama told NBC’s Brian Williams that the plan is “no magic bullet.”

Best recession behavior

I’ve been searching for a “How to survive the recession” self-help type book to provide me with valuable tips and advise that will help me negotiate these difficult times. I haven’t found anything valuable, which leads me to believe that the writer was laid off, too.

And so, unable to find solace from a book, I’ve exchanged thoughts and experiences with various friends and colleagues, both clients and agency people.

An overarching thought, my conversations have uncovered, is that none of us has lived through a recession of this magnitude. (Recession, when your neighbor loses their job; Depression, when you lose yours.) So most people are improvising – in a sense testing out different approaches.

The business as usual approach

Some simply sit impassively, acting as if nothing out of the ordinary is really happening, boasting a-bury-your-head-in-the-sand, business-as-usual attitude. They follow the old adages: Be proactive. Call the clients. Present fresh, new ideas. Be flexible. A smaller version? Sure. Mix and match? Readily. A little freebie here and there? ¿Por qué no?

Is this taking them anywhere? Not too far, from what I’ve heard. See, clients are operating under similar pressures to agency people. They fear for their jobs. They are living the heart-wrenching nightmare of watching their friends and colleagues receive pink slips. And when they come back to their desks after one of the Black XX days, when their offices become slaughter houses, they have to work among the deafening echo of empty workspaces in dimly-lit, half-vacant rooms: Frightened co-workers (those who survive); depleted budgets; and more pressing demands to bring in revenue.

The ‘it’s my fault approach’

Others (mostly agency people) assume responsibility for the ills of a system and act excessively meek. They become very humble. Walk silently. Speak low. Look down. Avoid eye contact. They let everyone know they understand how bad things have gotten and that they are, in a sense, willing to take responsibility for it. Fear becomes evident and paralysis sets in, killing the patient.

The small is (more) beautiful approach

Smaller agencies are hanging in there. At a time when projects are less ambitious in scope and budgets are meager, this is definitely a case where size matters. Smaller that is. For one thing, the pricing structure is more in tune with the times. Smaller agencies also offer more personalized service as partner-owners are more directly involved in the day-to-day running of their clients’ businesses.

The smaller agencies eagerly tackle assignments that are often “too small” for the larger ones.

When the recession finally comes to an end, it will be interesting to see who will be standing and how firmly they will stand.

I submit here that smaller shops will take the day.

The make-the-most-of-it approach

Finally, I’d like to share some thoughts that fall into the category of “surviving the recession,” an approach that seeks to create opportunities where there don’t seem to be any.

Traditionally, advertisers have been able to find unusual angles to present the products they manage. In an old textbook example, two writers describe a pencil. While one provides a strictly functional description, the advertising writer sees it as a “vehicle to a dream,” a “bridge to a career” and definitely a “way to someone’s heart.”

That’s called creativity.

And creative thinking could help many clients engage in a fruitful two-way dialogue with customers, a dialogue that speaks to the times and actually delivers their needs.

Here’s an example.

The mortgage meltdown sparked the crisis. Latinos, along with millions of other consumers, were lured by promises of low or no-interest loans, cash-out refinancing, too-good-to-be-true equity loans on inflated property values, and now, as millions others across the country, they are finding themselves unable to live up to their commitments.

What’s the smart thing for banks, credit card companies and mortgage providers to do under the circumstances? Send to collection? Start the threatening calls? Repossess? Foreclosure? Throw the people out into the streets to minimize their losses? Ban those customers for good, forever redlining them and stigmatizing them as delinquent?

Surely that’s one way of doing it. It’s probably the easiest way. It’s undoubtedly even mandated in the corporate manual. And in fact that’s what we’re witnessing as entire communities are wiped out, causing untold human suffering.

It may cut losses, in the short run. But is that good for business? Does it help build brands? Does it maintain a customer base?

I’d argue that more likely than not it’s a dead end. Because, if history serves as an indicator, the nation will recover from this crisis. How long will this take? No one knows. But we’ll be back on our feet.

And those people who bore the brunt of the pain will remember those who pushed them under the bus. They will say, “Yeah they made all that money from us and then turned their backs on us.”

The force once known as brand loyalty will pull in the opposite direction. Away from them.

And when times are good, they will take their dollars elsewhere. And all brand building efforts, painstakingly implemented over decades, will simply wither away, in a puff of ill will.

The “R” of corporate responsibility

There’s another way, however, and coincidentally a third “R” of this painful economic cycle. The “R” that could be the bridge between the “R” in Recession and that in Recovery, and most definitely an “R” worth rolling: Responsibility.

Corporate responsibility. It’s not a fiscal panacea. In fact, returns may not be seen right away. It calls for helping customers, extending a friendly hand, educating, creating a product portfolio designed to assist people in getting back on their feet, providing counseling, with real services – not self-serving smoke and mirrors. And this costs money. It’s called an investment.

A great case in point of this strategy was Denny’s recent Grand Slam breakfast giveaway when, on February 2, 2009, 2 million people were served at restaurants across the country, for free. A campaign that made national headlines, getting free publicity for the brand. And appreciated by customers.

Be warned that ROI on this type of investment may not be easily pinpointed. And the money will probably be hard to find – at a time when budgets have been cut down to the bone, and deeper, when the pressure to show profits is stronger than ever.

Additionally, committing to this type of plan has no guarantees of success and would require an element that’s far too scarce nowadays: courage. Courage to take a risk at a time when paralysis is synonymous with caution; and courage to realize that tough times call for new tactics.

Not only is this good business. It falls squarely into the category of Customer Relationship Management.

I remember reading a few years ago, in the midst of a far milder recession, an article about the owner of a neighborhood dry-cleaning business who offered free laundry for his unemployed customers. Asked why he was doing it he answered:

“I see it as my way to give back to those who’ve made me prosper, and also as an investment in my customers as they get back on their feet.”

Big wisdom from a small business owner.

At a time when lack of accountability, an excessively lavish lifestyle and billion dollar bonuses have repulsed the public, such gestures of goodwill may be the key to survival.

By Carlos F. Torres,
Partner, Freydell+Torres Diversity
ct*****@*********ty.com
(631) 827-1284
http://www.ftdiversity.com