Fear plays a major role in our purchasing decisions. It’s a big headache for businesspeople, because it’s a feeling that comes up for different reasons in different people, and it has to be managed in different ways. A critical factor in an economic crisis is how fear is managed by those who influence economic decisions. Usually, companies wait for a centralised solution, but those who are smart enough and good enough strategists know that they can stay ahead of their competitors if they wake up first and manage fear at their own level. We just have to be careful, to be fair!
Diplomatic fear management
What is a crisis for one is an opportunity for another. The new generation of managers learnt early on that they would not have had much chance to succeed in peacetime, as the older generation has a big advantage just by virtue of time in business. A big breakout opportunity for this generation, then only in their 30s – Diplomats (1973-1984) – worldwide was the Great Depression, which triggered a major shake-up in the world’s consumer markets in 2008. This generation then entered a very positive spiral, as they moved into more senior positions, generating more disposable income to spend, and thus tended to push the premium market in more business sectors. Because they were no longer just earning their money, they wanted to spend it and enjoy the wealth they had acquired, and in this, they were generally a generation ahead of the managers of the previous period. This spiral has created new businesses, new demands, and those who have set their sights on this consumer group have certainly not been wrong over the last ten years. Of course, you had to understand their language and really know what they wanted. Thanks to continuous development, they have not developed a great deal of fear, because they have always been able to make progress to a greater or lesser extent. This is mainly due to the fact that they are more proactive and communicative than their counterparts of the previous generation, and also very strong in persuasion and diplomacy. In 2008, they took advantage of the hesitant behaviour of more introverted, more security-oriented companies, which therefore tend to live in a routine and develop in a routine way. The inability of most of the very successful companies at the time to react to anything, as many at the ownership level were failing in the financial markets, and they carried this fear forward into their companies. This created an interesting situation as early as 2009, when it became clear that for some businesspeople, the crisis was a serious opportunity, while the majority were terrified of what was to come. Nothing happened; it was simply the end of an era in the world. An era when routine worked really well and novelty and bold strategies were not yet present in our lives, or at least very rarely. Even then, it was clear that fear spreads faster than wildfire, and it was also perfectly possible to see that those regions and countries that did not manage to deal with it were certainly affected by the crisis for years. Consumers locked themselves in; they kept their money and, even if they were not at all affected by the damage caused by the crisis, they already knew of a person or a company to whom anything bad had happened, and it was immediately recorded as generalised. Reactions to the fear varied from firm to firm, and we can now say that those who reacted well at the time were assured of a good decade of business, as the market shares they had then were able to grow steadily.
Response to fear
What was the right response nearly 14 years ago? There are two aspects to the question. The first is certainly to whom or to what consumers, whether B2B or B2C, project the situation in such a situation. If there is a crisis, and in addition, a large “real estate and financial bubble” is behind the crisis, the market reacts immediately by pushing away everything that is about persuasion and influence. In other words, what is traditionally called the “good sales” habitus can be a killer in the market. People tend to blame the crisis on the fact that the decision-makers in their positions were bunglers, i.e. they didn’t know their stuff, and that’s why everyone is suffering. The first rule of thumb for fear is to always act contrary to the beliefs of consumers in a crisis in the market. In other words, if everyone blames the ‘half professionals’ for the losses, then you have to act as a very, very strong professional in the business. It’s easy to say that, because if you are not, your company is not going in that direction, and then you are in trouble. That’s why so many businesses have embarked on a “new strategy”, which in most cases was not really about anything other than adapting content to fit the outside. That’s the way things should work by default, says the common man, but before 2008 the whole market was used to everyone telling more than the truth anyway, so they just went right to the root of what they were saying. Of course, if someone told the truth and no more, it was not good, because after the root was extracted, he was surely left behind the “fibbers”. The other basic rule in a situation of fear is that reacting in the opposite way to the crisis is only the first step. In all cases, dominant action is necessary, because, without it, the market will not believe that the company can really change the circumstances. Strength is a very serious weapon, which must be used with caution, of course, because it can backfire. Many companies fell into the trap of using force to move products and services during the apathetic period of 2009-2010, but when the economy began to settle down, they were increasingly dispensed with because of their unsympathetic behaviour. It was a bit like, of course, it’s a big situation now, I need you, but as soon as things settle down, I’d rather you go away because I can’t stand to see you anyway. After the Great Recession, it was the companies that survived and were able to grow steadily, where consumers found professional strength. And although they were not necessarily the most empathetic or the friendliest, they could always be counted on. They were measured, calm and put a perfect job on the table.