How to Build a Market-Fit Product in an Economic Downturn
A recession has a funny way of showing people that some things are broken, and sends some looking for solutions.
During a financial crisis, it is pretty common to see companies struggling, funding drying up, projects getting cut off, and people tightening their belts. Conventional wisdom says a recession is the wrong time to build and launch a product. Stick with the tried and true, focus on customer loyalty, and retain as much business as you can. Some might even argue to trim the product line, focusing solely on the most profitable items. But while this advice might make sense and is purely practical, consumers who drive the economy are not entirely practical, even in a downturn. Sure, folks worry, but that worry can lead them to look for new, innovative solutions. And they also hope, which can trigger acceptance of a new product that brings a bit of excitement.
If you’ve got an innovative new product, you shouldn’t be discouraged by our current economic malaise. If your product is right for this moment, offering solutions that consumers are looking for, it can still enjoy a spectacular take-off. On the other hand, if you delay the release, you might find that the moment for your new product has passed you by.
This is the time to ask yourself…
How can I make this recession the luckiest thing that ever happened to my business?
Having survived two recessions, our experts have devised a guide to help you answer the above question. Here are a few things you can do to do to build a market-fit product during an economic downturn.
1. Embrace Technology
New technology doesn’t hold intrinsic value and should never be adopted for the sake of adopting it. However, technology is advancing faster than ever, and ideas that would have been unfeasible five years ago are now waiting to be turned into new revenue streams.
While consumption patterns change in a recession, consumers still expect brands to create delightful experiences for them. This is where emerging technologies can prove to be cost-effective instruments.
2. Set Clear Targets and Success Criteria
This will help you identify the projects that aren’t showing any promise or progress. They could happen for a number of reasons: a competitor does something unanticipated, the technology doesn’t quite work as planned, customers react in an unexpected way, or a key partner decides not to participate. Once you develop a clear roadmap, the team members will know if the project has left the rails and can put an end to it before it eats up more resources.
3. Put Your Money on the Value Proposition
As consumers, we are creatures of comfort. We constantly acquire new tastes for quality, design, discovery, experiences, and self-expression that go beyond mere function. What lies ahead is not the undoing of all this, but a fundamental re-weighting. Keeping this in mind, you need to rediscover a fascination with the foundations of creating value. This means that new offerings need to more overtly deliver a difference, a better day and a better lifestyle in ways that strike just the right chord of human emotions. You need to think through your product’s value proposition and make sure it is:
- Enabling users to become heroes when they may feel financially inadequate
- Helping people feel in control in a time of instability and external stresses
- Offering to find simplicity in the face of hyper-stimulation
- Elevating quality of life with the family, friends and communities that matter more than money
- Managing the scarce time efficiently
Through it all, the value proposition needs to ring true with renewed clarity. The belief that all consumers will now rush to buy on the cheap and swear off great quality and complete experiences is nothing but a myth. Great value has never been synonymous with value pricing. But you will undeniably have to work harder at earning premiums in a world that will no longer think something’s valuable just because it’s expensive.
4. Reassess Market Trends
In normal times, innovation’s enemy is inertia – consumers feeling content in their habits, ways, and brands – reluctant to open themselves, even to things that offer something better. Recession can completely topple this notion. This is a moment for reassessment of products and services that seem solidly tucked into people’s lives and gently nudge them out by bringing the right alternative. So you may not have to work so hard to create doubt about the status quo in tough times; it’s already there. Your innovative idea may be pushing an open door.
5. Offer Benefits Beyond the Individual
Consumers have increasingly been splurging on themselves. As mentioned above, recession will make us more hesitant to treat ourselves without justification. Extending value beyond personal benefit and for the larger community can be that justification. Whether it’s about a happier family or a tighter social network, a healthier planet, benefits beyond the individual will matter more and more. The paradigm will be shifted to ‘me and them’. This is also where you can change your brand statement and messaging to empathize with the user beyond earning profits from them.
6. Rethink Growth Platforms in a Shifting Market
We instinctively think recessions change what and how much we buy. However, they can trigger equally extreme shifts in where we buy. The risk is that the product portfolio you hone for a certain platform can become a lot less relevant overnight. This is why you need to look at your products and services portfolio through a new lens. Are your offerings set up to effectively compete, win and grow on your current platform? Will they create value in this new context? Will they get noticed the way they do? How will they win in digital channels? Focus on creating new offerings from a blank page, purpose-built to win on the platforms that are poised for growth in the changing market.
7. Start User Research from Scratch
If sitting it out is not the solution, what is? The classic digital disruption dynamic – move or be moved – applies perfectly to economic downturns, since it’s not only your landscape that has changed; it’s the landscapes of your customers and competitors too.
Take all the insights you’ve learned from years of mining the hopes, needs and behavior of your customers, shove them in a back drawer, and start over. In many organizations, the data of customer understanding and the consensus built around it can become obsolete. You need to look for meaningful changes and opportunities rooted in the newly emergent mindsets, needs and pain points. The legacy insights may be timeless for the core of your category, but what new themes are emerging at the edges where most growth happens? Charter a consumer discovery team with no vested interest in the old view, ensuring you get an unbiased take on the new reality.
8. Partner Up
Organizations can increase their chances for success by partnering up with subject matter experts. Bringing in external partner(s) with different ways of working, fresh eyes and perspective, and cross-industry expertise can be particularly helpful when aiming to build a future-proof product.
These eight pathways are a starting point for how you can make a bad time the best time for your company to prosper.
The good news about building during a downturn is that consumers are actively looking for solutions to problems. If your product fills an acute need, they’ll respond, and they’ll help spread the word to other consumers with the same concerns. This is the moment to chase new openings, many of which could only have been born in this moment.
Let us know if you want to make it happen and we can get you on the right path!