Last August MI built its "Recession-Proof Index" (RPI) based on the premise that in every recession certain groups of people suffer more than others and certain areas suffer more than others. At the time many commentators were argueing that this recession would be "different", that it would hit middle managers more and London more than has been the case in the past. Naturally we begged to differ.

 

Back in September 2008 unemployment was restricted to a few black spots, the old industrial cities of the Midlands and North, Wales and Scotland. Everywhere else enjoyed near full employment. But by April 2009 the picture changed enormously with hardly any areas not affected. We have taken the unemployment charts for the period and compared them to the Recession-Proof Index. The results show a remarkable correlation and provide a fascinating insight into how the economy in the UK is geographically non-homogenous. What the charts don't show is that this recession, like its predecessors, is hitting manual and unskilled workers hardest - despite the chuck out of bankers in the city!

 

There's not much doubt that we are through the worst - now the time comes to take advantage and in the same that the RPI forecast the spread, it forecasts the areas where recovery will happen first. However the RPI is not just an area forecast - it is based at a household level - providing a ranking for every house in the UK.

 

1. Loyalty
   Brands cannot assume that if they cared for consumers during the recession - like supermarkets with their quality-at-interesting-price points - that this will carry them through after the recession. Loyalty will need to be rewarded and re-won every day with reward points schemes, personalised discounts and targeted on-to-one one communications.
    
2. Price
   The thrifty "make do and mend" mindset that has galvanised consumers across the spectrum will not disappear post-recession. Right across the spectrum consumers will emerge from the downturn more aware and knowledgeable about the price-value equation. This means that brands will need to be transparent about costs, highlight benefits and revisit all-inclusive and package deals to lock consumers in at a good price.
    
3. Service
   Exceptional customer service will be the making or breaking of brands post-recession. Bounce-back behaviours will be characterised by a willingness and ability to look elsewhere for better customer service experience for consumers dissatisfied on any level. Personal recommendations will be critical to out-performing the competition in the toughest markets.

So how can Brands fight back? The short answer is that they must take the fight to the consumers - to try and win back trust. Doing this via traditional routes will prove time-consuming and expensive. Which is why so many companies are now increasing their investment in their customer data. Audi, for example, has recently launched an offer for anyone who needs their Audi MOT'd - they can have it done for free in return for their name and address AND permission to market to them. Given the cost of an MOT, this is a quite remarkable offer - but a very smart one none the less as it will give Audi direct access to all the people who have 3 years or older cars!