If you have been in this industry for a few years, you have experienced a slowdown. Sometimes these situations are the perfect storm for dismantling good agencies. I've seen lean times ravage many agencies that were extremely healthy at the onset. I am convinced those who survive owe it to what they were doing before and during the down economic period.
My experience is that, like companies in most industries, ad agencies tend to shrink in the face of economic trials. We criticize marketers for doing this very thing. For many advertisers, bad economic times result in an immediate cut in their marketing budgets. Put in the same situation, agencies can react similarly and with the same result. When things pick back up, we have lost critical ground to the competition that saw the hard times as an opportunity.
A small agency that maximizes the opportunities during lean times can gain serious ground in achieving its ultimate goals.
Keep what you have while getting someone else's.
Advertisers aren't just trimming budgets; they are re-evaluating their relationships to determine if they are getting the most for their money. A company's dissatisfaction with its advertising becomes even more pronounced when money is scarce. Focus your agency's efforts to offer more value to your clients, and the result could be growth from new clients.
Great agencies shine brightest during dark times.
When times are bad, there is better talent available to small agencies. Due to layoffs or the fear of them, good talent can be open to working for an up-and-coming agency. Similarly, the best talent coming out of school will find fewer entry opportunities at the agencies most familiar to them. By having a presence in the award shows and industry pubs, they will find your agency a nice alternative.
Work hard even when there isn't a lot of work going on.
Staying busy is the key to getting out of the gate fast when the economy rebounds. Good employees expect to be challenged. They need to feel they are growing and accomplishing something. A slowdown in work is either an opportunity to lose valued employees or enhance their dedication to your agency's success. It all depends on how you approach the situation. One way to keep employees challenged is to use downtime as an opportunity for employees to hone their skills. For example, they can learn new software programs or improve agency marketing materials.
It is easy to become discouraged, and even a little frightened, by a bad economy. Small agencies are especially vulnerable. But much of the failure is caused not by a bad economy but by the fear of one. Those agencies that pursue their goals regardless of the economic situation will have much more success than those who allow it to dictate business decisions.