Marketers would be remiss to ignore the U.S. political events of the past week. Scott Brown’s upset victory in Massachusetts’ Senate race removed the air of inevitability from health care reform. President Obama’s plan for a tax on the largest financial institutions sent the Dow plummeting 5% across three sessions. As December home resale data proved less than stellar, the administration announced a wind-down of federal support for mortgage rates – potentially a double blow to that sector’s recovery. Let me back up: why should marketers care?
Political affiliations aside, government touches more elements of our consumer-driven economy than ever before. One policy change here, another there, ripples through the system with unprecedented speed (like perhaps, an unintended consequence). If banks feel less wealthy as a result of taxation and more limited mortgage support, the less likely they are to expand credit. Tighter credit, as we saw vividly in the fourth quarter of 2008, leads to lower business investment and greater consumer savings – starting another cycle of money removed from our economy exactly at the time it needs capital injected.
Senior leadership teams don’t want excuses, though. After two years of stumbles, most executives look to 2010 for growth. Yet the number of extraneous variables affecting that potential growth is incredibly high, hence marketers’ collective uncertainty. Just take several possible scenarios that could happen across 2010:
- The U-shaped recovery currently underway transitions quickly to V-shaped as the government spends the bulk of stimulus bill dollars
- Health care reform passes with an individual mandate to buy insurance, changing the corporate benefits landscape and take-home pay
- Certain state governments can’t balance their budgets, leading to heavy cuts in government contracting
Will any of these come to pass? I don’t know. Should we be thinking about what happens if they do? Absolutely. Two major solutions come to mind to stave off the adverse affects of market unpredictability:
1) Build an agile planning process that includes short-term scenario planning. Specifically in 2010 as the U.S. electorate gears up for midterm elections, be sure to include government action (or lack thereof) as a critical variable.
2) Determine the jobs and outcomes your customers are trying to achieve and invest smartly in forecasting how those jobs may change under each scenario.
The 2010 winners won’t be those that wrote a plan in January and followed it unwaveringly all year. The winners will be those who understand how the market changes and can react fast enough before it changes again.