These are extremely difficult times, and making it more difficult is that these are uncharted waters full of speculation, self-appointed gurus and presumptive forecasts, leaving business owners unclear on what they should or shouldn’t be doing with their business.
From our experience, the knee-jerk tendency in many companies during a crisis is to cut back on unnecessary expenditure. As many companies still see marketing as a luxury expenditure, this is often the first thing to go. The reality is that although the impact is not immediately felt, the repercussions of this decision generally play out three or four months down the line during a time when the company now desperately needs new business but hasn’t been soliciting new customers.
At Pezula 360, we are advising our clients to think of your marketing in terms of short-, medium- and long-term objectives, and know where you should and shouldn’t be making changes in your marketing strategy.
While a one-size-fits-all approach never works, there are some principles and concepts any business can apply during this current global health crisis, or any other, crisis for that matter.
We define short-term marketing in terms of one to three months, and this is where our current crisis is going to have the largest and most dramatic impact. And depending on your industry, that impact may be positive or negative, and it may be minor or major. What’s most important is to take control of things that are easily and quickly adaptable, such as social media advertising, search engine ads, video ads and other types of digital promotion that can be closely monitored and adjusted as needed.
We define medium-term marketing as three to nine months. While the changes will not be as dramatic as in the short term, your business may require some strategy adjustments to succeed.
We are recommending our clients evaluate what tactics they plan to use in the medium term, as well as their anticipated performance during this time period. Make sure your most critical product lines and services that will remain in demand during a brief downturn are the ones you are placing medium-term emphasis on. This is also a good time to focus on volume at a potentially lower ROI.
For example, while the economy was booming, many of our clients became more stringent in demanding higher ROIs. When demand is extremely high, that is a luxury we are afforded. However, as demand drops, oftentimes so does ROI. If your business can break even or be slightly profitable at a certain point, engage in as much advertising and marketing as you can to keep your volume up, even if in the medium term it means less profit. The goal during a crisis for any business is to stay alive.
We define long-term marketing as one to three years. While we don’t have a crystal ball concerning the current circumstances, one thing is clear, the world will be a different place once the Corona virus is brought under control and the way businesses engage with their customers will be different. We are therefore recommending our clients to not make any long-term changes at this point. As conditions and forecasts change, businesses should adapt their strategy accordingly, but for now most companies should hold tight and not make any dramatic changes that will hurt them in the long run.
What about your brand?
Brands have a life of their own and customers engage emotionally with their brands of choice, so it is important to look at how your brand message is relevant to the coronavirus pandemic. Many brands globally are pulling or pausing their ad spending as the COVID-19 crisis puts a strain on their businesses, but new research shows that consumers may not want them to stop advertising altogether.
While consumers don’t expect brands to abandon advertising, brands should rethink their strategies. Campaigns that were planned pre-pandemic may no longer be appropriate as consumers clamour for information about how the crisis is being handled and how they can stay safe. That includes information about how brands are responding to COVID-19.
In some circumstances, it might be best to do nothing but mostly, trying to ignore the current situation is likely to alienate your audience and project a negative message that your audience will not forget.
If we look back to advertising during World War II, many brand products were no longer available for sale to civilians.
But, some brands realised that by keeping their brand name circulating, after the war ended, they would be in a strong position to resume “business as normal.”
Right now, brands need to quickly reassess their content marketing strategy and make sure they are sending out the right message.
So what can you do right now?
To have a strategy in place that is agile and can be adapted as conditions change is paramount. Even more important is to ensure you have staff that can roll with these punches and understand what is at stake. So first and foremost communicate with your staff, clearly, concisely and honestly. You cannot operate a business if your staff are not on board because they are worried about their jobs.
How? By creating marketing content that caters directly to your customers’ needs. Give them resources that resolve their concerns. Answer their questions and put them at ease.
Serving up an extra dose of service doesn’t just keep customers onboard, it turns them into billboards for your company. When their friends and acquaintances start looking for a reliable company, satisfied customers will advocate for your product.
It might seem counterintuitive to pay for ads while businesses are shutting down around you. After all, aren’t we supposed to be cutting back? That’s the very reason why now’s the time for marketers to implement an inexpensive paid media campaign.
At the same time, people are spending more time online. You can meet more customers in online spaces where they’re spending all their time, and do so at a lower price. Pair paid ads with a valuable content strategy, and you could see more ROI than ever before.
COVID-19 is leading to social distancing measures, and millions are left barricaded in their homes. But people aren’t just sitting at home, twiddling their thumbs. They’re flocking to online sites to consume content. Now is the perfect time to set your brand apart as a thought leader.
Create webinars, podcasts, how-to blogs, and any content that potential customers could use. This will help you explain your product, position yourself as a thought leader, and bring more traffic to your site—all while your customers get smarter.
As COVID-19 spreads across the globe, different regions are handling it differently. That means some places will recover faster than others. That could be the excuse you need to set up an SEO strategy that connects with a whole new audience.
Take some time to re-evaluate your SEO strategy. You may need to start using different keywords and phrases in order to enter a whole new market. You may need to ramp up local SEO in order to serve a familiar area. Either way, a long-term SEO strategy is more important than ever.
During recessions, of course, consumers set stricter priorities and reduce their spending. As sales start to drop, businesses typically cut costs, reduce prices, and postpone new investments. Although it’s wise to contain costs, failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.
Use this time to engage your customers digitally and learn more about your customers household, needs and preferences. The first step in responding must be to understand the new customer segments that emerge in a recession. Marketers typically segment according to demographics (“over 40,” say, or “new parent” or “middle income”) or lifestyle (“traditionalist” or “going green”). In a recession such segmentations may be less relevant than a psychological segmentation that takes into consideration consumers’ emotional reactions to the economic environment.
Think of your customers as falling into four groups:
The slam-on-the-brakes segment feels most vulnerable and hardest hit financially. This group reduces all types of spending by eliminating, postponing, decreasing, or substituting purchases. Although lower-income consumers typically fall into this segment, anxious higher-income consumers can as well, particularly if health or income circumstances change for the worse.
Pained-but-patient consumers tend to be resilient and optimistic about the long term but less confident about the prospects for recovery in the near term or their ability to maintain their standard of living. Like slam-on-the-brakes consumers, they economise in all areas, though less aggressively.. As news gets worse, pained-but-patient consumers increasingly
Comfortably well-off consumers feel secure about their ability to ride out current and future bumps in the economy. They consume at near-prerecession levels, though now they tend to be a little more selective (and less conspicuous) about their purchases. The segment consists primarily of people in the top 5% income bracket. It also includes those who are less wealthy but feel confident about the stability of their finances.
The live-for-today segment carries on as usual and for the most part remains unconcerned about savings. The consumers in this group respond to the recession mainly by extending their timetables for making major purchases. Typically urban and younger, they are more likely to rent than to own, and they spend on experiences rather than stuff (with the exception of consumer electronics). They’re unlikely to change their consumption behaviour unless they become unemployed.
Regardless of which group consumers belong to, they prioritise consumption by sorting products and services into four categories:
- Essentials are necessary for survival or perceived as central to well-being.
- Treats are indulgences whose immediate purchase is considered justifiable.
- Postponable sare needed or desired items whose purchase can be reasonably put off.
- Expendable sare perceived as unnecessary or unjustifiable.
All consumers consider basic levels of food, shelter, and clothing to be essentials, and most would put transportation and medical care in that category. Beyond that, the assignment of particular goods and services to the various categories is highly idiosyncratic.
Roll with the punches and be creative
COVID-19 has been devastating, and it has already landed some heavy blows that will leave marks for a long time. By adjusting to these strange times, you can come out on the other side ahead. By rolling with the punches now, you can implement a coronavirus-focused marketing strategy that strikes back.
In closing, avoid knee-jerk reactions, make smart decisions, use data and numbers to drive your decisions and, most importantly, don’t panic. We are all in this together. Your friends and enemies, partners and competitors are all facing the same challenges as you. Keep your business positioned as best as you possibly can during these trying times, and there will be a light at the end of the tunnel. And remember that your marketing can make a tremendous difference between success and failure.