Right now, marketers are beset by reduced budgets, lack of actionable data about customers, and rapid demand & media habit changes. Data, assumptions, models, and plans older than 45 days are redundant. Now is the time to prepare for the ‘known unknowns’ and pivot rapidly.
We are living through a generational spike in uncertainty, volatility and complexity. No one knows the full human toll and economic costs of SARS-CoV-2 and the disease it causes, COVID-19. This demand collapse is deep, sudden, and touches so many industries a global recession seems inevitable. Consumers are using products and services they haven’t previously, and necessity is driving them to new paths to purchase. According to the science of pandemics applied to current data, infection rates will keep going up so assume significant impacts on the concerns, moods, and the economics of your customer base. They will engage your brand differently, if at all. The ‘old’ norms around brand preferences need stats and price sensitivity requires a new lens.
We recommend you transition rapidly and thoughtfully into the ‘new normal’ using early data and existing insights. Here’s how.
Assess your situation, rapidly and accurately
At the risk of being dramatic, this is a survival situation for many businesses. One of the first things to do in a survival challenge and preparing for the ‘known unknowns’ is to deepen your situational awareness.
- Look for analogous situations that inspire your response options. For example, case studies from brand behaviors in the last recession or in the aftermath of 9/11. An article in Harvard Business Review from 2008 argues for spending in recessions: “It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at a lower cost than during good economic times’. Also, consider cases of ‘forced trials’ i.e. customers trying competitor brands out of need: will they bounce back to you if they have a positive brand experience elsewhere?
- Consider digital business model acceleration, product, partnerships and distribution options: Go beyond communications and start asking yourself: how fast can you ramp up your e-commerce capabilities? What product/service modifications can you pivot to? Can you partner with ‘complimentary’ brands to literally deliver your value proposition differently and address current customer needs?
- Revisit the basic heuristics of price sensitivity and segmentation. Heighten your sensitivity to both. How much of your business was driven by consumers/segments that are quite suddenly trapped at home? Unemployed? How intense was price/value competition prior to the pandemic? Does your current marketing spend keep you appropriately messaged and top of mind to prevent leakage to competitors for key consumers? Broadly, maintaining investment in brand to support the value proposition can mitigate price sensitivity.
- Assess whether you are using the right marketing channels to communicate. Current media data is clear on short-term consumption shifts, your channel mix also needs to shift. Millions of your customers are at home driving the 30%+ spike in television viewing globally. Viewing has shifted to general entertainment, given the lack of sports programming. Consumers are reporting much more streaming since the outbreak, films and TV shows are up 60%+.
Act now, triangulating with your best judgement
Most businesses are acutely focused on cash flow. Demand plummeted faster than many cost structures could withstand. In this harsh new reality, how much of your marketing and media investments are being eyed by your CFO?
If you can maintain marketing investment we recommend:
- Ensuring that your in-flight messaging is appropriate. Dig deep into every crevice of your messaging and review, review, review. Is your ‘old’ message appropriate now? What should we be communicating? What impact will your messaging have on brand perception?
- Optimizing the channels you use. Not all marketing spend can pivot on a dime, but media consumption habits have been forced to shift. For example, while TV dollars are likely pre-committed, Digital, Paid Social, Paid Search can be adjusted quickly. This logic needs to be applied to your entire mix. Before you shift or reduce however, you must consider if you can serve short-term demand spikes, like in-home delivery, or if you are effectively at a stand-still, example you are an airline.
- Using the channels with demonstrated prior strength until the fog lifts. Perfect is not the key objective right now, presence is. Monitor closely any potential drops in CPM across your marketing mix because some of your competitors might be forced to pull back. Marketers willing to spend more with their partners are likely to benefit relative to those who cut, just as they always are. Although it seems a long way off, H2 spending also needs to be a consideration in your revised plans.
Look forward to re-igniting demand.
“This too shall pass.” said Abraham Lincoln.
COVID-19 has disrupted demand as we knew it and will re-write business models. It may change forever how we market to, engage with and deliver our value proposition to the customers we have and the customers we want. Events like these have real impacts on consumer confidence and therefore, habits. To get ready for the coming new normal, you must immediately think about the long-term effects of your actions today on the brand. In fact, 93% of consumers believe that brands should “stand up and help.” If your firm can do something to help the current crisis like donations, make those socially important actions and values part of your narrative. Consumers have a long memory of these things and almost all of them have more time on their hands to watch what you are doing.
By adjusting and adapting now, you will be ready to capture demand when it comes back. Let’s hope it comes roaring back soon.