Marketing strategy for the corona era
We are heading into a recession. Although the marketing industry has been surprisingly fast to adjust to the new and unknown situation (and consumer optimism is finally on the horizon), marketers are facing completely new conditions going forward. What does communication look like during this global pandemic, and what will be the most effective way to adapt your efforts to the new normal?
#covid19 #crisis #marketingstrategy
To start with some perspective, a recession often is separated into three major phases:
The immediate crisis where projects are postponed and we realize that things are going sideways
A recovery phase when we look into the forecast and try to act on a variety of scenarios
The “New Normal" in which we have overcome the crisis and find ourselves in a different state
While a lot of things are uncertain at this point in time, one thing is for sure: It takes a long time to recover. In this period what should then be our approach to marketing communication?
Invest in share of voice to drive stronger growth during a recession
A study from Havard Business Review analyzed strategy selection and corporate performance during the past three global recessions: The 1980 crisis, the 1990 slowdown, and the 2000 bust. With over 4700 companies included in the research, they found that cutting marketing spend, the most normal action in a period of crisis, can be fatal for your position in the market going forward.
The companies that outperformed the market selectively reduced costs by focusing more on operational efficiency than their rivals - even as they invested in the future by spending on marketing, R&D, and new assets.
So it's a matter of finding the right investment balance - and it's absolutely critical that your brand does not stand completely still.
Another study on past recessions found that brands who maintain or even increase their ad spend gain an average of 4,5% market share. While most brands cut overall spend to reduce costs and increase short term profit margins, increasing your SOV will help you gain market share over time, as competitors’ inclination to cut costs presents a chance to grow.
Brands will continue to face challenges, highlighting the need to consistently review and reprioritize their strategy throughout 2020. Many businesses have already adjusted their marketing strategies and changed their messaging over the past months, so what exactly should we focus on in the short- and long term?
Find the right mix between long- and short term
When a crisis enters the usual action is to focus on tactical sales activation to drive short-term results. While tactical sales activation will reach potential customers now, strategic branding will create potential customers in the future. So the brand is not less important during a recession, and short-term activation makes much less sense when the demand cannot be met or does not exist. Becoming too short-sighted might even be hindering your long-term success, as no one can afford to execute such a long recovery phase as a short-term sprint.
This means that we need to find the right mix between long-term branding building activities and short-term sales activation, as this will ultimately build momentum when things get back to (somewhat) stable conditions.
A report from consultant Peter Field and the Institute of Practitioners in Advertising (IPA), suggests that the optimal balance between brand building activities and sales activations for campaigns between 2004 and 2016 was 76% and 24%.
So instead of focusing our efforts on one or the other, we should rather try to connect the marketing funnel with a primary focus on broad, emotional brand-oriented messaging (76% of spend) that is followed up by more rational messaging in tactical conversion (24% of spend).
Focus on "new" customer needs
The crisis also calls for a hyper-focus on our customers. Think about it. Your best customers are very expensive to replace. Rather than risk losing them to the pressures of an economic downturn, focus on the unique value propositions that will increase their loyalty.
The value proposition must match your customers' needs. Looking at Maslow's hierarchy of needs, COVID-19 has forced consumers to think of their security and social needs. This might be needs such as safety, employment, family, friendships, or intimacy. This makes emotionally resonant marketing that speaks to these needs more effective.
Source: Peachy Publications
Start your marketing planning process for COVID-19 by thinking about your customers’ changed needs mapped against Maslow's hierarchy. As a brand addressing the needs in the bottom and middle of the pyramid, you should go first and be bold, while brands towards the top might want to enter more carefully, as the demand is not as present during this time.
The best way to emphasize your value is often simply to get hyper-focused on your core competencies. The more specialized your offerings are, the harder you are to replace. Brands that utilize this play are better suited to withstand a recession because their customers are less likely to look elsewhere to fulfill their needs.
Tell relevant authentic stories
Impressively, some brands have already produced compelling campaigns that speak to the realities of the pandemic. Dove, for example, created the spot "Courage is Beautiful" to shine a light on the courage of health care workers.
The video shows powerful photos of medical professionals with visible marks on their skin from their protective gear - symbolizing the many hours that healthcare workers are dedicating to their communities during the coronavirus outbreak.
I think it’s great to see creativity in storytelling at this time, but marketers must push their companies to do even more. This is the time to pay it forward and provide as much value as possible to your customers and communities. Try to do something that fits with your brand and that will genuinely make a difference in people’s lives. Communicate it with pride but also with humility, sensitivity, and in a way that is authentic for your brand.
To sum up, these are a few of the recommendations when it comes to marketing strategy during the coming recession:
Don't hold back. Invest in SOV to drive stronger growth during this period
Find the right balance between short-term activation (24%) and long-term branding (76%)
Focus on security and social customer needs during this period
Tell relevant, authentic stories and give what you can
I hope you found these tips useful. I have talked about a few different topics in this post - here are some of my further readings:
COVID-19: Thoughts on Digital Transformation during COVID-19
Crisis Management: How you should communicate during a crisis
Consumer Behaviour (B2C): How to manage challenging consumer behaviour
Consumer Behaviour (B2B): B2B selling in the age of the informed consumer
Brand Authenticity: Why brand authenticity is important