The Sars-CoV-2 is shattering the world economy with the Covid-19 pandemic. At this time, how do you sustain your business? What marketing tactics to adopt?
In the last several months, the world is engulfed by a crisis unseen by us for many decades. The spread of the coronavirus causing the Covid-19 pandemic has shattered the global market and spawned a “Great Depression” of the 21st century.
Within weeks, global lockdowns imposed by governments due to Covid-19 have pushed us into some sort of a stone age. The growth prospects that organizations and countries envisaged over months disappeared in weeks when money markets plunged to a bottomless chasm.
It’s now a constant struggle to recover. We are snatching everything in our reach to come out of this situation.
I urge you to stay indoors and take care of your health during these days. The world is fighting the coronavirus by remaining indoors and practicing social distancing.
I am a strong critic of the Trump government that wants to reopen the US economy for some people’s personal financial benefits.
How Covid-19 impacted industries
There are some industries which are terribly affected by this crisis, such as airlines, transportation, and oil.
Some others have seen positive effects on the other hand particularly due to sweeping lockdowns globally. For instance, Netflix saw over 16 million new subscribers during the lockdown.
Some industries have seen neither adverse nor positive effects. For instance, media and services companies have seen only a moderate effect. Blue Chip companies in moderately impacted sectors with good cash reserves managed to withstand this impact without adverse effects on their workforce.
Moody’s has this data on the impact of the coronavirus across various industries.
[Source: Moody’s]
We are looking at the changes in consumer behavior due to Covid-19 crisis and how you should do your marketing during a time of such serious crises.
Consumer behavior changes due to Covid-19 pandemic
One of the first things you should visualize is how your consumers’ sentiments have changed during the coronavirus pandemic crisis. This is something that EY has done in detail.
According to EY Future Consumer Index, four consumer segments have emerged during the Covid-19 crisis. And about 73% of the consumers are either saving and stockpiling, cutting deep in expenditure, or hibernating and spending. Only 26% are staying calm and not changing their spending behavior.
EY has also postulated about the future consumer after we have mitigated the pandemic.
According to them, the future consumer segments will be in the five categories:
- Back with a bang: Younger population whose lives were disrupted and they now want to spend across all categories.
- Cautiously extravagant: Will spend in what is important to them, but is worried about a global recession.
- Stay frugal: This category of consumers are pessimistic and want to keep spending less.
- Get to normal: They are not concerned about their spending behavior.
- Keep cutting: They are out of job and have grim prospects; so, they will keep cutting.
McKinsey & Company has tracked consumer behavior across 40 countries. According to the research, optimism in economic recovery is prevalent only among respondents from India and China.
Most consumers across all the countries surveyed expect their income to decrease.
Households are planning to decrease spending in most economically developed countries. Only in some countries, such as Indonesia, Saudi Arabia, Brazil, and Portugal, people expect to increase spending.
According to the research, the user adoption is increasing on online streaming, e-sports, online games, grocery deliveries, video chatting tools, online fitness apps, etc., due to the sweeping global lockdowns that threw 4.5 billion people into lockdowns. This is shown below.
[Source: McKinsey & Company Survey on Global View of How Consumer Behavior is Changing Amid Covid-19]
If you are in any of the domains above, consider yourself lucky at this time.
Marketing recommendations for Covid-19-affected businesses
Most businesses are confounded about what to do in terms of marketing during a crisis like this.
You should analyze your situation objectively and understand the merits of your response. The following recommendations are based on solid marketing foundations and will work for any recession or crisis situation.
1. In-depth customer research
Above, we saw EY and McKinsey & Company analyzing the global impact on consumer behavior. What about your customers? A look into how they are coping with the crisis is essential.
Many customers are purchasing your products not only due to your brand’s reach and appeal but also because they have a necessity and disposable income. Even Apple and Coca Cola have consumers who don’t care about those brands.
Don’t believe a huge chunk of your users will continue to buy when they have limited disposable income because they are attached to your brand.
That would be complacency — the most foolish thing you could do in a situation like this.
Instead, look at your analytics to learn why your customers are buying and what would make them continue to buy from you.
2. Instead of cutting marketing budget, focus on branding
If you are in an impacted sector, you are probably not going to see normal sales for quite some time. Your first instinct may be to cut costs and reduce spending on expense accounts.
First thing that comes to your mind could be marketing, the one expense center that you are sure is not going to help you with revenue. Because, if customers are not interested in buying, what is the point of marketing to them, right?
Wrong.
A function of marketing that is equally, if not more, important as customer acquisition is branding. Branding is a key activity that keeps your company alive in the minds of your customers.
A good example is Netflix, which spent on branding itself as the numero-uno digital entertainment platform. When the lockdowns were imposed and people were desperately seeking a good avenue for entertainment, they impulsively gravitated to Netflix, and as a result, massive subscriptions came to the platform.
You should spend on branding efforts in anticipation of the rebound post the Covid-19 crisis. While the economy is coming back to normalcy, customers are only going to remember the brands that kept communicating with them.
3. Emphasize the human side of your business
The coronavirus has swept the world, and over 200,000 people have died. The time is grim and exceptionally hard for all countries and populations. At this time, you cannot make sales pitches or take advantage of the crisis. That makes your brand look terrible and inhuman.
Instead, embrace human values of your organization and emphasize them in your communications.
For instance, if you are doing CSR activities, it might be a good time to showcase them through your social channels. Showcase how your employees are practicing social distancing and working from home, helping all of us fight the pandemic.
Any activity that you do to help your affected local community is worth talking about.
While having said that, do not publicize any of your financial contributions to the relief funds or charities. Do not bring business flavor to your language.
4. Become an informed friend of your community
Organizations can be valuable to the community in multiple ways. One of them is as an information resource. If you have done in-depth research on how people can stay safe and healthy during the crisis, take an effort to showcase that.
If you have in-depth research on how the industries you target should act during the crisis, showcase that as well. This is something Accenture did through their Covid-19 impact newsletters and through their industry impact reports. While their reports and newsletters have calls to action that will help them gain some leads, it’s the value delivered through their reports that drives the engagement. And this way, the brand has come out as an informed friend of the community.
It’s not a comparison, but IBM’s Covid-19 impact page is largely a sales page that takes users to their business solutions, Watson Assistant registration page, and a lot of other B2B sales pages.
There are a large number of companies that exploit the crisis to bring in business, powered by data. Refrain from doing that.
5. Hiring or laying off?
Most companies are laying off employees or suspending them due to cash crunch. According to the International Labour Organization (ILO), the job loss impact due to coronavirus Covid-19 could be as much as 195 million jobs.
Also, this is a situation where most companies expect to downgrade the salaries of their employees and send them the unnerving news of annulled hikes. Some are even withdrawing job offers.
Are you in bad shape? If not, then stick with your employees.
But this situation affords a unique opportunity too — that of hiring the workforce laid off by other organizations.
If you are setting up proper hiring plans during the crisis, it could be a win-win situation. You could close a set of positions without having to pay premium salaries. Moreover, your new hires could go on to become loyal employees. Who wouldn’t love the brand that came to their rescue when they were laid off?
6. Don’t do a CEO salary cut publicity stunt
It’s public knowledge that impacted companies have to cut salaries and jobs. But is it really required for the CEOs to publicize that they are also affected by salary cuts?
If you are a CEO, it might seem logical and good-natured to assume that people will take it in the positive sense if you publicize the fact that your salary is also affected when a majority of your employees are being laid off or given salary cuts.
But, wait and consider it again.
Already, the CEOs who have publicly announced their salary cuts are drawing flaks.
Why?
It’s almost common knowledge that a million or two of cuts in a CEOs’ salaries are not gonna really affect their financial position. In fact, it’s possible to anticipate that the cut would increase the goodwill on the brand and cause a positive stock movement, thereby compensating them immensely later on.
So, this publicity stunt is a no, no.
7. Don’t mistake the downturn for a lack of market and reinvent your positioning
When sales dwindle, most marketers worry that the market segment itself has disappeared or is in downturn.
This is true in case of the old DVD lender Blockbuster Video that tried to stick with the DVD lending business even after clear signs of the market’s disappearance.
In case of a recession, that is not the case.
The market is still there, but demand is disappearing due to recession. So, there is no need for an attempt at reinventing your product’s positioning.
New positioning requires you to spend millions in marketing. You may very well realize that it was all for a non-existent market. Also, when your original market bounces back, you may no longer be in the game.
So, during a recession like Covid-19, do not try to reinvent your product or service’s positioning. While it’s perfectly normal to keep analyzing your market, avoid making wrong conclusions based on insufficient data.
8. Revisit your pricing and provide offers
A market downturn such as Covid-19 causes costly products being replaced by more affordable products from less known brands. In essence, if you are a budget brand focusing on quality, you may see improved sales during recession times.
To keep your business floating, revisit your pricing strategies and look for ways to include deals for your customers. Initiate short-term sales, distribute coupons, and provide discounts.
9. Cut down on marketing experiments
Have you been planning some marketing initiatives before the coronavirus hit the industry?
While it’s wise not to reduce spend on marketing, it’s also wise not to invest in unproven tactics and strategies.
As always, every marketing activity is measurable. You need to be able to show its effect through some tangible metrics. When the market itself is in a severe downturn, it’s impossible to test the efficacy of your strategies as you don’t have sufficient data.
So, stick to the tried and true traditional strategies that you have and avoid funding experiments.
10. Update your services
Be quick about bringing in changes to your services to meet the state of affairs.
For instance, Uber stopped all the regular transport services when the lockdown was announced in India. As the situation progressed, there was a demand from people to go to hospitals. At this time, Uber came up with the special emergency service that allowed transporting people to and from hospitals.
Another great example is Zipline which expects to bring drone delivery of medical products to the US.
These companies show acumen and agility in bringing transformative services that help people during a crisis like this.
11. Explore digital marketing
If you haven’t checked out digital marketing for your business, this is pretty much a good time to do that. Covid-19 has brought more people to explore web-based tools and technologies. Millions have gravitated to online platforms for news, entertainment, working from home, product deliveries, and healthcare.
So, the online market for products and services will see a massive uptrend post the crisis. Explore ways in which your brand could use the various tools and techniques of digital marketing.
A key area in which digital marketing is making its presence felt is among events. Many events that were physical until 2019 have now a digital facelift for them. They are now being run as “virtual events.” Some of the virtual events this year are Social Media Week, MDMC, and Apple’s WWDC.
Conclusion
Crises like Covid-19 are completely unprecedented and unexpected. It’s very difficult for global marketers to adjust to a crisis like this in such a short period. However, adjust you must!
Let innovations come when they can.
Today, be nice to your world and do what you can to help the people.
Marketing is all about personal relationships — how the people behind a brand communicate with the people consuming the products. Once you imbibe the wavelength of your customer, you can stay strong in any crisis.