18 August 2020
What do you have that other people want?
Businesses seem to have fallen into three categories over the last few months. There are those whose marketing departments seem to have adopted radio silence, there are those who have put information out on the pretext of being helpful but have shown in their follow through that it’s only skin deep. Then there have been those who have put information out and been transparent about how they are handling things – even when it’s hard. They have shown they care about their customers and do not take them for granted. Bravo!
What you do now will shape your success for years to come
Despite this success, I suppose it was inevitable, but figures are beginning to show that more than half of companies are planning to cut marketing jobs over the next three months as the furlough scheme comes to an end. The extent to which those predictions end up coming to fruition remains to be seen. However, if you are a business leader in charge of a company, now would be a moment to pause for thought and answer these marketing questions. Who are your Covid Era customers, what do you have that they want, how are you going to tell them about it, and how are you going to deliver your offer?
Tried, tested and worth thinking about
The value of marketing is often underestimated. So often I have walked into a boardroom, as a consultant or non-executive director, to find that senior leadership are either not making the most of this valuable resource, or have not fully realised the intrinsic role that the discipline plays in generating sales and building long term shareholder value. That said, those in marketing circles will be familiar with the statistics that show that companies that continue to invest in marketing activity in economic downturns tend to fare better and recover quicker than those who don’t. Meanwhile, those who have invested in building strong brand reputations tend to hold up best in recession overall.
This isn’t a one time phenomena, but one that has spanned the decades. For example, an article on Forbes cited that during a recession in the 1970s and at the same time the US government issued its first miles-per-gallon report in which Toyota Corolla was second to Honda Civic in fuel efficiency. Toyota was experiencing strong sales when the economic downturn hit, so the temptation was to drop their ad budget, which they resisted. By adhering to its long-term strategy, Toyota surpassed Volkswagen as the top imported carmaker in the US by 1976.
Equally, in the recession in 1990-91, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.
Changing circumstances mean changing consumer messaging
At this moment in time, we are all battling a five month period in which many people have not worked and many companies have not sold or produced the items and services that they normally would. The markets have changed, consumers’ attitudes have changed, and goodness knows the business climate has changed. So while you might be looking to cut costs, you should also be looking to continue to make strategic changes and strategic investments.
The truth of the matter is that your old Pre-Covid messaging is unlikely to cut it right now. You will need to think about how your clientele has altered. What do you now have that other people want? What is it that you offer and how do you offer it in the new context? What are you doing to reassure people about what you do and how you do it in a Covid secure way? Are your clients scared to come to your physical locations? Do you need to target a new audience as well as re-engage with your traditional customers?
Marketing is not just skin deep
Your marketing strategy is not just about the artwork that appears in ad campaigns, but about protecting brand value and making sure that your messages and relevant values run through all communications and consumer processes. For example that means the way your customer service team handles complaints and refund requests when Government policy turns on a dime in response to Covid-19. It also informs how and where you place information on your website so that people feel that you are being transparent, open and honest, and that your communications have integrity.
What you do now will shape your success for years to come
Of course we should all be sympathetic to the challenges that organisations both large and small face. We may think that one organisation has so much money that our refund doesn’t change things for them, but we can all recognise that most businesses don’t keep enough cash in the bank to go five months without income and to refund two or three months of previous sales at exactly the same time.
I think despite deep frustration when our travel plans are not refunded in an instant and instead take a few weeks, most of us are pretty reasonable as long as we feel that individuals and organisations are being genuine and open with us. The problems really arise when communications go wrong and we think that a company is being disingenuous. Behaving with integrity towards your customers is key.
A key differentiator will be the way some businesses have communicated with their clients over the last five months. This will prove to either be more damaging or more meaningful than almost anything else they do. Their approach will have lost once loyal customers overnight and other businesses will have won others for life.
In the words of the omniscient Warren Buffet:
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
So absolutely, think about who and what you need in your team to survive and thrive. But in doing so, think about how you market your business, your strategy and about how it carries through to all areas of your business. Whatever you do however, think twice before you dismiss your need for members of your marketing team and think more about how you can use them strategically to build trust, build brand value and best position yourself for recovery.