OPINION: Marketforce chief executive Adam Marshall, who spoke at the inaugural BN marketing and advertising webinar today, mapped out the three key questions organisations need to ask when they evaluate their strategy.
COVID-19 has wreaked havoc across our economy. Although a few sectors are achieving record growth rates, these are for the most part in reaction to the crisis and will be short lived. For most businesses, the disruption is immense and for many already catastrophic.
This crisis is unique. Consumer demand has been disrupted for reasons outside of the normal ups and downs of the economy. With whole sectors forced to shut down and mass unemployment growing, many businesses are questioning what their future looks like.
It is right to ask questions of marketing at this time. Should organisations be promoting themselves while so many people are dealing with the impact on their lives and finances?
There are no absolutes in answering this question.
Each organisation should make decisions based on what is happening in their respective fields and business. However, there is overwhelming evidence that investing in marketing during periods of economic downturn pays dividends both in the short and long term.
To start, you need to ask yourself three questions.
First, is the virus affecting our ability to service our customers? Second, is customer behaviour changing? And finally, what expectations do our customers have of us?
Understanding how the crisis is affecting your customers will shape the nature of your response. For many brands the first barrier to overcome is one of anxiety. Individuals want reassurance that you are going to put their welfare first.
There are many examples of how organisations have changed their operations in the face of the virus to allay customer fears. Communicating these changes should be done directly, authentically and honestly. People want to know what you are doing, so the normal apathy that effective marketing needs to overcome is less of an issue now.
Tone and empathy are critical. Be clear, concise and provide proof. This can be done with messaging provided directly from a spokesperson. Or even better, from a stakeholder or customer. Testimonials from real people carry a lot of weight for consumers right now.
Once you have reassured and re-engaged your audience you can start to promote and stimulate demand. Again, the rules have changed so the normal mechanisms may no longer be relevant. Now is the time to be true to your brand’s purpose. You should communicate your purpose and why it is of benefit to your customers.
Creativity is essential. People want opportunities to escape, so the more creative and engaging your communications are, the greater your share of attention.
Media weights and channels should also be scrutinised. An important metric is ‘share of voice’. If your objective is sales, then you can afford to proportionately reduce your media weight if your competitors are doing likewise. Your relative share of voice will have a direct impact on your future 'share of market'. If your share of voice is greater in your category than your share of market, you will grow relative to your competitors. The converse is true, so any cuts in expenditure should also be considered in the context of what your competitors are doing.
These techniques have been proven time and again.
As Walmart founder Sam Walton once said when asked about recessions: “I thought about it and decided not to participate.” Although the natural inclination for advertisers is to cut back on advertising during a recession, those brands that maintain their advertising budgets will get a long-lasting boost in sales and market share.
Historic examples include famous brands like Kellogg's, which during the Great Depression overtook Post as the category leader. Prior to the crisis, Post was the number one cereal brand in the US. However, the company chose to cut its marketing as the economy moved into the depression. Kellogg’s, on the other hand, chose to double its advertising spend, investing in mass media channels. Profits grew by 30 per cent, enabling Kellogg's to take the position of market leader, a position it has maintained to this day.
Regardless of the current challenges, it is essential that all brands start planning for recovery now. The most resilient companies, those that bounce back from a crisis quickly and strongly, spare no effort in planning for their short-, medium- and long-term recovery.
There will be opportunities post this crisis, but relying on hope will be a losing strategy. It is the brands that are considered and take proportionate action that will be the ones that survive and thrive.
