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Quite often when things get tough the knee-jerk reaction is to cut costs, and the marketing budget can be one of the first to go. While this might seem to make sense, cutting the wrong costs (i.e. your marketing budget) can not only hamper your progress when revenue is low but delay or prevent your comeback when the economy turns around.
Don’t Stop Marketing in a Crisis
Consider what costs you can redirect without impacting your long-term share of market.
Make sure you are across your market’s new norm and how you can best address it.
Pivot your goals based on your research.
Track your results – never stop thinking about the future and adjusting as climates change.
So when things take a turn for the worst, here are some strategies to get you through, whether it’s a global shutdown caused by a pandemic or the next global financial crisis.
If at all possible don’t stop your marketing. Marketing is an investment that builds over time and you see the results in increased brand awareness and trust, authority and credibility. These are drivers for sales.
Maybe it’s best explained by saying marketing a two-speed race. Driving sales is an adrenaline-fueled, addictive helicopter ride to the little win but building authority is the international flight that requires constant attention. If you stop the engines on your long-haul you will start, however slowly, to descend and may not even get to your destination.
This has been shown time and again in previous economic downturns. In the 90-91 recession, McDonald’s dropped their ad and promotional budget in the US, while Pizza Hut and Taco Bell did not. Their sales grew by 61% and 40% respectively, while McDonald’s declined by 28%.
In the great recession of 2009, Amazon grew sales 28%, helped in part by the release of new Kindle products that helped grow market share and give customers a lower-cost alternative to printed books.
Maintaining your authority is not the only reason to keep marketing during a crisis.
Also, brands that stopped require a larger investment to return to their pre-crisis position when they start marketing again.
Due to COVID-19 promotional spend is already down, so how do we make sure we don’t end up bobbing in the Atlantic in our inflatable life vests beside our stopped and descended plane?
While it is not recommended that you stop spending, you need to make sure that not a single dollar is being wasted. The best way to do this is to take stock and re-evaluate.
A great place to start is a review of your current spending. Where is your money going and does it need to go there right now?
Consider what costs you can redirect without impacting your long-term share of mind.
In the COVID-19 pandemic, customer behaviour has changed and without a doubt, your competitor’s behaviour will be changing too.
For example, some companies are seeing that sales cycles now have a longer journey between awareness and purchase. These companies are having to focus on top-of-funnel activities to keep the pipeline stocked up.
It’s quite likely your customers’ requirements have also changed. For example, instead of a luxury 10 pack of toilet paper, there may be much more demand for an economy 48 pack. Make sure you are giving the people what they want right now.
Find out where your target market is spending their time and focus your efforts there. There is no point advertising through podcasts if your audience isn’t listening to them right now because it’s what they do on their commute, for example.
Review your verticals. While one vertical might be lagging, there may be another you can move the marketing resources into. For example, while there is no demand for travel insurance you could focus on home insurance.
Also, review the channels that are bringing you the most business. Perhaps your resellers are more than making up for the loss of your bricks-and-mortars, so redirecting marketing budget from promoting your stores to promoting your resellers could help grow this even further.
Make sure you are across your market’s new norm and how you can best address it.
By now you should have a pretty good idea of how clients are acting and what they are looking for, so it’s time to turn the tables and see how your business fits into this new climate. There are so many market research options that you can follow to find this information, but we’ll just run through a few here.
Consider your strengths and weaknesses and how they might serve you in the new climate. Also, consider any new opportunities or threats coming out of the changes. Look for any obvious misalignments and how you can rectify them.
Share of market will show you how much of the market share you are getting.
To work it out, calculate your company’s total sales for a set period. Then divide this by the industry’s total sales for the same period.
If there is market share available for you to tap, you should refocus your efforts on what your customers want now so you can be sure to meet it.
Share of Voice is a gauge for your brand’s visibility and how much you dominate the conversation in the industry. The more share of voice you have the greater popularity and authority you’ll likely have.
To work out your share of voice, divide your brand mentions by the total number of industry mentions.
Here are some metrics to consider including in your share of voice calculations.
Now that you have a good idea of the new environment and where you fit into it, it’s time to create your new goals, and then focus your spending on achieving these goals.
Your goals and actions will entirely depend on what your research shows you but here are some tips on how to pivot your marketing.
Remember, this is your long-haul flight, and a massive contributor to sales, so you don’t want to take your foot off the gas if you can help it.
Side and ‘what-if’ projects can wait for now. After all, they may not even be relevant on the other side.
Consider your customer journey and any blockers potential customers are having and make sure you are spending your money and effort overcoming them.
Public Relations and Word of Mouth campaigns can be less costly but just as effective. Loyalty campaigns, done well, offer another way to keep building your brand and trust.
These can speak to customers who are trying to save for the next unexpected twist, and prices can go back to normal when the economy does.
Organic social media posts don’t get your brand name very far anymore. Consider shifting some of your budget to paid social posts, and don’t forget to use remarketing, so you can target people as they move through your sales funnel, or exclude customers and not waste a cent.
You might not have the budget for the professional photographer anymore but you can still create beautiful visual content. Get your staff taking pictures of their greatest work or videos on how your product works.
Growing your subscriber list is always a good idea, considering the return on emails can be up to 42:1. Consider using a giveaway to attract subscribers, just make sure it is highly targeted so you don’t end up with a list who don’t open your emails. Custom pop-ups that trigger when website visitors are most likely to sign up are also a great idea and locked content and using YouTube are proven methods.
During a crisis, more than any other time, environments and opinions are changing quickly. Make sure you regularly check on your marketing results and that they are what you were expecting to see.
If they are not, make sure you are re-adjusting your budget as quickly as you can.
Without a doubt, one day the crisis will end but that doesn’t mean that things will go back to what we knew as normal.
There are predictions of the COVID-19 pandemic making online shopping even more popular than it already was. Plus there have been unpredictable changes like producer Pepsico and Frito-Lay setting up a direct-to-customer website. There is also the expectation that even when people are let out of lockdown they will not want to attend large events or travel.
So how do we continue to plan for the future? By following the steps outlined above, keep reviewing your target market, the current climate and how you solve problems within it. And never stop marketing! That way we should all get to our international destination. Happy Travels.
Content Marketing Specialist @ Vision6
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