Brands & Marketing During Crisis Times
A HUMAN Guide to Sift through the Essentials
Downturns always bring new anxiety and pressures - with little or no economic growth, marketing efforts are typically put on hold as potential damage is assessed. Everyone seeks to survive by “taking it one day at a time”. In the midst of the unprecedented COVID-19 pandemic crisis and a looming recession with talks around the creation of solidarity funds, many are taking it several hours at a time. Markets are roiling as plans continue to shift or get cancelled. While larger corporations are coordinating to roll out policies from their procedural guidelines, medium and smaller businesses are likely to feel isolated in decision-making. Questions such as “how do you create or reframe value for customers in this context” and “how can you lean on commercial innovation in the absence of product innovation or lost demand for your current portfolio?” loom large.
We wanted to share some insight gleaned from past experience, research, analysis in managing and assisting smaller and medium sized enterprises through unexpected crises (earthquakes, financial crisis, epidemics). Robust marketers from any scale of business should favour a long term visionary plan over a short term survival kit. Once the current crises does pass, and it eventually will, your consumers, users and customers will remember whose actions resonated and stood by them. Gimmicks are out; honesty, reliability, durability, safety and performance are in.
We came up with 5 idea shifts we hope will be helpful to sift through and navigate this crisis the best possible way. Since human nature and relationships are what lie beneath all the fluctuating business figures, we sift through potential business and marketing issues through a “HUMAN” lens Here’s what that means when it comes to baking new strategic ideas in crisis times:
Honest
Business leaders will cement the loyalty of employees, suppliers and customers by being upfront about uncertainty and focusing their communication and action on the current challenges. Listen to understand employees, share knowledge on how the company has survived difficult times before. Strive to maintain “pre-crisis” quality standards. Spend more time connecting with your suppliers, customers and employees, leveraging tools (Zoom, Skype, WhatsApp, WeChat etc.) if you have not already. Connect with the whole chain. Continue nurturing a “one on one” relationship, even at a distance. Deliver personalized offers as much as possible. Be flexible and accommodating with your employees. Remember that honest and empathetic employee communication also means strong advocates for your organization’s brand as best human practices (as well as horror stories) can always be shared across social media. Share your crisis-related measures and actions as transparently as possible with your customers and consumers. Use friendly human language to correct any heavy legal terminology in outgoing official statements.
Useful
It’s time to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. Must-have features of yesterday are today's can-live-withouts.
Consumers take more time searching for durable goods, are negotiating harder at the point of sale or are panic buying in bulk (thus destroying the supply chain balance for days and weeks). Others are more willing to postpone purchases, trade down, or buy less. Understand how you are useful and unique to your consumers. What would they do if you did not exist? Would they trade up/down or trade aside (replace you with a new compensation behavior or alternative)? If you are threatened by a different type of competition, can you pivot to offer it before others do? Can you provide better return and warranty benefits to anchor your business relationship in the long run versus cheaper competition?
Reforecast demand for each item in your product lines in the case that consumers trade down to models that stress good value (white and durable goods with lower energy consumption, cars with less features, etc.) Tough times also favor multi-purpose goods over specialized products. Weaker items in product lines should be pruned or discontinued for a while. New products, especially those that address the new consumer reality, should still be introduced but marketing should stress superior value for money, not corporate image.
Meaningful
In uncertain times, marketing spend is usually one of the first budget cuts to be made. Yet, a lack of brand investment also leads to the erosion of the meaning that drives loyalty and preference. At worst, a trickle down effect saps the advertising income that allows other services, like the media and social networks, to keep running free for consumers. Successful brands do not abandon their marketing strategies in a recession. They adjust them and calibrate their content to avoid being tone-deaf. It takes years of time and resources to build engagement based on trust, reliability, expertise and shared values with customers – it is essential to keep engaging, effectively and meaningfully. Be a brand that cares and acts that way.
Reviewing your approach and adopting a genuinely helpful yet direct tone in your communications helps. Avoid zany topical memes and appeals on the basis of fear or staying-at-home comedy jabs. Identify how to reach out to your target consumers if uncertainty prompts them to stay at home but also remain connected with family and friends. Seek small yet meaningful ways that go beyond profit-mindedness to assist those in need that your infrastructure can help the community with. For example, can you help vulnerable populations like the elderly have access to basics like grocery shopping and errand fulfillment? If you have underutilized resources that you can afford to share, do so. A larger-scale example of this is electronics firm Sharp’s repurposing of its TV factory to manufacture surgical masks.
Adjustable
Becoming adjustable in everything from managing cash flow through to messaging is key. Management of cash flow issues can be tackled in two ways: 1. Avoid tying up working capital in excess inventories. Early-buy allowances, extended financing and generous return policies can motivate distributors to stock your full product line. 2. Run a thorough and critical analysis of your cost structure to ensure which cuts or consolidation initiatives will save the most money with minimum customer impact. Accept that your customers will be shopping around for the best deals. You do not have to cut list prices but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-standing customers, price smaller pack sizes more aggressively, and develop subscription models with weekly deliveries rather than quarterly re-orders cycles. We can learn from retailers in China who moved to adjusting stores opening hours, expanding businesses through online channels and encouraging deliveries at no/limited costs.
To help manage working capital and balance marketing spend, renegotiate terms with your marketing partners if cashflow is an issue, they need to keep you in business too. Finally, adjust the message: “Available in March” is simpler and calmer than “out of stock until March”.
Networked
Using networked effects to partner with businesses and customers helps. Now is the time to enter partnerships not based on monetary terms but on shared business objectives. Seek to partner with brands which are complementary to yours and bundle your offerings, whether it is a tie-in with delivery services or product bundles. Finding meaningful ways to motivate existing customers to become advocates for your brand, thereby helping recruit new ones, also creates a networked effect.
We hope these can provide some guiding answers to your most burning questions around an uncertain landscape. For everything else, we are always an email or video call away to help you bake resilience into shifting plans.
