Marketing during Covid-19

The past few months have been unsettling for both large and small companies. Employees have had to readjust to working from home, people have been furloughed or lost their jobs, and there is the possibility of a catastrophic result for many businesses.  

During an economic downfall, it is natural for consumers to cut their spending, with stricter budgets and priorities. This, of course, has an impact on businesses. The main difference between the current pandemic of Covid-19 and other economic crises is that most services have been forced to take a pause.

Physical shops have had to shut and industries such as hospitality and travel have had to close their doors to the public until further notice. People are not just choosing not to spend; they simply cannot spend.  

The world has experienced two recessions since the Great Depression in the early 1980s and in the 2000’s and it is fair to say that mistakes were made and there are lessons to be learned from both. As profits take a downward spiral in most businesses, costs are cut across the board with marketing usually first to go and it seems as if it has already started.  

In a recent report by the Interactive Advertising Bureau in the USA, 24 per cent of marketing decision-makers have paused all advertisement spend for the first and second quarters of 2020. However, this could be the biggest mistake made by any business, an argument which is supported by the Harvard Business Review.  

After the 2008 recession, the Harvard Business Review published an article stressing how important marketing is during an economic crisis and the many lessons one should take from the mistakes made during the recession if we are ever to experience one again. Alas, here we are, a different scenario yet another economic crisis.   

Customer loyalty  

The article by the Harvard Business Review stated that customers fall into four categories:  

·  The ‘slam-on-the-brakes’ consumers: hardest hit financially and feel most vulnerable.  

·  ‘Pained-but-patient consumers’: resilient but optimistic. They economise in all areas, just less aggressively as the slam-on-the-breaks consumers.  

·  ‘Comfortably well-off consumers’: these people feel secure about their ability to ride out current and future hits in the economy.  

·  The ‘live-for-today consumers’: carries on as usual and generally unconcerned about savings. Unlikely to change spending habits unless they become unemployed.  

One thing everyone does have in common, regardless of which group consumers belong to, is that they prioritise their spending into four categories:  

‘Essentials’, ‘Treats’, ‘Postponables’, ‘Expendables’  

Whichever category your product or service falls into also depends on the category your customer falls into, bearing in mind this may change during the economic uncertainty.  

This being said, you should always aim to stay loyal to your customer base. It is important to maintain trust and to keep the integrity of your brand without it looking like you are trying to appeal to just anyone and everyone.  

According to the Harvard Business Review, “Loyal customers are the primary, enduring source of cash flow and organic growth. Marketing isn’t optional- it’s a “good cost”, essential to bringing in revenues from these key customers and others”.  

Don’t punish your customers by increasing prices. Promotions and special offers won’t only appeal to your loyal customers, it will potentially draw in new customers and demonstrate empathy around the current pandemic from your brand.     

Outsmart your competitors  

During a financial crisis, the last thing you want to do is start spending more on your business when you are not generating enough profit. It’s tempting to hold back, wait for the crash to be over and then create lots of new and exciting marketing campaigns to draw in your now financially stable customers. However, the Harvard Business Review, 2009 said, “Companies that wait until the economy is in full recovery to ramp up will be at the mercy of better-prepared competitors”. This may sound daunting, but there is research to prove that a continuous or increase in marketing spend will benefit your business rather than cutting back costs.  

A study by Tony Hiller in 1999 examined marketing and financial data in 1,000 firms across Europe and the USA. The firms were divided into three categories based on whether they had cut, maintained or increased their marketing spend during the economic downturn.  

The results are as follows:

Firms who had cut marketing spend - FALL of 0.8% in profit

Firms who had maintained marketing spend - INCREASE of 0.6% in profit

Firms who had increased marketing spend - INCREASE of 4.3% in profit    

During the first two years of recovery, the same trend was observed in the market share. The businesses which cut their marketing spend only gained an average of 0.6 per cent of points market share, compared to those who maintained with an average of 0.9 per cent and to those who increased with an average of 1.7 per cent.  

It really is a no brainer. To make sure your business or brand stays afloat during this time it is inevitable that you continue to spend on marketing and if you want to swim, then increasing your spend would be wiser.  

Adapting marketing  

As the economy continues to change, people’s habits change thus marketing changes. As said in the Harvard Business Review, “in recessions, marketers have to stay flexible”.  

It is best to prepare now for a possible long-term shift in consumers’ values and attitudes, especially as elements of the pandemic, such as social distancing, may last longer than we originally had hoped for. 

This being said, in an interview with Forbes, Scott Jones, CEO of 123 Internet Group, said, “We are in uncertain times, but with the increase of remote working and collaborative approach, companies are turning to digital channels and embracing the transformation. We have seen a real spike during the last few weeks from companies wishing to create or update websites, launch new e-commerce channels and create social media campaigns focussed on home-workers and a real focus on using influencers and SEO to reach new audiences.”  

Great examples of this include clothing stores such as Topshop and Zara, who have developed their marketing to increase campaigns for loungewear and Asos has uploaded images of its models posing in new lines in their homes. Simple yet effective.  

For advertisements, digital is the clear winner. This is not only during the current crisis while people are staying at home but will put your company in good stead in the future as more and more people are both shopping and seeking services online.  

There are 2.5 billion social media users which equate to nearly half the world’s population (Emarsys, 2019). With all of those people using social media now more than ever to connect to the world outside of their living room, a digital presence is imperative to market your business. For more information on this, take a look at our February post on the Importance of a Digital Presence.  

Be vigilant and empathetic  

This is an incredibly sensitive time. The economic crisis is not due to faults in stocks and shares, it is a result of a global and deadly pandemic. Therefore, you must ensure that while you continue to market your brand you should do so responsibly, with empathy and mindful thinking.  

Look at your current marketing campaigns or advertisements. Are they appropriate? Are they relevant? See if you can adapt any current campaigns or slogans to ensure you are staying mindful of the current situation, as well as looking at any that need to be immediately paused.  

Visuals and imagery are important, too. Images of people holding hands, large crowds or figurative language such as “get closer to your customers” may need to be temporarily re-worded. This will not only swerve any offensive marketing but also highlight your brand as empathetic and trustworthy, one that customers and clients can relate to which in the long run, will make them more inclined to buy your product or service.  

A great example of current marketing would be Uber. Services such as taxi drivers are having to take a pause on their work. To encourage people to ride with them would be as smart as someone suggesting to inject bleach and disinfectant into your bloodstream.  

Uber’s new slogan reads, “Thank you for not riding with Uber”. A powerful and clever way of acknowledging the crisis. By asking their customers to not ride with them now, will probably result in a lot more people riding with them when the pandemic is finally over.  

For more information on how to market your brand creatively and professionally, do not hesitate to contact Natcho. We can help you with a range of services such as graphic design, photography and videography to really help your brand stand out.