The world is 4 months into the coronavirus lockdown. Almost every indicator of economic growth and consumer confidence is giving negative news. Even the most optimistic ones are not hoping for a recovery anytime soon. In a situation like this, what do marketers need to do to survive the recession?
With disrupted business operations, businesses are struggling to survive or taking a hit on profits. With decreasing revenues, companies strategise to cut down on marketing spends first. Brands inadvertently, or intentionally, slay their axes on the consumer through customer benefit cuts or reduced branding expenditure. While these are strategic decisions taken as part of austerity measures, they end up minimising a brand’s long standing efforts towards building brand image and customer loyalty. However, the most successful brands do one thing right – customer benefit is the last cost in line to be touched.
Crisis As A Disguised Opportunity
A time of crisis offers an unreal opportunity for brands to connect with their customers. Brands who direct their marketing efforts towards consumer retention and brand building during a recession tend to perform better than others in the long-run.
The world population has been under a lockdown since March 2020. People have been staying at home as the world has come to an almost halt. This has proved to be an opportunity for brands to capitalise on as consumers are offering more attention and time than before. Brands like McDonalds, Nike, Amazon, Airbnb, Adidas and Budweiser are some brands that have utilised this time to build brilliant commercial ad campaigns that have well connected with their consumers.
Smart marketers instead even accelerate their marketing spends in areas that can potentially yield faster growth in future. They refine their mining of consumer analytics during this time. Many marketers gather customer feedback and data specifically directed towards the brand during a slowdown. This data is compiled, analysed and acted upon to develop future marketing strategies that naturally deliver better results.
Quelling Customer Apprehension
“The more you sweat in peace, the less you bleed in war. The survival strategy: Our expertise has enabled us to deduce an efficient inventory management practice which becomes a critical factor to ensure the financial health of our partners during a slowdown. Every slowdown presents us with a unique opportunity to relook at our systems and processes to improve our efficiency. Cost optimization is one such area which presents itself with a lot of room for improvement”, said Shashank Srivastava, Executive Director (Marketing & Sales), of Maruti Suzuki.
A major reason for why customers are deferring their purchases is the uncertainty in job and pay. Many across the globe are either losing their jobs or taking pay-cuts. With such financial confusion, people prefer to not spend and rather wait out the storm before making a big purchase, such a car in case of Maruti Suzuki.
However, marketing campaigns play a key role minimising this confusion in the minds of the consumers. A well laid out ad can create optimism in the minds of people and bring down the negative emotion floating around. A strong ad campaign plays a crucial role in deciding how much sales will a brand drive in an otherwise sleepy market. A marketing campaign not only instills positivity among the consumers but also develops confidence in the brand, thereby, developing strong brand recall.
Go Long With Marketing Campaigns
At a time when consumer spending is at the lowest, it would be rather futile for marketers to expect instant or short-term returns on their marketing spends. This is a time where brands need to play the long game – build long lasting customer loyalty.
Marketing campaigns should be directed towards an experience, emotion or expectation of the brand’s product or service rather than focus on selling itself. This is a time to remind customers about the feel-good factor associated with the brand and its offering. Marketers should aim to evoke the desired emotion in consumers rather than expect any tangible sales.
What one can do hope for is for such efforts to pay off when consumer spending picks up again. If a brand is successful in tackling the consumer emotion, chances are bright that consumer preferences will favour the brand in future. Current objectives of marketing campaigns should be long-term rather than short-term results.
The best examples of this would be aviation and entertainment sectors which are probably the hardest hit. The two industries have almost zero business operations and hence companies are aiming their efforts towards retaining customers for a time when operations kickstart again.
Survival of The Fittest
Staying invested in your customers becomes even more important in times of crisis and recession. As any other, this time is also temporary and things will gradually begin to grow again. For a time when consumers are ready to open their pockets again, brands need to develop strong bonds with their consumers during such times.
A meaningful bond celebrates the trust consumers have placed over the brand. This trust pays off in the long run. The balance sheet may look bleak at the moment, however, only those will recover who paid attention to what their customers are feeling in current times.
A slowdown is the best time to invest in the business and brand as a whole. Marketers should focus on portfolio prioritisation and geographical focus of their business. Analysing and re-analysing should become key part of developing a marketing strategy. Mindful expansion is key to survival during an economic downturn. This is the best time refresh and reboot your brand portfolio and adjust it according to the evolved consumer market. This is a time to be mindful of all costs and efficiency at all levels.
It is only bust natural for your business-as-usual to come at a standstill. But don’t panic. Rather, focus more than before and re-energise yourself, your team and your brand.
If done right, the fruits will be sweeter than they ever were before.