As the UK moves into month six of tackling the coronavirus outbreak, we are now also faced by the challenges that come with an economic recession, in what some are referring to as “the coronavirus crash”. We are now experiencing the repercussions of the lockdown measures that saw many industries brought to a standstill, leaving many businesses wondering what they should do next.
But what do AirBNB, Disney, Whatsapp and Groupon all have in common? Aside from being household brands, each of these businesses established themselves during a period of recession and proof that brands can grow during the economic downturn.
So what are the mistakes you should avoid when it comes to marketing your brand during a time of crisis to enable your company to protect profits and grow?
1. Making uninformed decisions
During times of crisis, we all have a tendency to panic and make rash decisions, but a wrong decision could be the difference between your business's successes or failure.
Before making any decisions to change or reduce your marketing activity, it’s important to know what the repercussions of that change could be. Quite often, marketing is seen
like a tap that can be turned on and off at any time, and while you can turn it off at a moment's notice, turning it back on isn’t as easy and will take a greater investment of cash and money to grow again.
Now is the perfect time to take stock and review your current marketing performance to understand what is working and where there are opportunities. Tip: Try answering:
How much revenue has marketing activity driven this year, last year or in the last couple of years?
What marketing channels do you see the best engagement and which is driving customer acquisition?
What channels have the best cost-per-acquisition and return-on-investment?
Which customers segments are the most profitable for your business? Are you attracting this type of customer?
2. Cutting marketing budgets
The first response of many companies during a period of economic downturn is to scale back to protect their profits. On the face of it, the logic makes sense, however the mistake many business owners and CEOs make during this time is making cuts in wrong areas. Unlike other expenses, such as rent or the costs of materials/services, marketing is seen as disposable spend that can be axed at any time. This is because many companies undervalue the importance of marketing plays in sustaining and growing their business.
However, while this may protect your profits in the short-term, long-term it will cause more damage as you halt the acquisition of new customers.
Whatsmore, while other brands are making uninformed decisions to pull out of the market, this is your opportunity to gain market share. With fewer competitors actively marketing, it is easier and often more cost-effective to reach your target audience. So rather than reducing spending, actively consider where you can invest more.
Tip: Improve the efficiency of your marketing spend by regularly reviewing and optimising your marketing activity. Small improvements in engagement and conversion rates can have a big impact on your bottom-line.
Don’t forget, not all marketing channels work as well for every business, so if it’s not supporting to grow your brand or acquire customers, consider if that time/budget would be better used elsewhere.
3. Forgetting who your customer is
All too often, businesses fail to really know their customers. By placing customers at the heart of an organisation, you can improve your marketing and increase customer retention, growing your profits long-term.
By adopting a customer-centric approach throughout your business, you can ensure you’re providing a great experience. Not only will happy customers stick with your brand longer, bring in more revenue, but they will also become brand advocates and promote your brand for you through word-of-mouth and referrals.
Once you know your customers, you’re able to identify where you are best to focus your marketing activity and the messaging which is likely to engage them.
If you already know your customers, during times of crisis it’s important to check back in and see if anything has changed. If so you may need to adapt your marketing targeting accordingly.
Tip: Try to imagine yourself in the shoes of your customer:
Who are you? What do you do/like?
How are you feeling currently?
Has anything changed in your life compared to normal?
How can your business add value to your life?
4. Focusing solely on lead generation and forgetting about brand
As many businesses decrease marketing efforts during times of crisis, the focus of marketing naturally swings to hard sell lead generation.
However, during times of crisis, customers gravitate towards brands that they value and have a relationship with. This has been evident more so than ever during the current COVID-19 crisis, as consumers seek to associate with the brands that represent their own personal values.
While the temptation to focus your efforts on the hard sell, this can in fact have a negative impact on customers' perception of your brand. Take the UK retailer Next for example, who received heavy criticism during the early stages of the COVID-19 crisis for offering a sale and focusing on profit.
During times of crisis, it’s more important than ever to showcase your brand and your company values. Brands that succeeded during times of crisis look out for their customers and their employees.
Tip: Communicate with your customers, don’t just sell to them. Reach out to your customers just to check in and let them know you’re there for them. Is there any additional support you can offer clients at the moment to help them?
5. Ignoring new or changing market opportunities
As humans, when exposed to stress or fear we go into “fight or flight” mode, with our first instinct often being to run. However, when it comes to running your business, it’s time to fight smart and consider what additional options and tools might be available to you.
As the external environment changes, this typically requires businesses to be agile and adaptive. Let’s take Netflix for example, back in the early 2000s they found themselves in grave financial trouble when the dot.com boom threatened their success as a home-video rental company. However, with some innovation and agility, Netflix was at the forefront of video streaming services.
By considering new opportunities in the market or new ways to service a different customer segment, you can increase revenue and protect your business.
Tip: Is there the opportunity to increase market share by adapting your offering or developing a new product for a different audience?
If you are struggling to identify how your marketing is performing or need support in how to effectively reach your target audience, CULT Marketing could help. Feel free to contact us for a free initial no-obligation chat.
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