“In a crisis, there is always the seed of opportunity”. The Chinese word for crisis carries two elements, danger and opportunity. No matter the difficulty of the circumstances, no matter how dangerous the situation, at the heart of each crisis lies a tremendous opportunity”. Ogilvy
It may seem unreasonable to talk about growth opportunities and marketing strategies now when there is a very high level of fear and anxiety, and we are pushed to live in a survival mode. But let’s look closer if it is true.
COVID-19 is that type of unprecedented event which happens once in a lifetime. And the uncertainty it creates can push businesses to implement the defensive strategy, like firing employees, cutting budgets, or closing companies completely. So as a business owner, what should you do: stop all your business activities, just wait and do nothing? Or take a bold step to make an impact by adapting your marketing strategies, transforming the processes of your business operations by acting out to the best of your capacity?
Let’s look into the reports which analysed hundreds of businesses and see which marketing strategies were used by companies who could pivot, stay relevant for customers, and won the market during the uncertain times.
Ray Dalio, one of the most successful investors of our times, in his article “The Changing World Order” posted March 2020 on his LinkedIn said that the study he made around 18 months ago has clearly shown very distinctive signs of an upcoming economic crisis. And the proportions of the disruption would be unusual, something which we have not experienced in our lifetimes: “I believe that the times ahead will be radically different from the times we have experienced so far in our lifetimes, though similar to many other times in history.”
Another big report was published last year by Bain&Co, stating the same idea that “It’s an overdue”, and the crisis should arrive soon, because we have been in economic growth for more than 10 years, and for historical standards it’s long. The authors also offered strategies for how to prepare for the downturn, the main idea of which is reflected in this comparison with racing: “Think of a recession as a sharp curve on an auto racetrack—the best place to pass competitors, but requiring more skill than straightaways. The best drivers apply the brakes just ahead of the curve (they take out excess costs), turn hard toward the apex of the curve (identify the short list of projects that will form the next business model), and accelerate hard out of the curve (spend and hire before markets have rebounded).”
Apparently, if a company is well- prepared, it can survive the crisis and emerge as a winner after the outbreak.
McKinsey&Company in their article shared a similar idea: spending less during the expansion and investing more at the times of crisis is a smart strategy to use for a company to be successful long-term: “While most companies tightened their belts, successful leaders, trading lower short term profitability for long-term gain, refocused rather than cut spending. Indeed, these successful leaders actually spent significantly more on selling, general, and administrative (SG&A) costs, than did companies that lost their market leadership. Yet in expansionary periods, successful leaders spent significantly less on SG&A than did their former peers. Furthermore, successful leaders, seeking to extend their position through innovation, more than doubled their already higher-than-average level of spending on R&D during the recession relative to their former peers. Expenditures on advertising followed a similar pattern, with successful leaders spending more money (as a percentage of sales) than did their former peers during the recession and smaller amounts of money in periods of growth.”
It’s beneficial for a business to be disciplined during years of stability and growth so that in times of crisis it has more agility and flexibility to adjust. This graph from Bain&Company report clearly shows that doing it right in crisis significantly impacts the growth rate of companies after things improve.
The same information is confirmed by Ogilvy report
Although it is beneficial to implement this strategy during the economic slumps, it’s clear that for some businesses it’s not easy: the study of Harvard Business Review shows that 17% of businesses did not make it through the recession period.
And still, as Bain&Company’s research concludes, businesses that struggled post-recession chose to switch “to survival mode, making deep cuts and reacting defensively”, which meant “that they later must spend far more than they saved in order to recover from their prolonged absence from the media landscape.”
So it’s obvious that the situation now challenges us to find innovative solutions and approaches to the business. And inaction can only harm it. It’s the time for transformation.
To encourage you to take actions, let’s see what can be done and what other companies have implemented.
6 marketing strategies to guide your company through a crisis
The main idea of reports above is something has to be done. Inaction is harmful. It does not mean that you don’t have to cut some expenses or review your strategy. You have to adjust. Those companies which manage not only to stay alive but to be salient at the uncertain times will recover quickly and will have faster growth after the crisis. And as most of the businesses do not do that, the crisis becomes a unique opportunity for a tremendous transformation and growth.
Here is a great quote by Tim Stewart from tsdigital agency: “Suspend normal targets and criteria for success. You’re no longer in a growth and acquisition position, so KPIs based on revenue targets, etc., are moot. Inaction is almost guaranteed to cause greater issues, as by lack of action you are still making a choice, and an inflexible one that will limit choices you can make later, potentially fatally.”
So which approach to choose? Many companies might aim at some short-term gain, trying to save the company, and thus becoming tone-deaf. Here is a story from John Long, executive creative director at Ogilvy New York to illustrate this idea: “Imagine you live in a small town that’s just been hit by a Category 5 hurricane. It feels like a warzone. You’ve been without power for days. Your home has been damaged. And you heard on the radio that dozens of people have perished, and many more are injured. You’re still trying to wrap your head around the devastation when your neighbour Bill from across the street, who’s a manager at a local car dealership, knocks on the door. “Good to see you,” he says, strangely cheerfully. “Great news. We just got the new models in. So if you’re interested, I can cut you a deal on your trade-in.” Now, you’d probably never speak to Bill again. But unfortunately, Bill’s tacky sales pitch is how many brands have responded to the Covid-19 pandemic.”
You definitely do not want to be Bill, right? So which strategy to choose to survive the recession?
1. Initiatives and actions to fight the COVID-19
Helping to fight the coronavirus itself is the most logical and straightforward strategy. And there are many ways to do it: from donating a part of your profit to a charity, supporting the medical staff, producing masks, ventilators, or even invest in the vaccine research. This pandemic is that rare case when any help can be useful because there is no one who is not or will not be harmed by it. And if you can, you should help.
Here are 3 great examples of such initiatives by brands:
– Sabrina Monte Carlo, an interior design brand based in Monaco, donates 10% of its profits of online sales to Red Cross Monaco to support people affected by COVID-19. The company launched the online shop prior to the virus, in September 2019 during the Monaco Yacht Show, and has created this simple but smart strategy to help those in need and at the same time to reactivate the online sales.
– Moncler, an Italian Fashion brand, announced that it would donate 10 million euros to support the construction of a new hospital in Milan. On his Instagram, CEO of the company, Remo Ruffini said that it was the payback “…to the city which gave us all an extraordinary time”
– Airbnb has created a new global initiative to support healthcare professionals, relief workers and first responders by providing them with free stays. The company will waive all the fees for the stays organised through this initiative. The owners of apartments can opt into the program and open their houses for free for healthcare workers and others who help fight the virus.
2. Digital transformation
Digital transformation can be one of the few positive influences of COVID-19. It’s needless to say that now it’s relevant more than ever: social distancing, stay home rules pushed us to use all possible resources online, from delivering food to attending business events. Diversifying your business into digital is a long term strategy which will bring its benefits not only now, but after the crisis is over. And it does not matter what business you are in, SAAS or a brick and mortar store or a dine-in restaurant, you have to be present on digital platforms, otherwise, you risk to lose your customers to your more digitally savvy competitors.
There are many strategies to choose from- creating social media accounts (from LinkedIn to TikTok), or an online shop, implementing email marketing, or simply adjusting your content strategy to deliver more value to your customers. These are some of the steps which can really help to keep your business alive.
Companies which did it really well:
– Chinese real estate company Sunac (Rongchuang) did live streamings during which agents could virtually show and recommend houses as the customers were not able to visit them physically. This new digitalise approach has given the company the opportunity to communicate with clients and support the business during the lockdown. And it would be advantageous to continue to keep this channel after the crisis so that the company is able to reach clients anywhere, not depending on location.
– Food industry has some great examples of digital transformation.
For First Choice, B2B grocery provider, based in London, hotels and restaurants were the main clients before the coronavirus. During the lockdown, they managed to adjust their strategy: they created an online shop and started selling food to individuals. They were so successful that they had to update their hosting plan to cope with the number of orders.
In Monaco, many food businesses made such an attempt and started to deliver their products. For example, Santo Gelato, a physical store of an ice-cream in Monaco, updated their website with the list of ice-creams and desserts that they offered and started delivering in Monaco. Ice-cream is a very unique product for delivery, yet the company chose this strategy which might be a lifesaver for such businesses.
– Events were impacted the most and organising companies had to adapt quickly to online experiences. Adobe, who holds its annual Digital Experience Conference, had to transform this huge event into a digital one. Usually, the event takes almost one year of preparation and gathers around 25 000 attendees. So it was a bold decision to make it online. The company has not only overcome this challenge but it achieved much bigger results with numbers of viewers and can now share around 100 sessions of valuable content with customers.
3. Brands matter now more than ever- tell your story
A lot of people have experienced a sharp decrease in income and their purchase power is weak. So probably your products do not matter now or are not a priority. Why should you still continue your marketing activities? The crisis is the perfect time to tell your story, to connect to your audience and to build a new one. These are the times to show that you actually care about your customers. The communication “Direct to consumers’ should be replaced by “Direct to People” as Kristen LaFrance describes it: “Direct to Consumer is a philosophy that just got tossed out of the window. We don’t know for sure what consumer behaviour will look like in the next few weeks or months. Instead, focus on being Direct to People. Right now, it’s more important than ever to think of the customers on the other side of your sales report as human beings. Your products probably aren’t high on people’s priority lists right now. But your community does matter. Your people too. Be Direct to People. Anything less won’t cut it right now.”
It’s not the moment to ramp up your sales. You can seem tone-deaf even if you offer a discount. Adding value to people’s lives in many different ways, from giving them gifts of value to simply making them feel good – this is the strategy which can retain your current customers, and attract new ones. And it implies authenticity and transparency. So communication should be relevant and thoughtful. Even sharing how your company deals with the situation or which difficulties it faces can create more trust in the relationship with customers. Being empathetic and flexible, showing your customers that you appreciate them, can be the support they seek during these uncertain times. And these efforts can bring benefits long after the crisis is over.
Here are some amazing examples:
– Gary Vaynerchuk, one of the most influential entrepreneurs of our times, has started the live video series called “Tea with Gary Vee”. Almost every day Gary goes live for 1 or 2 hours, and talks to real people, answering their questions, giving them real advice on positioning, content, digital marketing. His public speaking engagements are valued at around 150 000 $ per hour, and in these videos, people get a personalised consultation for free, with the same (or even bigger) value. One of the brightest examples of how a brand can add more value to people’s lives and create an authentic relationship with customers.
– Marie Forleo, who is famous for her MarieTV and whom Oprah named “a thought leader of the next generation”, created “Self-Care Saturday” live streamings on her Instagram. Marie personally gets online, and spends around 1-1.5 hours, giving away ideas for businesses, doing workouts, interviewing interesting people and giving coaching advice.
– Heinz ketchup came up with an amazing initiative to support dine-in restaurants who suffer the most from this pandemic. It is going to give 2000$ to each of 500 diners which will be chosen based on fans votes. This is a real help to businesses that struggle the most.
4. Adjust your communication strategy
The confinement and social distancing have not only pushed us to spend most of our time online, on digital platforms, but it has changed our priorities and consumer behaviour drastically. So it would be reasonable to stop any marketing strategy you planned before the pandemic and create a new one which will be relevant in the current situation. It should be redirected to where your audience is now and contain a meaningful message and communication. You can cut some budgets or even cancel some advertising, but you should continue your marketing efforts and stay in contact with your customers.
Nathan Jordan, creative director for Market Connections says: “COVID-19 has completely changed the world of advertising. Period. Full stop. In my personal experience, I never thought I would be tasked with developing a tourism advertisement or social media strategy that communicates a message asking visitors not to visit, or helping small business, such as a locally owned restaurant with primarily dine-in clientele, redefine their entire business model in a matter of weeks.”
Companies who pivoted successfully and changed their communication strategies:
– Hyundai, a car producer, has recreated the campaign they used during the last crisis in 2008. They delay all the payments for people who bought or leased their cars recently and lost their jobs. The advertising creates positive feelings of togetherness and security and reassures that the brand takes care of its customers.
– Visit Portugal has created a beautiful video campaign with the main message of not visiting Portugal. The company asks customers to stop travelling, to use this time to rebalance and to look forward to better times.
– Formula 1 whose races were cancelled worldwide has organised multiple events online. Drivers regularly do e-races and even virtual Grand Prix. The company streams some of the previous races on the social pages. And it gives away 1400 hours of free F1 TV for free for 30 days! These are some of the great ways to stay in touch with millions of fans and entertain them while they are locked at home.
5. Create meaningful content which adds value
Content creation and its distribution are now more relevant than ever: people are stuck at home and consume a lot of information online. If you are able to create content which stands out in the massive flow of everything that is published online now, you have all chances not only to survive this pandemic but also quickly regain your profit after the crisis. Giving away your products or services for free or at a reduced price in crisis is an excellent way to create value and stay relevant for customers. Plus now when people spend a lot of time online, they tend to try new products, and this is an amazing chance to acquire new customers who can become regular ones.
Companies who created value for customers and stayed salient:
– Harmon Brothers, a video advertising company which produces some of the most successful and bright ad videos, gave away their course “14 days video challenge” for free. This course has a detailed strategy of how to create a video ad that sells and usually costs 197$. I personally took this course and found it really interesting and valuable.
– Jon Loomer, one of the leading Facebook marketers, Facebook ads guru, made several live streamings on his page in Facebook to communicate with his audience and based on their answers and comments created a new training on how to actually create live streaming, which technologies to use and how the whole process should be organised. He sold it at a very modest price of 49$, while his usual training (with the same value) costs from 97$ to 197$ each. Jon is one of the most empathetic marketing leaders I know and he always over-deliver, in his free products and paid ones.
– AccuRx, a British software company whose main product is a messaging service for doctors and their patients, within a weekend created a video consultation service. This service is free for all the workers of the NHS who help to fight the coronavirus. And it’s simple to use: patients and doctors do not need to download anything or to have sophisticated technology and webcams.
Ross Simmonds, CEO of Foundation Inc. shares his observation: “Brands who double down on their investment while others pull back will likely see a lower cost for results, and brands who use this time to add value to their audience rather than sell, sell, sell will build relationships on trust and earn their customers budget/wallet by focusing long term.”
6. Entertain- add more positivity and cheer to people’s lives
Entertaining people can be a powerful way to stand out in uncertain times like this. “During the Spanish Flu pandemic of 1918, things like theatre, brothels and printing press still thrived. Why? People still wanted to be entertained. The same will be said about all those cooped up at home. Keep your audience entertained throughout this awful period, and when the world finds its feet again, guess whose name will be in the forefront of your target market’s minds?” says Dan Kelsall, Creative Director of Offended.marketing.
Here are some bright examples of implementing this strategy:
– Monte-Carlo SBM, the company which owns most of the hotels and restaurants in Monaco, sends out a weekly email with various ideas on activities that their customers can realise at home. These activities include useful beauty tips from the professionals who work in their luxury spa, yoga live lessons from the instructors of their fitness clubs and live cooking sessions with Michelin stars chefs of their restaurants.
– Alfred Coffee, coffee shops in Los Angeles who had to close their brick and mortar locations, have created a coffee subscription for 3, 6 and 12 months: each month they automatically deliver your coffee beans to your home. And on their social media, they share recipes on how to prepare different types of coffee at home – great entertainment for coffee lovers (like me).
– Vogue Paris has come up with #FromHomewithLove and #VogueKitchenWeek- video series on its Instagram where famous chefs and designers show how they cook different dishes. Simple, but at the same time effective strategy to be in contact with followers.
– Hegid, a luxury watch start-up based in Paris, has created an album for painting for adults and children with different models of the brands’ watches. Very original and authentic idea!
Coronavirus pandemic has suddenly changed our lives. And it has left us with no choice but one: to adapt and find new ways of doing things. A very high level of uncertainty, the lockdown, fear and anxiety shifted our priorities and the way we spend time and money. And businesses have to adjust to this new changed consumer behaviour. Those who manage to pivot, to use this crisis as an opportunity to strengthen relationships with customers, have all chances to survive and come out of it as winners, quickly gaining market shares after the outbreak.
Digital transformation has played a major role in pivoting for many businesses due to the strict rules of social distancing. For many businesses, it became a lifesaver as it allowed them to reach their customers on social media and sell through online shops. Also, it has created much bigger opportunities to do business, to arrange events and to organise educational processes.
This crisis is a chance for businesses to review their strategies on all levels and to use creativity, agility and determination to innovate. “Disruption starts with unhappy customers, not technology”, says the article on Harvard Busines Review. So companies which deliver a bigger value win. This has always been true, but in uncertain times when people live in fear for their lives, this becomes really important- customers start to appreciate businesses which care and help cope with different issues.
While the future is unclear, one thing is certain: there will be “the after”. And those businesses which manage to stay relevant and salient throughout the crisis will be rewarded with great opportunities for growth after it.
“Marketers who manage to turn crisis into opportunity are those who consider and address impacts across all time horizons. They will secure the now, and make up for lost ground as the recovery kicks in, and get on the front foot to turn shifts into long-term growth opportunities. By staying agile and competitively-minded, these brands can turn bold and creative moves through the crisis into disproportionate share gains“, concludes Ogilvy report.