Marketing Lessons and Business Strategy in a Coronavirus World

The truth can be found in a line with four simple words. "This too shall pass". From Persian poets to the words of Politicians and Leaders through the ages, they have learned the power of resilience and bouncing back. Share Markets return, markets fluctuate and even a decimated economy will find some form of equilibrium to use as a foundation for future growth, launched products and the emergence of famous brands. 

More importantly, you know and are still buying regularly from brands that have found their core in the midst of circumstances like a recession or national tragedy. So what can we learn from those in business who have wrestled with failure, broken markets and financial hardship that will take you forward? Some have said the Australian market needed to be preparing for a recession already with the last reality hitting 27 years ago. Earlier than that we have seen both the effects of the GFC and the downturn and recovery of the global impact from the terrorism-related events of 911. 

So where are the key lessons and learnings from those who have gone before us? How does the 'Master and Commander' of any business, small or large, keep a tight rein on the wheel and rudder while either riding the storm or needing to inject wind into depleted sails because you're dealing with a lack of a strong southerly in the doldrums? (Watch the Peter Weir directed movie from 2003 starring Russell Crowe and Paul Bettany to see some allegory in action).

A lesson for those of us in business from the last 10-15 years, is to find the courage in the wisdom and honesty of those who have already 'done it'. Amongst all the noise you are dealing with right now you need to lift your head out from behind the clanging gong of fear and get some objective truth coming into your mind, heart and soul. Don't lose sight of the fact you need to be built up, steeled against the lies and fueled for the future. If you have stored video, audio and books that were never absorbed, then NOW is the time. If you belong to a local business group or mastermind, join up, be a voice, encourage and receive encouragement. Do the same for your team. SOAK as much as possible so you are full for the road ahead.

Any business historian will tell you that the story of many successes came as a Phoenix out of tragic ashes. Some companies that you may not realise were started or reimagined in times of recession or have made comebacks include Lego, Groupon, Converse, Old Spice, Netflix, Amazon and Dominos. With that in mind, I have a few case studies I’d encourage you to discover for yourself listed at the end of this article.

“A time of turbulence is a dangerous time, but its greatest danger is a temptation to deny reality. [However] a time of turbulence is also one great opportunity for those who can understand, accept and exploit the new realities. It is above all a time of opportunity for leadership” Peter Drucker

REVIEW

Review your situation

A key to any future decisions is working with your team, advisors or agency on understanding your present position in both the market and your financial position to invest in the future. Up until right now you may have been riding a wave of work and lets be brutally honest, you may not have known if it was profitable, advisable or a long-term win. Now is the time for you to review your situation. 

Intentionally, you should be considering the health of your business and which areas will bring the greatest return. Reactive "fly by the seat of your pants" change may have been possible when you were under a flood of enquiry, however now there needs to be a considered approach to where to put your time and money. You won’t know where you can make a winning call unless you take a look under the bonnet of your business, check the oil, check the map and ask yourself if you are where you need to be.

Within the current market, it may be that you don't have the ability to conduct the deepest of audits on your business, however, you should be able to decide on three to six metrics that are your strongest indicators on business direction and viability. Whiteboard these right now and decide how you can keep these highly visible in front of your key team members in the next few months.

Review your market

During this time it is understandable that the market may turn away from what was considered disposable income luxury purchases towards what they consider essentials. That being said, with more time on their side, we should watch the market make use of the downturn to spend more time researching their purchase goals for life on the other side. We all nurture hope and some form of research may keep the embers of 'retail therapy' alive.

When it comes to your market's available spend, there are obviously restraints in a tight economy. While we will talk about payment terms, care in pricing decisions, you can consider how to add value to the purchase and as another idea to get the consumer looking further out, consider promotions and competitions where you place the closing date of the promotion out where you expect the good times to start returning. This can have a psychological effect on your market showing your forward planning and belief.

If I had this conversation with you last year and asked you who were your customers I hope you wouldn’t have told me ‘everybody’. However, right now you need to know these four customers so that you know how you can market to them and to ask what do they need, what can you supply and how you will sell at what price.

• Who is your most profitable transaction customer? They buy the product with the most dollar value margin.
• Who is your most regular sales customer? They are repeat buyers on a high-frequency cycle.
• Who is your highest LTV (Lifetime Value) customer? They have the highest value of sales over their length of time as a client.
• Who is most likely to buy from you despite the economic environment? Their buying reason trumps price and supply reasons.

Review your offering

At this time, does the priority of your range of products or services need to change? Does the plumber who specialises in luxury bathrooms, need to offer renovation style services for the person at home, dealing with home matters considering they can at least make use of the time working on their home maintenance. Will the finance and insurance specialist looking to focus on investment portfolios, need to refocus on the home, car and personal insurance reviews to assist budgeting for a client but leading to new investment business in the future.

One key question you may want to look at right now is where volume and profitability are still likely to come from within your brand or product or services. Once you know that sweet spot, within the current market, it will help guide some of your focus and investment decisions. You can’t rely on last year's Christmas sales figures so draw on the advice of your team, your customers and be informed with what is happening within the community around you. No ostrich opportunities for a break here.

Review your message

Within a recession, market downturn or a community crisis, it's important that you review your marketing messages. Leaving last year's social media campaign running at this time could leave you with egg on your face with a tasteless or ill-conceived offer or slogan being posted across the next Facebook post.

Equally, without moving your business to a price based situation which you may not be able to recover from, you do need to consider the buying decisions of the consumer. Has the current market conditions meant that people expect more for their dollar in volume or added value? Is there a desire for more security that can be addressed via a firmer guarantee, or should you consider extended terms to facilitate the ability to buy?

Always assess your brand messaging in line with your core values. Don’t let pressure define the character of your business and ensure that the quality of your USP isn’t degraded by circumstances that are likely to be gone like another season of winter.

“Recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when Jimmy Carter loses his.”

Ronald Reagan

THINK

Think about your goals

Your goals right now may seem fractured and unrealistic, but it is important that you don’t drop your head. It’s vital that you know your original intentions because they very likely define the culture and character of your business. Yes, there may be a need to adjust timeline and current expectations, but this is not the time to throw your ‘big dreams’ away. Hold fire and start taking aim again.

What can you do to look at your business goals? First, if you don’t have goals and you are simply the overpaid rat in the wheel you call a business, take a knee! Look at what is happening and ask yourself what do you want out of this situation. Interestingly, while in moments, when business is thriving you may have given a list of grandiose ‘prizes’ you want by your name or on your mantlepiece, right now when things are tough, you will probably find that your goal list is closer to the truth than you’ve ever known.

Start asking yourself about how you can record this moment and the goals that are in front of mind in such a way that they will become your signposts for the next twelve months. That is simple enough. I don’t mind if you’ve got a retirement goal in there but when a marksman takes aim through his sights to a target, the closer his eye is to the sight, the more likely he is aligned to find his mark. Keep it short, tight and real. If you haven’t heard about SMART goals, do some research on that model as a guideline. Michael Hyatt has great material on goal setting in his books and starting with the Beginners Guide in the link above.

Think about your opportunity

During a downturn or lapse in market conditions, there is often a lull from the previous noise that is your opportunity. As other competitors pull back from the market, two key aspects can take place. Your ability to take market share opens up and the cost of getting both brand awareness and market qualified leads can decrease. Unlike a sprint, this is the time to take a lead position and keep ahead of a lagging competition.

In times like 9/11, even industry heavy-weights were saying ‘marketing will never be the same again’ and ‘we can’t plan for the future’. That is fundamentally flawed and reactionary talk. Marketing will maintain its principles and adjust to market conditions and you can plan for the future, it just means you will do, measure, adjust to find what the market wants. These principles haven’t changed, it's just that we expect the time-frames to be shorter and the adjustments to have a higher frequency. Talk the talk and walk the walk.

So how do you take advantage of marketing opportunities? The first key is to know your customers. Start talking to them about what their need is in these changed conditions. Secondly, be observant of your competitor's response. Are they changing behaviour, product offerings or price? Finally, work with a key marketing partner who can monitor the digital marketing realm for you. Particularly in areas like PPC (pay per click), there is every likelihood that previous competitors will leave the market or reduce their spend. This means a new opportunity for market share and possibly reduced spend on lead acquisition.

Think differently

The challenge at the moment when it has been ‘sprung’ on you is how to adapt and think differently. You’ve had confidence in what you’ve always done. The trouble is that the market isn’t doing what it has always done, so you need to think differently.

During a downturn, offering early buy allowances, changes to terms with extended financing and generous return policies all help maintain custom. With the recent Coronavirus situation affecting the aviation industry, Air New Zealand has changed its usual policy to charge for changes and told ticket buyers they can change their dates as many times as they like (or need to).

Be willing to adjust your margins to allow for competitive negotiation, particularly where consumers are looking to make long-term purchases during this period. They will know the market better, having more time and equally have more time to shop around and negotiate remotely.

While these market conditions may seem the counter-intuitive time to launch a product, it may actually be your greatest opportunity to launch in the eye of the storm. Depending on your market, there may be a strategic decision to be made if your marketing and manufacturing or supply costs are already in hand. 

Some examples include Arms and Hammer laundry detergent who launched a new cheaper solution in the market and took market share with their original intention to be a price leader. Coleman camping gear did well launching when luxury holidays in the hotel weren’t considered the family’s choice for budget reasons and a similar situation helped Hyundai to enter the market.

Think calmly 

When it comes to market spending, be wise, be calm, be intentional. As in all normal business conditions, taking your foot off the pedal will give a competitive advantage to your competition. Understand your own ability to maintain a market presence. Your sales process and margins may be different, but it is unlikely you will be in a sensible position to afford the catch-up costs if you have conceded market positions geographically, within a category segment or as a brand leader.

If you resell a product or brand, now is the time to also work with your distributors. They are in the same boat as you. Your health is their health. Consider how to look at your current stock, your ordering and terms agreements and any bulk buy incentives if you are in a cash position to be able to make some clear wins by having the cheapest available product in the sector.

One thing your market is looking for is leadership. Your customers know the market conditions as well as you. Many are business owners and leaders who are facing their own challenges. In this time your brand can be defined to a greater degree by the confidence and consistency it brings to the business it does. In Australia, we know a retail homewares brand called “Rugs-a-Million” that has been ‘going out of business' for over a decade with their closing down sales. Right now, your market audience wants to see confidence because they still have a choice in whom they can spend their money with.

“Only when the tide goes out do you discover who's been swimming naked.”

Warren Buffett

ACT

Act instinctively 

If you have an entrepreneurial head then don’t let go of the dream you believe the market needs. The book world has been changed by Amazon because in the 2009 recession they still launched the Kindle that has become the electronic reader of choice in the market.

If you have been in business for some time, it is likely that you ‘know’ your customers.

Don’t lose your grip on what you instinctively know. Yes, it's good to check your findings with an advisor, customers and industry specialists. Use these resources to flesh out your thinking but listen to the gut that helped you launch your business.

Act consistently

If you are a market leader who the community knows as a consistent advertiser and not based on seasonal fluctuations, don't’ let them ‘miss you’. In the recession of 1990-91, it was surprisingly McDonald's that pulled their advertising spend and promotional budget. The outcome was two players in Pizza Hut and Taco Bell who grew their sales 61% and 40% respectively. While those two food franchises grew some of the expense was carried by McDonald's who also paid a price with a 28% downturn in sales.

A clear indicator to market confidence will be your language in word and deed. If your business works off long-term relationships, your potential customers will be watching your 'speak'. Like kids looking at a parent for safety and confidence, your customers still want to know you'll be around. Even in good times, you kept delivering proof to new customer enquiry that you were a stable partner with years of experience behind you. Don't let that change just because this winter is colder than most.

Act bravely

Notice I didn’t say Act brashly? This needs calm, intentional leadership for the future. Back in 2001 following the 9/11 attacks, GM made the bold decision to place ads promoting special deals with a clear message that they were taking their role in developing a stimulus for the economy seriously. Some may have felt it was opportunistic but with the right message and a level of transparency that as a country "we are in this together", the promotion paid off. Some of your decisions in the coming weeks will need to have courage, but it is this motivation to move forward that will take you, your team, customers and market forward.

In 2001's 9/11 there were many similarities with sporting events cancelled, air travel difficult and movie theatres empty. However, the need to recover was also part of the human condition, and businesses that embraced the challenge were the ones who developed a stronger foundation and structure to the way they do business.

When it comes to your previous market spend, there may actually be an opportunity to increase your marketing with strong indicators you will also increase market share accordingly. Thinking through what is obvious, as some players retrench or retreat, the noise turns to more focused messages for your brand and possibly opens up lower-cost marketing windows.

Act and measure frequently

If you are building and selling, serving and consulting to build your business, it may not be a good time for you to take your eye off the horizon. See my LinkedIn article on business measures and KPIs, Are your eyes on the horizon or your seat belt?

There will be indicators around your website, sales and enquiries that are currently showing you what is happening in your business. To make intentional decisions, you will need to act, but don’t let too long a lag period happen between monitoring the data and adjusting your strategy. This period of time is like sailing through the storm while also being wary of the reef. You don’t have an open ocean to work with minor, frequent and quick adjustments will be necessary for you to remain nimble.

Picking up on this point can mean having a dashboard on data at your fingertips, or if you have one asking if the key performance indicators are currently apt for the market you are in. If you don’t have access to market data such as what is happening in the digital marketing space, then knock on the door of a supplier that does and ask them for the ‘weather forecast’ to get your business through this storm. Many digital agencies can tell you about your's and your competitor's position within the Google eco-system and also provide advice on market search volume as an indicator of market health.

Act strategically

Thinking about the next steps for your journey, it's important to look at strategic options. If your expertise isn’t in either marketing or the power or amplification of digital marketing then now is the time to come close to your advisor set. 

Draw on the expertise around you and make use of the data analysis they can provide on your own position and your competitors to make strategic and timely decisions. 

Knowing you have the foundation to act confidently will help your team come along for the journey. Now if you know what you are standing on, look up. Looking at your feet won't help and you need to start asking what is the next step or steps in your strategy. One of the key phrases I educate every business owner I work with is ‘What Next?’

Like a game of chess, your success doesn’t come from your next move, but the move 4 or 7 steps ahead. If you plan to launch a product in Facebook with an ad campaign; “What Next?”, if you aim to start an email newsletter sending out weekly updates on your business, product or offer; “What Next?”

A strategy is built around knowing your own moves, anticipating the competition’s and correcting your mistakes. Nimble, strong and planned will define a great strategy delivered.

“You can never go wrong by investing in communities and the human beings within them.”

Pam Moore

Thrive in these Times

At Excite Media, we have recognised there is always an opportunity in the midst of the cloud. We are working with our clients to help them consider their options and where possible, the ability to act on growing their business. 

Our team have created a Thrival Plan to walk our clients through the thought process for their current digital marketing to assess continuity options, marketing opportunities and timing of strategy and activity in the next twelve months. At the same time, there are some clear "Do it now" tasks that we are activating for our clients to ensure they are ahead of the curve. We consider clients part of our family and we want to support them in the calm and the chaos with measured advice.

It may be through embracing the gift of time and space to reimagine your business and considering what you have currently evolved into. Our business operations today are normally the result of many time and evolutionary forces around us chipping at the rock of our original dream. 

Now is a moment where you CAN make an intentional change to position yourself for the future. Don’t consider that this imposed 'pause' or 'drive into pit lane' is for life. Instead, consider what you need to do to get back on the track. Is this a change of tires, a refuel, a wipe of the windscreen or a change of driver for the next 20 laps. 

Whatever your decision, don’t be thinking about life in the pits. Keep your eye on the checkered flag and today you should be planning for reentering the race as quickly as possible.

“This Too Shall Pass!”

Case Studies:

With each of these stories, there are articles, Wikipedia and documentaries on YouTube to inspire you. Find something close to your interest and learn from the survivors and the market leaders who are the Phoenixes flying above you.

Victorinox - From Swiss Army Knives for Officer to Watchmaker and Fashion Icon.

Louis Vuitton - From boring trunks to desirable luggage and Fashion Marque. 

Microsoft - From Motel room to Global Software to Philanthropist. 

Dominos - From $500 buying the first pizza shop to a food delivery leader.

Wrigleys - From free chewing gum in baking powder packets to a global brand.

Walt Disney - From bankrupt mouse to global media empire.

Recession Success Stories: Inc.com 1st Jan 2008