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Research, Agility, Adaptation: The keys to successfully marketing during and after the recession

The coronavirus pandemic (COVID-19) is collapsing the economy. Having helped consulting clients survive during the last three economic slowdowns (1990, 2001, and 2008) and the H1N1 Pandemic Flu, I am keenly aware that surviving and emerging from the worst recession since the Great Depression will present unique challenges for many companies.

Here are some takeaways from our experiences with the previous, albeit milder slowdowns.

Companies that recovered fastest were more flexible, and had more streamlined marketing processes. Management teams must have the power to make quick decisions – within days, or even hours – and to modify their systems to improve performance, focusing on high impact issues and take the shortest and most effective path to their goals. The best strategy in the world is worthless if it isn’t achieved quickly. Companies need effective process to evaluate and quickly adapt to respond to changing buying behavior.
Spending needs to be focused and effective. Expense cuts that could materially impact customer experience quality might yield short term gains, but can result in serious long-term risks - your accounts receivable can turn into your write offs. Also, don’t ignore opportunities to improve customer experience while lowering expenses.
In past slowdowns, companies that survived and grew were the ones that closely monitored the shifting sands and responded proactively. They did not just wait and hope that changes would not be necessary. They built in capabilities to quickly respond to any change. They also understood that customers may not return to their prior buying behavior when this situation has passed, and ran their marketing strategies against all conceivable scenarios to maximize the probability of success.

To develop an effective marketing strategy for the COVID-19 recession and beyond:

1. Research how your customers are responding to the current situation and the value you provide to them. What is driving your current sales and what products or services are they buying? Has the way they buy your products or services changed, and why? Have their buying criteria changed? What value do they perceive in your relationship with them?

2. Don’t cut the marketing budget; analyze and track everything before you trim your budget and reduce any unnecessary overhead expenses. You need to know exactly what return each marketing investment is providing. Your marketing strategies need to be focused on your most valuable, happy customers. Continue to gather data to find out how you’re benefitting your customers during rough times and to prepare for the post-COVID-19 economy.

3. Research your competition. Find out what your competitors are lacking, and what they’re offering that customers need. If you can identify their market audience, you can take advantage of that information and use it for competitive targeting.

4. Once you complete your market research, adjust your marketing strategy and tactics. Run tests to find the most cost-effective strategies. Continually refine your recession strategy and narrow it down to the best performing strategies. Those who survive a recession are those who are able to adapt and pivot easily into the recovery.

5. It is well documented that companies that focused and even increased their advertising during a recession when competitors were cutting back improved their market share and return on investment at lower cost than during good economic times. Your advertising should highlight how you can help. Develop marketing campaigns to reach past customers. There is a possibility that the sales process will be permanently altered in many industries by the COVID-19 recession.

6. You don’t get anyone’s attention by telling people what you do, but what they will get from you. Communicate your value in all your strategies. Advertising should stress the value you provide and not corporate image. It is the good old “What’s In It For Me?” factor. Your messages should be geared towards interesting your customer and prospects in knowing more about how you can help them.

7. Evaluate the effectiveness of your marketing channels. Drop your weaker distributors and upgrade your sales force by recruiting individuals dismissed by other companies. Support your distributors by extending financing and generous return policies that motivate them to stock your full product line. BUT remember your account receivables can turn into your write offs. Also, you can consider acquiring weak competitors.

8. Evaluate your pricing strategy. Customers will be shopping around for the best deals. You do not necessarily have to cut list prices, but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-standing customers, and price smaller pack sizes more aggressively. Price cuts attract more consumer support than promotions. Again, remember account receivables can turn into write offs.

9. How you communicate in a crisis shows your customers and prospects who you are as a company. Make sure you are appropriately staffed to respond to customer calls and online. Their communications should always reflect your advertising message that you are committed to servicing existing customers rather than trying to be all things to all people. Remember, how you react to a crisis can impact how your company is seen well into the future.

10. Forecast demand for each item in your product portfolios. Consider dropping weaker products or services. Develop new products or services, especially those that address the new reality and thereby put pressure on your competitors. But advertising should stress superior price performance, not corporate image. Gimmicks are out; reliability, durability, safety, and performance are in. As you plan, consider the impact to your business and your supply chain. Successful firms monitor their critical suppliers’ health and lead times to ensure their survival.

Remember that this situation will not last forever. Sucessful comapnies do not abandon their marketing strategies in a crises; they adapt them. Those of us who have ridden economic slowdowns in the past have learned the hard lessons needed to keep our companies profitable and know that management must focus on more than just short-term survival: they must be aggressive with a turnaround plan, and "quick on the feet" as the ecomomy adjusts to a new normal - moving quiclly to implement the changes. Good marketing strategies help a business durning a recession, and will help business recover quickly afterward.

While not all of these ideas may apply to your business, consider the ones that may be helpful to achieve your goals. Above all, be optimistic. Don't assume that decreasing demand and revenue must be addressed by drastic cutbacks. Instead, take advantage of the turbulent times: rethink how your business works, An economic slowdown can be a tremendous opportunity to strengthen your competitive position and financial performance with the right mix of strategy, innovation and courage.

In Short: Stay the course. There'e no silver bullet. Be real to your customers and prospects. Remain agile and creative and emerge on the other side ready to meet your customer needs. Care and show them you care - your business will likely survive the crisis and come out better off in the long term if you handle the crisis like a pro.

Ken 2020 About the Author: Ken Wilson: Marketing strategist, consultant, educator, author, facilitator, and university lecturer. He can be reached at ken@wmg-mn.com or 763-476-2216.