The Washington Post has recently reported, “Already, it is clear that the initial economic decline will be sharper and more painful than during the 2008 financial crisis” as more and more Americans are forced to stay home.
I’ve been saying it in conversations for a few months and now the pundits we see on network television are saying the same thing. There will most certainly be a recession in our not-too-distant future. Coupled with quite possibly the worst public health crisis of our lifetime, the bravest of marketers could be forced to start slashing and retreating.
Consumers (me included) are worried about their jobs and how they will be paying bills. Businesses (mine included) are worried about what tomorrow will bring and how they will be able to keep their heads above water. But now is not the time to stop marketing. The key is to understand how your customer’s mindset has shifted and how it is evolving.
When you cut marketing spend, your brand’s “share of mind” starts to erode, but conversely, an increase in share of voice can lead to an increase in the share of market. As a marketer, I am focusing on three things that you should be looking at as well.
- Getting to know our customers in a way we never have time before
- Keeping the line of communications vibrant and engaging
- Stepping into our brands
Get to Know Your Customer
Now is the time to cement our relationships with customers. With no players club to run, no slot tournaments to cheer on or gifts to hand out, you have a unique opportunity.
Take a deep dive into your database. I don’t mean ADT, theo or frequency. Yes, those are important, and they should be the foundation of your reinvestment strategy. But, how much do you know about your customers? As I always say, one $150 customer can be very different from the next $150 customer. Now, more than ever, you need to understand your customer motivations and triggers. Yesterday’s “can’t live withouts” may be postponed or expendable tomorrow. Your customer database is the biggest asset you might have during this stoppage. Making sure you can focus on their needs and motivations can create loyalty when you need it the most.
Vibrant and Engaging Communications
Maintain your advertising but use your messages to connect. PIMS ( Profit Impact of Marketing Strategy) research has shown adverting has a long-term effect on sales (up to five years after the ad is shown) but also that cutting ad spend can put your brand and company at risk—taking longer to recover when the market improves. We have evidence of this going back to the 1920s when advertising executive Roland Vaile tracked 200 companies during the 1923 recession. He reported companies that continued to advertise during the downturn were 20 percent ahead of where they were before the recession. Buchen Advertising tracked trends for the recessions of 1949, 1954, 1958 and 1961 and found revenue dropped at companies that cut advertising and that they continued to lag behind those who maintained budgets. There are similar findings in the years and recessions that followed.
Uncertainty makes us yearn for reassurance of the brands we love, and let’s face it more people than ever are watching television right now. If you have to trim your budget, try to maintain frequency by shifting to smaller units or shifting from mass to targeted.
Stay connected with customers. If ever social media will prove it’s worth to our industry, it will be now. Holding your customer’s hand in a “we’re going to get through this together” manner could be your secret ingredient. Utilizing digital marketing channels to create conversations with customers can allow you to harness one of the most powerful marketing tools you can have: word of mouth. This is also a great time to test posts to enhance your ability to work with the algorithm that favors brands that are truly engaged with their fans.
Embrace your brand culture and let it show. The decisions we make for both our customers and employees are sending signals far and wide. Current conditions can easily cause us to shift focus to the balance sheet, but while it is important to keep an eye on the finances, it is perhaps more important to keep an eye on our respective brand cultures.
Promotion or Brand?
There are two types of marketing: promotion (come here now) and brand (long-term). When times are tough, it’s easy to assume consumers are looking for bargains and ways to stretch their dollars, but a heavy reliance on promotions, such as discounts and free play, can erode brand values and profit margins when used aggressively. Brand messages based on emotion can build and maintain strong bonds with customers. A study published by the World Advertising Research Centre shows emotional engagement ads to be more profitable than low price or special offer ads (even in tough times).
This morning one of my emails read, “If you are in the ‘I’ll just wait for this to blow over’ camp, stop. This isn’t a ‘do nothing’ time in history. This one requires you to make some upgrades and changes to what you’re doing.” Factors that cause our businesses to slow down can have a way of shining a spotlight on ill-prepared businesses. As marketers, we can look at this time as the opportunity to review and revise strategies and plans and prepare for the day we’ll be able to reopen our doors. I’ve always said that I love a casino opening. Perhaps that’s my silver lining.