Marketing in a crisis, whether it’s a company-specific crisis or a country-wide one, always raises the question of whether to continue spending or cut the budget to alleviate some financial pressure. The COVID-19 pandemic, the national lockdown, and the fear that an unprecedented recession will follow, certainly constitutes a crisis for businesses.
Many are under enormous financial pressure to pay staff and suppliers, despite the fact that they can’t work at full capacity, or at all. Returning to normal, for those companies that survive the pandemic, won’t be as simple as continuing business-as-usual either.
According to Steve Brown, author of The Innovation Ultimatum: How Six Strategic Technologies Will Reshape Every Business in the 2020s and the former futurist at Intel Corporation:
“Consumers will ask more questions about where products come from, how safe food is to eat, and what it took to produce and ship goods to their homes. Business travel will drop, perhaps permanently, and digitization efforts will rapidly accelerate, as the increased use of telehealth, online education, and home grocery shopping have ably illustrated.” ¹
So how should businesses prepare? And what does marketing have to do with it?
The argument for marketing in a crisis
Despite expert advice to spend on marketing when a crisis hits, many companies still cut this budget first. It makes sense in the short-term – less money leaves the bank account so the quarter on quarter numbers look better. But in the long term, the cost in terms of market share and customer perception can outweigh the temporary financial relief this offers.
Studies going back almost 100 years have shown one clear message: Companies that maintained or grew their ad spending during tough times increased sales and market share, both during the crisis and afterward. Even when doing so increased short-term financial pressure.
Continuing to spend on marketing gave these companies the opportunity to re-position themselves while their competition took up less customer attention, to project an image of stability and thereby generate trust, and to increase their share of voice which typically leads to an increase in market share.
As businesses seek to adapt to the customer demands that are most likely to shape their post-COVID normal, clear communication with customers and employees alike will make or break the success of the change.
Whether the changes are simply due to speeding up delivery against previously set strategic goals, or a complete shift in approach and offering, change management cannot be successful without thorough and transparent stakeholder engagement.
Marketing through COVID
Businesses that need to make fundamental changes to the way they work, and even to what they do, must view marketing as critical spend as they reposition. It has to form part of their crisis management strategy, with a focus on increasing sales and market share during the pandemic. It also has to form part of their change management and repositioning strategy.
Companies must help their customers understand their “new normal”, and generate trust amongst both existing and prospective customers. They must also help their employees see the purpose in the change, and imagine their role in it.