As U.S. businesses aim to recover from the COVID-19 pandemic, marketers are making adjustments to strategies.
Indeed, companies can learn from how their competitors have adapted in the crisis. Some have been forced to make radical changes to their business models to offset lost brick-and-mortar sales or reduced consumer spending. Others have weathered the storm by shifting their lead-generation strategy, sales process or sales message.
If your business has been disrupted by the novel coronavirus, make these 7 marketing moves.
The COVID-19 pandemic has disrupted marketing on 2 fronts:
When lockdowns began, consumers started shopping in brick-and-mortar locations less frequently, turning to online suppliers for more goods and services.
Consumer shopping priorities also changed amid concerns about the economy and rising unemployment. Overall retail sales fell 41% in March and April compared with the same period a year earlier, driven by store closures, according to research by consumer data platform Amperity. Sales for nonessential items such as fashion and apparel fell the most. However, sales of some essential items such as food rose as consumers stocked up for lockdown.
Businesses felt the impact of these changing consumer patterns. Meanwhile, brick-and-mortar stores had to deal with employees not being able to come in because of lockdowns. Industries hit hardest included airlines, gas stations, restaurants and retailers, according to a retrospective roundup by Barron’s.
About 21% of firms had to close down at least temporarily, according to the U.S. Chamber of Commerce. Others made adjustments to their brick-and-mortar business model or shifted their emphasis to e-commerce. For instance, Pizza Hut launched contactless curbside pickup, while introducing safety seals and other preventive measures. E-commerce platform provider Shopify reported a 53% increase in small businesses creating online stores from March to April.
As the economy has begun to recover, industry watchers are wondering how permanently pandemic trends will reshape future consumer and business patterns. A survey presented in July by private research university Rensselaer Polytechnic Institute indicates consumers expect to continue higher levels of shopping through online purchases and in-home deliveries but are eager to resume in-store shopping, too.
Other signs corroborate that future commerce may trend toward a hybrid of online and in-store sales. For instance, a Retail Feedback Group survey found that half of in-store supermarket shoppers in June also bought groceries online. In short, the pandemic appears to have accelerated the trend toward omnichannel shopping.
These consumer and business trends have in turn impacted marketers and the way marketing is done. Changes have affected marketing budgets, digital spending trends, digital channel preferences and brand messaging.
Cash-strapped businesses have spent less money on marketing, causing two-thirds of digital marketing agencies to see a decrease in revenue, with 16% seeing an increase, according to a survey by marketing agency Uplers. Meanwhile, 47% of agencies have seen a decline in leads, with 27% seeing an increase.
Marketing budgets and strategies have shifted to attract consumers and business customers who have been spending more time online because of the pandemic. While ad buyers are projected to spend 20% less overall in 2020 because of the coronavirus, digital ad spending was actually estimated to rise 13% in the second quarter of 2020 compared with last year’s results, according to a study by trade association Interactive Advertising Bureau.
To get the most out of digital advertising investments, marketing agencies are recommending their clients select promotional channels strategically, according to the Uplers survey. The most popular recommendations are:
Email marketing has become more important as consumers and business owners stuck at home have had more time to open their email. Indeed, email open rates rose more than 20% year-over-year in March and April, according to a report by software provider Campaign Monitor.
Likewise, consumers and businesses are spending more time viewing websites, blog content and social media. Half of consumers say they are spending more time consuming content than before the pandemic, according to a survey by public relations firm Media Frenzy Global.
Demand for business-to-business (B2B) content rose nearly 50% year-over-year in May, according to NetLine Corporation, a lead-generation platform provider.
Webinars are another form of content that has become more popular during the pandemic. With many live events canceled and face-to-face prospecting opportunities down, marketers have turned to webinars as an alternative. The number of B2B companies running ads for webinars increased 14% between April and May, according to advertising consulting agency MediaRadar.
Brands also have adjusted the content of their marketing to address coronavirus-related concerns. By the beginning of April, 7% of all marketing emails contained COVID-19-related content, according to customer data-management provider Validity. Emails on pandemic-related themes had a 2% higher inbox deliverability rate and were 11% less likely to be marked as spam.
Messages related to the pandemic reflect marketers’ awareness of the importance audiences place on empathy toward how customers have been affected. A poll by market research firm Ipsos found 68% of Americans say how a brand responds to the coronavirus will influence their future relationship with that company. About 9 in 10 customers say exhibiting empathy is critical for maintaining loyalty. An equal number say brands must show empathy in actions, not just words.
Some brands have taken a lead in putting this into practice. For instance, more than 82% of car insurance providers offered refunds and credits during the pandemic in light of the economic slowdown and that many car owners were driving less often.
Marketers are divided on how significantly and how lasting the COVID-19 pandemic will affect the future, with most taking a moderate outlook. A month into the pandemic, 45% of marketing professionals were only making moderate adjustments to their methods, while 18% were radically transforming the way they did business, according to a survey by software provider Bynder.
Similarly, 57% felt that COVID-19 would have a moderate, but not transformative, long-term effect on branding, while 13% anticipated permanent changes.
So far, trends are bearing out this cautiously optimistic outlook. The May reopening of many U.S. shopping centers and restaurants sparked a 17.7% increase in retail sales, offsetting the downturn of March and April, according to U.S. Census Bureau data. However, while most chief executives of major U.S. companies expect their businesses to fully recover to pre-pandemic levels by the end of 2021, 27% see full recovery taking longer, according to the Business Roundtable.
This uncertainty calls for vigilance and careful planning and preparation on the part of business owners and marketers.
The U.S. Chamber of Commerce has provided a playbook to help guide small businesses through reopening amid the pandemic.
The guide covers issues such as workplace safety procedures, security, financing and supply-chain planning. When it comes to marketing, the organization recommends you revise your marketing plan in light of your customers’ current needs.
Here are 7 steps to help you implement this imperative:
To plan your marketing strategy, you should first establish your marketing budget. To do this, you should review your overall financial performance since March 2020 and your financial projections to the end of 2021, when the economic effects of the pandemic are expected to have subsided. This will help keep your marketing budget within sustainable parameters that won’t overwhelm your cash flow.
The Small Business Administration recommends businesses should normally spend 7% to 8% of gross revenue on marketing if your annual revenue is $5 million or less and your net profit margin after expenses is about 10% to 12%. However, marketing budgets vary with revenue, profit margins, industry and other factors. Adjust your marketing budget to your anticipated cash-flow needs over the next 6 quarters.
In the process of reviewing your marketing budget, you should review your marketing performance so that you can evaluate your return on investment.
You can use key performance indicators (KPIs) to measure both the effectiveness of your marketing activity and the cost. To illustrate, KPIs that measure effectiveness include:
KPIs that measure cost include:
These types of metrics can help you evaluate what you’re getting out of your marketing investment and how much it’s costing you. This can help you decide how much to put into your marketing budget as well as what strategies to prioritize with your spending and activity.
With a sense of your current marketing budget and performance, you can begin setting marketing goals and making corresponding adjustments to your marketing strategies going forward. To help you make these adjustments, one important step is reviewing your underlying business model to see if it requires any adjustments that will in turn affect your marketing strategy.
Key issues to consider include:
Considering these types of questions can help you determine whether your future marketing campaigns need to reflect any changes in your business model.
For example, banks that were previously offering lobby service had to adjust during the pandemic to emphasize other service channels such as online portals and drive-through service. Banks also began offering emergency loans to small business owners affected by the pandemic. This required marketing teams to develop digital promotional campaigns focused on updating customers on new policy changes and loan opportunities.
Consider how the pandemic has affected your business model and what implications this has for your marketing strategy.
Lockdowns throughout the U.S. have made some lead-generation systems less effective while increasing the performance of others, so it’s important to review how you’re obtaining leads.
As a starting point, identify your current lead-generation systems. Using KPIs such as those mentioned earlier can assist you with this. Are the lead-generation systems you were using before the coronavirus pandemic still generating the results you need to achieve your revenue goals?
If you find that your lead generation has suffered, consider these questions:
Use this list of questions to identify digital lead-generation systems that you could implement or improve to increase your lead volume.
Another way to offset low lead generation is to prioritize customer retention. Acquiring new leads can be time-consuming and expensive, but generating repeat business from current customers can be relatively easy.
You can increase your customer-retention rate by taking steps such as:
To measure the effectiveness of your strategies, track your customer-retention rate. This is a KPI calculated by taking the number of customers you have at the end of a given time period, minus any new customers, and dividing the difference by the total number of customers you had at the beginning of that time frame. The higher the result, the better your customer-retention strategies are working.
If you notice your retention dropping from one month to the next, analyze possible causes. Explanations may include product flaws, website bugs, poor customer service or payment-processing problems.
Another important area to review is how efficiently your sales process converts leads into customers. If your sales process previously required face-to-face appointments, you may need to develop a method of doing sales presentations digitally or over the telephone. Similarly, if you gave live product demonstrations, you may need to develop virtual demonstration methods such as videos or free software trials.
Your payment and order-fulfillment process may need adjustments, too. Do your customers need to be able to pay you digitally? Does your product or service need to be delivered digitally? Make sure your current payment and order-fulfillment processes are set up to accommodate any adjustments you’ve made to your sales procedures because of pandemic lockdowns.
Your sales message may need adjustment in response to COVID-19. As mentioned earlier, customers expect brands to demonstrate empathy — both in words and actions. If applicable, make sure that your website and your communications with your customers relay what steps you’re taking to help them through the pandemic. Include any practical information your customers need to know, such as changes in your policies.
Keep in mind the pandemic may have changed your customers’ priorities and needs, which may call for a shift in your sales presentation language. Review the needs and benefits you currently are emphasizing in your sales presentations, and make sure they still align with your customers’ current situation. If you’re not sure about your customer needs, consider conducting an online survey or interviewing individual customers by phone. You also may be able to draw inferences from market research or adjustments made by your competitors.
Whether you’ve experienced a downturn during the coronavirus outbreak or your business has held firm, updating your marketing strategy at this pivotal moment can position you for stronger performance in a post-pandemic economy.
Reviewing your business model, lead-generation systems and sales process and message can help you identify weak points to fortify as well as opportunities to seize.
A professional marketing agency can help you navigate through these challenging times and steer a course towards an optimistic future.