The gut response to a sudden economic shock is to cut spending, hunker down and recalibrate. But hiding from a problem seldom makes it go away, and rash decisions are rarely good ones.

Many companies look to marketing and PR as the first areas to pull back on. They see these functions as non-core to their operational activities.

The difference now, in these unprecedented times of Covid-19, is that many firms are having to close their doors to customers. This is especially the case in the retail, hospitality and leisure sectors. But it is also true for many manufacturers, for the housebuilding sector and lots of SMEs.

This presents an existential crisis because affected businesses can no longer rely on the marketing benefit of word of mouth. Companies of all sizes and shapes are more reliant than ever before on how they communicate and market their organisations. Effective marketing helps companies remain visible to core audiences and their community of support, and this helps them avoid being left behind as the economy picks up.

How you market your business during the pandemic will determine whether your enterprise will be successful or not. Marketing is a tool used to create and maintain demand, relevance, reputation, competition and more. Without it, your business risks closing down due to lack of sales.

Check out these 5 reasons why you must keep on investing in marketing.

  1. Why is marketing important?
  2. Communicating during a crisis
  3. What are the dangers of stopping your marketing activities?
  4. How to get the most out of your marketing
  5. How marketing will help you benefit as the economy recovers

1. Why is marketing important?

Right now, in the face of coronavirus and a continuing (albeit easing) lockdown, do you know what your customers want? Do you think they trust you and your products or services? When was the last time you saw a customer tweeting about you? Were their comments positive or negative? Worse still, are formerly loyal customers turning hostile?

The answers to all these questions lie in marketing.

Loyalty

The only way to understand what your customers want is to engage with them. The starting point is to carry out customer research to find out who your customers are. Marketing research segments should be based on demographics, psychographics and consumer behaviour.

Ask yourself how old they are, how much they likely earn, what they do for a living and how well educated they are. What are their interests, hobbies, aspirations? And what are their buying habits? For this, you may consider how often they purchase online, do they carry out in-depth research ahead of making a purchase, are they price driven or brand driven?

People who think a company understands who they are and what they want are far more likely to make a purchase and evolve into returning customers.

Marketing research helps businesses to build a relationship of trust and understanding with their customers. Once this is established, you will be in a good position to ensure your business delivers what people want, at the right time. This helps build loyalty among your customers, which will ultimately lead to enhanced sales and profits.

Reputation

The success and future growth prospects of a business are closely correlated to its reputation. So it’s reasonable to say that reputation determines a company’s brand equity – and therefore its potential for greater profitability.

Given the majority of marketing activities are geared towards building the brand equity of a company, it is vital that companies seek advice from their marketing agencies about how to retain and grow their brand equity during challenging times.

A business’s reputation is built when it effectively meets the expectations of its customers. The difficulties many companies now face, as they learn to live with the virus, mean many will not be able to meet their clients’ expectations.

To overcome this, marketers are adept at devising strategies, using effective communication, branding, PR and CSR strategies to ensure that a business’s reputation is maintained. During a period of crisis, it is more about finding the ‘right’ way to talk to customers, understanding the need for empathy and demonstrating what you are doing for the wider good – it’s not just about product promotion at the moment. Success depends on trust, empathy and reputation.

Informing

Marketing informs your customers about the products or services you’re offering them.

Through marketing, the customers get to know about the value of the products, their usage and additional info that may be helpful. Done well, it creates brand awareness and makes the business stand out.

As we emerge from lockdown, whatever business sector you’re in, the competition will likely be fiercer than before. That’s why it is vital to remain a consistent and reliable voice throughout the crisis, building trust and reassuring customers as external factors, such as government policy, change.

By communicating your core values, through empathic communication, marketing helps your business become a market leader.

Growing sales

Marketing in a vital ingredient in your business’s goal to grow sales and profitability.

Marketing utilises different, more subtle methods to promote your products or services than advertising. This is especially the case with PR, which seeks to gain third party endorsement for companies/brands.

Given that during the pandemic people have been concerned about their own health and those of others, it is vital that, as we emerge from lockdown, any communication or marketing strategy takes into account how people are feeling.

As discussed earlier, this is all about showing that you know and understand who your customers are, how they feel and the measures you are taking to meet their requirements – and those of the broader sector within which you operate – as we emerge into a ‘new normal’.

When customers are happy about your products or services, they are more likely to become your brand ambassadors. They will spread the word via social media, and your sales will start to increase.

Maintaining relevance

There has been a tendency in recent years to attempt to ‘disrupt’ a consumer’s opinion about rival products in an effort to shine a positive light on your own company and its products and services. We think this is an overused word and an inappropriate strategy as we emerge from lockdown and learn to live with coronavirus.

Now is the time to stay in your own lane, focus on what you do best, show what you are doing for the greater good via your CSR plan and communicate all this in the ‘right’ way to your customers and stakeholders.

As we’ve already said, this is about adopting the correct tone, one that resonates with your customer personae and emanates understanding and empathy.

Every relationship needs to be nurtured and maintained. Marketing helps your business to maintain a good relationship with existing and new customers by showing that you remain relevant even in turbulent times.

2. Communicating during a crisis

It is notable that during the pandemic many companies have closed down social media and live chat channels. This gives the impression, most likely true, that they are afraid of coming into direct contact with their customers.

This is a mistake. Disgruntled customers will take to social media to make their opinions heard whether or not the company is there to answer their concerns. So, an issue that could have been handled sensitively and been resolved, could go viral with the potential of bringing about a company’s demise.

In the current environment, effective marketing communications must focus on building trust and expressing empathy. Companies failing to exhibit these traits, particularly during a crisis, are setting themselves up for potential failure.

We strongly recommend that all businesses dust off their crisis communication plans. Transparency is crucial in the current environment. Smart brands will understand that it is best to proactively communicate with all stakeholders, both internally and externally, even when times are hard. 

To ensure effective messaging in a time of crisis, it is important to communicate swiftly. However, it is crucial not to rush out any statements. Effective messaging needs to be informative, measured, express empathy, avoid hubris and be positive without being flippant.  If you are a customer-facing business, it’s really important to inform people about the health and safety measures you are taking to protect people when they visit. Your messaging should also be in line with government sentiment and guidance and be consistent across all platforms and audiences. It should also be updated regularly to remain in line with external advice and policy changes.

If you do not have one now, prepare a detailed crisis communications plan. Ensure that you communicate in a timely way, with statements from company leaders about the crisis delivered both to internal and external stakeholders.

Develop a deep understanding of what customer and employee expectations are: it is vital to stay informed as the situation continues to evolve, and with it, public perception.

3. What are the dangers of stopping your marketing activities?

There is plenty of evidence to suggest cutting back on marketing spend during challenging times could actually be detrimental to your company.

In the 1990s, a MarketSense study concluded that the best strategy for coping with a recession is to balance long-term branding with promotion for short term sales. The study highlighted brands like Jif and Kraft Salad Dressing which generated sales growth of 57% and 70% respectively after increasing their marketing during the recession.

In the 1980s McGraw-Hill Research studied 600 B2B companies and found that those who maintained or increased marketing grew significantly, both during the financial crisis and in the years that followed.

In the 1970s, an American Business Press study showed that companies who advertise and market aggressively could maintain and increase sales during a recession and in the year that follow.

Buchen Advertising tracked the performance of various US companies in the 1940s, 1950s and in 1961 when many had to grapple with a series of economic setbacks. The firm found that sales and profits plummeted at companies that slashed their marketing spend and that even after the recessions had ended, those same companies lagged behind the ones that had maintained their marketing budgets.

In the Great Depression of the 1920s, advertising executive Roland S. Vaile tracked 200 companies through the recession of 1923. In the April 1927 issue of the Harvard Business Review, Vaile reported that those companies that had continued to market and advertise during the economic downturn were 20% ahead of where they had been before the recession. Those companies that reduced their marketing and ad spend were still in recession, trading at 7% below their 1920 levels.

While these are historic examples, they are no less relevant today.

In the global financial crisis of 2007/2008 one of the most successful businesses was Netflix. It was able to profit from the dying, but once profitable video rental store and the newly emerging video-on-demand services.

In 2009, at the peak of the recession, Netflix gained 3 million members. This was due to its its new tv/movie streaming plan, which allowed subscribers to access an unlimited amount of entertainment a month.

By adding a range of price plans and different services, Netflix showed that it understood customers had a variety of needs, so it became notable for its empathic approach and excellent customer service. These things combined eventually earned Netflix brand recognition. As of today, Netflix continue to grow.

In April, Netflix said it had nearly 183 million subscribers, making it one of the world's largest entertainment businesses. Even as the pandemic unfolded, it added 2.3 million users in the United States and Canada in the first quarter and added 13.5 million internationally. The company was quick to tap into the need for home entertainment during lockdown and kept in contact with its customers via regular emails. It created interest by listing the top 10 shows people were watching in their various locations around the world.

Another marketing tactic in difficult times is to launch a new product. Amazon also thrived during the financial crash of 2008/9 by continuing to come up with ideas for new products, and this was when it launched the Kindle e-book.

The new Kindle products helped Amazon grow its market share, and the company’s sales rose by 28% in 2009. Cash-strapped customers recognised Amazon as a company that understood their needs by introducing a lower-cost alternative, and they rewarded the company by purchasing more e-books than printed books in Christmas 2009.

Although the natural inclination for companies is to cut back on marketing during a recession, those brands that maintain their marketing, advertising and PR budget and/or change their messaging can get a long-lasting boost in sales and market share.

We love this quote about marketing and advertising in a recession from Sam Walton, the founder of Wal-Mart.

When asked, “What do you think about a recession?” he responded, “I thought about it and decided not to participate.”

So, if you are a CEO, CMO or MD, being asked to cut back on marketing and ad spend because the management says it can no longer afford it. The answer has to be: “But we can’t afford not to do it.”

4. How to get the most out of your marketing

Once you understand that for your business to survive – and thrive – during a sales downturn, you need to engage in marketing activities, you will rightly be thinking about how to get the most out of your marketing spend.

This section is aimed at managing directors and business owners, as well as CMOs, as everyone at the moment is looking to make their budgets stretch, without damaging output.

Instead of cutting your marketing budget, re-evaluate what you’re doing. If existing methods aren’t working and you’re questioning the amount of money that you’re spending, it will be better in the long run to alter your strategy rather than completely ignore marketing.

Once you’ve established who your customers are, and their buying habits, here are some further things to consider to help you get the most out of your marketing spend.

Don’t overextend yourself

Focus on the marketing channels that attract your ideal customer. For example, if your customers don’t use Twitter, there’s no need to spend money on Twitter advertising or time tweeting. Take a look at which of your marketing efforts are bringing in the best results and direct your money and time to those areas.

Are your messages resonating with customers?

If your subscribers aren’t opening your emails and very few people are clicking your ads or calls to action, it's likely your messaging isn’t connecting with your customers.

It may be that you are too focused on product promotion. Customers will be far more open to supporting your business if they see that you are communicating with empathy and that you are doing something for the wider community.

An example is Body Shop, which delivered 25,000 bars of soap and 25,000 tubes of hand cream to frontline NHS workers at the newly opened Nightingale Hospital at London’s ExCel amid the Covid-19 pandemic.

Tweak your messaging so that it shows understanding about the difficulties your customers are likely facing and, if you can, do something to help them.

Repurposing content

You may have advertisements, social media posts or marketing emails that have performed well in the past.

Now’s a good time to reuse them. Think about videos you have created for your website and see if it can be edited into a form suitable for social media. The professional photographs on your website can be repurposed for flyers or brochures. Reusing content can save you a lot of time and money.

Guides or White Papers can be updated and offered as free downloads. Press releases can be re-written for your website or repurposed for different media outlets.

Scaling back

Have a brainstorm with your marketing agency to decide what you need to do to retain your existing clientele and to attract new customers. Remember, it is cheaper to retain existing customers than to run expensive new campaigns to drum up interest from new ones. Put simply, you need to separate the must-have marketing tools from the nice-to-haves by reflecting on how often you use the tool and whether it’s generating leads or engagement.

Your marketing budget should adapt to fit your business. While it may be necessary to make cuts in a few areas right now, you should never eliminate marketing entirely. Remember, you can always add initiatives back to your marketing program when your financial situation becomes more stable.

5. How marketing will help you benefit as the economy recovers

Marketing is all about staying top of mind, keeping visible and communicating with customers. It may not be business as usual, but you need to demonstrate you are doing everything you can to keep abreast of their changing needs.

As part of your marketing strategy during an economic downturn you should invest in upgrading your website and SEO. Done correctly, this will put you in pole position to significantly increase your market share from organic search results. This is likely to then start yielding tangible results in terms of increased sales as soon as the economy starts to recover.  

By following the steps set out in this blog, you will be better placed than rivals to grow your sales in the current environment as well as when the economy picks up.

This guide was written by Lauren Mills, a former national newspaper business journalist and editor. She is now part of the OlsenMetrix content team, specialising in digital, PR, content and crisis communications.

If you would like to speak to one of our experts, please email [email protected] and we'll be happy to call you back.