There have been many Coronavirus articles that advocate brands need to keep their spending up during a recession. The problem is that we are not yet in a recession. There are more unknowns than that. We can’t plan, however, because we don’t yet know how long the stay-at-home orders will remain, and that means we don’t yet know how this will impact our brand. What you likely know is that your finance leader has just come up with new scenarios for the year, and you need to make cuts. I have been there many times.
However, what you don’t know now is how many more rounds of scenarios you will face before you feel comfortable knowing what to do. The reality for the marketer is that we will only be brought into the discussion after the CEO and Finance leader have agreed on the number. The most significant factor in your decision-making during the Coronavirus comes down to TIMING!
1. Your first loyalty has to be for your people
Here come all the arguments that brands should be investing at this time. And, that’s when we realize this is Coronavirus pandemic, not an economic recession. Any charts from the banking crisis of 2008 might be irrelevant. From a financial reality, the overall company expenses in 2020 will be cut, many times by 25% to 50%. My first reaction is, “yes, keep your brand investment strong.” There are 100 years of proof that says brands should invest, not divest. But my second reaction is, “how do we stand up for our people, and do everything we can to minimize layoffs?”
In 2020, the choice could come down to:
- fire people
- keep advertising
Even as the marketer, I would have a hard time saying “yes, but the charts say we need to keep investing.” Maybe in 2020, the brands that take a stand to keep their people during the Coronavirus crisis will win in 2021 and beyond. People will realize that the brand has a soul.
On top of that, you must think about managing your talent and keeping the best salespeople, smartest R&D talent, the best supply chain, and the best marketers on your team so that once the economy starts back up, you are ready with the best team possible.
2. Build in as much efficiency as possible
In the first week of the Coronavirus shutdown, every brand seemed to send out a useless and rather annoying “we are there for you” email of re-assurance. The following week, we saw every brand widen their logo to promote social distancing. Now in April, we are getting flooded with salutes to healthcare workers. Every salute to the Coronavirus heroes is nice, but you still need to find a unique message or you will get lost within the clutter.
Timing is everything. Divide your thinking into three simple buckets:
- What to do during the Coronavirus shutdown
- How to kickstart the brand once the economy starts back up
- How to drive growth once things seem normal again
The problem with planning is you don’t yet know is how long the shutdown lasts, yet you need enough money remaining in your budget to kickstart the brand once the economy starts back up.
On top of that, if your revenues remain strong during the coronavirus (e.g., toilet paper), keep spending. If your revenues are completely onhold (e.g., restaurants, tourism), there is no use spending at all. If your revenues have fallen slightly, then use an opportunistic approach, either focusing on your most loyal customers, strongest sales channels, or your strongest regions.
Prioritize effort over dollars.
With the pressure to keep people while reducing spend, if you can maintain your presence through the effort of your people rather than media dollars, that would be a smart way. Now would be an ideal time for self-created content and social media sharing to keep your brand engaged.
Before you take action, here are simple guidelines to follow:
- If you have something you can do to help during the Coronavirus, then do it.
- If you have something you should say, then say it.
- If you can’t naturally say it or do it, then don’t force it.
A brand’s action speaks louder than words. Just do it. Try to help your customers.
Look at your budgets
Start by looking at your brand profit situation for 2020 and how you will deliver the year. It is not just short-term thinking, but the more you can maximize your 2020 profits, the more investment dollars you will have in the longer term.
One important consideration is to distinguish the working dollars from non-working dollars. I define working dollars as those investments that directly reach and influence the consumer. You can directly see the impact and measure the payback. The non-working dollars include any development, production costs or market research testing costs. While they are essential, you can find efficiencies by reducing or cutting your non-working dollars.
If you normally spend $1 million on TV production costs, and then spend $20 million in media, during this year, this would be an time to your production budget to $200,000. If you want to save on production completely, look in your vault for the best ad from the last five years and air that spot. Consumers are likely more willing to forgive production values. I noticed the recent Dove or Budweiser TV ads used still photography and worked great.
Media as a business investment to showcases your brand story through creative execution and get consumers to engage, listen, think, feel, and act in ways that pay back your brand. In terms of eyeballs are eyeballs, rather than completely cut spend, get your agency to play with the splits for daytime vs prime. Can you lower that $20 million down to $15 million without impacting your brand’s mental availability?
Now the $21 million spend becomes $15.2 million, and hopefully minimal short-term impact.
Here’s a link to our article for figuring out your media budget
3. Use your time wisely during the Coronavirus shutdown
With less activity on the brand, now would be a great time to conduct a deep-dive business review on your brand. Dig in on the five specific sections—marketplace, consumers, channels, competitors and the brand—to draw out conclusions to help set up your brand’s key issues, which you answer in the brand plan.
- Start by looking at the overall category performance to gain a macro view of all significant issues. Dig in on the factors impacting category growth, including economic indicators, consumer behavior, technology changes, shopper trends, and political regulations. Also look at what is happening in related categories, which could impact your category or replicate what you may see next.
- Analyze your consumer target to better understand the consumer’s underlying beliefs, buying habits, growth trends, and critical insights. Use the brand funnel analysis and leaky bucket analysis to uncover how they shop and how they make purchase decisions. Try to understand what they think when they buy or reject your brand at every stage of the consumer’s purchase journey. Uncover consumer perceptions through tracking data, the voice of the consumer, and market research.
- Assess the performance of all potential distribution channels and the performance of every major retail customer. Understand their strategies, and how well your brand is using their available tools and programs. Your brand must align with your retail customer strategies.
- Dissect your closest competitors by looking at their performance indicators, brand positioning, innovation pipeline, pricing strategies, distribution, and the consumer’s perceptions of these brands. To go even deeper, you can map out a strategic brand plan for significant competitors to predict what they might do next. Use that knowledge within your brand plan.
- Analyze your brand through the lens of consumers, customers, competitors, and employees. Use brand funnel data, market research, marketing program tracking results, pricing analysis, distribution gaps, and financial analysis. Focus on managing your brand’s health and wealth.
Summarize your analysis to set up the key issues to tackle in your brand plan:
What’s driving growth?
- The top factors of strength, positional power, or market inertia, which have a proven link to driving your brand’s growth. Your plan should continue to fuel these growth drivers.
What’s inhibiting growth?
- The most significant factors of weakness, unaddressed gaps, or market friction you can prove to be holding back your brand’s growth. Your plan should focus on reducing or reversing these inhibitors to growth.
Opportunities for growth
- Look at specific untapped areas in the market, which could fuel your brand’s future growth, based on unfulfilled consumer needs, new technologies on the horizon, potential regulation changes, new distribution channels, or the removal of trade barriers. Your plan should take advantage of these opportunities in the future.
Threats to future growth
- Changing circumstances, including consumer needs, new technologies, competitive activity, distribution changes, or potential barriers, which create potential risks to your brand’s growth. Build your plan to minimize the impact of these risks.
Read our story on how to manage your stress during the Coronavirus
Dove's tribute to our beautiful healthcare heroes who are on the frontlines saving lives during the Coronavirus pandemic
Budweiser's tribute ad
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