These are fast-changing times—and frightening ones for many. For business owners, particularly emerging direct-to-consumer players that were counting on boom times to fuel early growth, the compulsion toward paralysis can feel intense.
But now is not the time to crawl into a hole and wait things out. As with every financial crisis, those that emerge strongly on the other side will be those that think strategically, plan for the long term and shift their budgets and activities accordingly.
In this unprecedented time in the world, following certain strategic and financial planning, best practices will help to protect and optimize your business. Let’s delve deeper.
Cut with a scalpel, not a chainsaw
No doubt, companies are feeling the pressure to pull back on marketing efforts right now. But rather than enact wholesale advertising freezes, companies should cut only unprofitable marketing campaigns or channels. In light of the coronavirus crisis, this requires a reassessment of performance compared to historical trends, so be sure to pull the latest metrics before making any firm decisions on what to turn off.
Continue to spend money on any marketing channels that perform above the break-even mark (meaning $0 or more in bottom-line contribution). New customers acquired at break-even will drive more demand and profit in the back half of the year, so it’s vital to bring then into your customer base now.
In economic downturns and financial crises, cash flow is more critical than ever—and you need topline demand to drive cash flow. Any cuts in your marketing will impact topline demand, and thus the bottom line. So again, be cautious in where you rein in spending. You need to continue to spend the money that makes you money to pull through a rough patch.
Adjust your messaging and tone
Messaging to customers in times of global crisis can be understandably challenging. Treating your customers with care and respect is first and foremost in a humanitarian crisis. More than ever, we need to be customer-first, and this means understanding what customers are going through right now. Now is the time to focus on building community and trust with your messaging.
Recognize what people need now. People are trying to work from home while keeping kids happy and busy. They are not getting dressed up for work, but they still want to feel attractive and put together while feeling comfortable. They are focused on their workspaces and homes. Brands should be aware of headlines and support critical messages that are gently pushing sales while communicating according to current needs and mindsets. Promote best-selling relevant products such as food delivery services, sheets and bedding, home services, children’s educational products and home office products and accessories.
Also, be transparent about inventory and shipping timelines if fulfillment centers are affected right now. Acknowledge that getting packages these days can be a bright spot in peoples’ days, so you might consider a complimentary upgrade to 2-day shipping if feasible (given that Amazon has slowed on fulfillment of non-essential products).
Look forward and focus on known peaks
Brands today should be marketing for fall and winter of 2020. Don’t neglect the downstream effect that your advertising efforts have on sales and customer-file growth. Cultivating more sales and more customers this spring, even if the return on ad spending is not as high as usual, will yield more sales in the back half of the year.
Also, brands shouldn’t back away from their peak months. You still have products to sell, after all, and Mother’s Day, Father’s Day and graduation season aren’t going anywhere. If anything, people are finding a need to connect more, not less, with the people they love—and to show they are thinking of them from afar. If you need to pull back, do so during off-peak months. You should trim marketing spending in your slowest sales months when you have fewer products to sell and lower numbers to hit.
Stay in touch and prepare for reopenings
Do not stop your marketing activities altogether, especially when it comes to your loyalists. Never walk away from communicating with your best customers and best prospects. These are the individuals who want to support your brand in times of crisis, and they’ll be the ones who drive recovery and growth for companies in the months ahead.
Build a plan to drive store traffic once the crisis is over. When things finally return to normal—or some version of it—there will be substantial pent-up demand and both customers and prospects will be eager to shop in stores they know are open and able to fill their needs. So, while it can be hard to plan with optimism in difficult and uncertain times, don’t forget that your customers are looking forward to moving on from this crisis just as much as you are. Be sure you’re there for them, both now and when the sun comes out at the end of these darker days.
Belardi Wong is a digital and direct marketing agency based in New York City.Favorite