15 Apr Marketing and Sales Management in the Midst of a Global Crisis
This article is a product of a webinar given by Gali Soudak, founder and CEO of Daze, at Israeli Export Institute’s International Manufacturing and Marketing college. To view the webinar, click here. For information about our upcoming events, register here.
In times of crisis, most of us have a tendency to look around, observe how others handle the situation and respond quickly in a similar manner. An impulse that usually proves to be leading us down the wrong path. If we pause and take a look back at what history tells us about how companies conducted themselves during times of crisis, we might choose a different strategy. When everyone around you is led by fear, let data inform your decisions.
Our new normal is different in many ways from the one we knew only a month ago and certainly different than the one we knew 3 months ago. We deal with considerable amounts of uncertainty, learning to adapt to the current challenging conditions. Certainty is a fundamental human need, whereas uncertainty induces extensive panic all over the map.
Almost all of us have concerns about the well-being of our seniors, parents, and friends in high-risk groups. Many have lost their jobs, steeply increasing unemployment rates and we fear economic paralysis that will down spiral into a deeper crisis. It is important to constantly remind ourselves that business and corporate executives are human. Health and financial concerns also affect industry leaders, CEOs, and executives. Their minds are also constantly occupied with personal concerns, as well as with how to fortify the business to successfully push through.
The current crisis is particularly interesting and different from other recessions the world has experienced. In a matter of days, the world almost completely transferred into the digital realm. This process, although predicted to happen at some point in the future, has taken companies by surprise and found them unprepared. In an instant, entire businesses shifted gears, turning operations completely digital. It’s unlike any other situation where an employee takes sick leave and works from home, nor is it like Joining an overseas meeting through Zoom, no – now EVERYONE is working remotely. There were no pre-arranged work processes, no time to think the procedures through. Cooperations and collaborations have to be improvised now. Let’s not forget that work conditions at home include partners and children in need of daily structure. This is the period we’re living through.
How can we manage it?
Charles Darwin, the father of the theory of evolution, argued that it’s not the strongest of species that survives, nor the most intelligent, not even the one who applies themselves or cares the most. The species that survive naturally are those who prove to be the most adaptable to change. This is especially valid when our world is in turmoil – some companies will shut down, some will go bankrupt and will take years to recover; on the other hand, some companies will grow as a result of this crisis, some will leverage the tremendous opportunity here and now. If we choose to act according to Darwin’s theory and adapt best, we ought to understand how surviving has nothing to do with accepting defeat. To best adapt to the current situation, is to actually pause, come to terms with the changing environment and devise a plan anchored in facts.
Get the Facts – Learn from History
- How should advertising budgets be utilized?
- Is it worth stopping everything for the sake of saving money?
- Why advertise if nobody actually purchases?
- Which digital channels are effective during this time?
- How should you change your messaging?
All important questions.
Throughout history, we’ve witnessed many economic crises. In fact, every 7-10 years, the market experiences a recession. What does history teach us?
During the last crisis, in 2008, marketing and sales budgets were cut at the speed of light. In fact, 50% of companies completely withdrew marketing activity, another 25% of companies significantly decreased marketing and advertising budgets and only 20-25% of companies increased their advertising investment. These different behaviors allow us to get a good look at various decisions and discover what strategies did well.
We took different researches about marketing decisions made in times of economic crises, throughout different time periods between 1920 up to the present, across dozens of industries in many countries around the world. All researches have been conducted by professional authorities and published in professional journals, breaking down the different parameters that all, surprisingly and unexpectedly – came up with similar conclusions.
Vaile (1926) – Impact of Advertising During a Recession on Sales
Vaile’s first study, in 1926, researched the impact of advertising on sales during the 1921 recession among 250 companies. The pre-recession sales level at each company was set to be 100%, where the impact of changes in the advertising budgets over time was examined. Initially, there was a 10% sales growth among the companies that had increased their budgets, compared to a 5% decrease in sales at companies who had eliminated their advertising. Over time, however, a more widespread trend has emerged – the gap between those in recession who had lowered advertising budgets and those who had increased theirs over the years, grew apart by 24% over the researched years. The companies that invested in advertising during the crisis experienced substantial growth, compared to companies that had cut back.
Meldrum and Fewsmith, Inc. (1979)
This study was conducted in 1979, examining the influence of the 1974-1975 recession’s advertising strategies on post-recession growth. Expanding advertising efforts during a recession increases revenue as well as profitability, which in this case, has not been significantly proven in service-based companies, but has been validated with respect to other types of firms. It was evident that gaps were small during the recession; even close to non-existent. However, once the recession had passed – firms of larger invested strategies continued to bear fruit, leaving the others behind and by this, widened the gap.
Biel and King (1990), Kijewski (1982)
These 2 studies had examined the effects of changes to marketing and advertising budgets during the 1980-81 crisis; this time, not focusing on sales but on the firm’s determined market share. By closely examining dozens of companies and analyzing their marketing strategies, it has been shown easier to take over new market shares and reach out to desired target audiences precisely during a recession. Firms that didn’t cut marketing expenditures at recession periods benefit from doing so, experience stability over time, and every action’s ROI tends to yield greater results.
A 2002 study, examining the 1990-1991 recession and included 800 companies; some which chose to increase, decrease, or maintain advertising investments during a time of recession. The findings of large differences over time were evident here as well, comparing companies that had held back on advertising versus those who had invested more or at least maintained an existing budget during a crisis.
Frankenberger and Graham (2003)
Last, but not least, an in-depth study from the year 2003, studied 2,660 firms, dating back from the year 2000, down to 1971 and found unequivocal results, yet again! Higher advertising investments at times of crisis influence a steady, clear, and long-lasting impact on profits in post-crisis years. This outcome has been proven time and time again across numerous industries and is valid for both products selling companies, as well as business-to-business companies (B2B).
Identify the Opportunity Accurately
Obviously, we’re touching here on a non-intuitive behavior, while witnessing everyone around us approaching the situation is a completely different manner, urging us to cut back or withdraw, just to get through this period. But the non-intuitive behavior best fitting our current state and proved beyond doubt to yield the best results over time – is in fact, to increase advertising budgets (or at least daring to maintain the existing budget). This is because at times of crises the opportunities that may arise for those who are willing to take them with open arms may just be tremendous.
What Big Opportunities are we Talking About?
- Advertising prices have dropped: While many companies are cutting back budgets, media prices have significantly dropped.
- Standing out is much easier now: The “noise” levels advertising produces are currently toned down, opening an opportunity to easily stand out.
- We’re living in times of a virtual realm: In this current state, people are consuming virtual content more than ever before! At home, with the kids, every person utilizes some sort of electronic device (at least one, most of us with over-than-one screen). All digital channels and the household consumption drive in enormous amounts of traffic and audience.
All of these together create an opportunity for those who are open and ready to learn from the past and willing to adapt and conduct wisely to present reality. Marketing Executives of these times carry a big responsibility on their shoulders – fighting not to give in to the instinct, urging to reduce and close, resisting reckless actions, and taking responsibility for traffic that will generate a very needed positive future for their company.
Build Marketing Plans in a Time of Crisis
In the coming months, companies and businesses will become highly dependent on their digital strategy. It is their main communication source, whether with customers, prospects, employees, or suppliers. It is important to build a plan with short, medium, and long-term goals, while thinking of any audience to aim to reach. Each goal should have its own tailored messages and each audience should be reached through their specific channels.
What Should the Message be?
Of course, all marketing messages should adapt in respect of this time and its special state. This does not mean that every ad has to touch on the subjects of Coronavirus, epidemics or unemployment, however, it does mean that we should keep in mind to always take our audience’s new reality into account.
Don’t try to sell now. This is important to say. There’s something very intuitive here too; thinking that if we invest money on marketing, then something should be marketed. Usually, this is a misconception and is especially so during a crisis. The correct approach is to always see the world from your customers’ perspective and think about what it is that they are going through; what do they need? Reciprocate back. In times of crisis, more than ever, adding value to their lives is essential, and it’s better to avoid burdening them with attempting to persuade them into a purchase.
It’s important to keep in mind first – this is a crisis. A crisis, of people, who have already started fighting for their health, while also battling emotionally and financially. It is very important to approach them with empathy and put away the pushy sales messages – it simply won’t work. It’s true and easy to say, we’re not prepared with messages for epidemic times. However, those who keep on their toes and adapt well and quick, are the ones to survive. Any company can tailor its messages. Ask yourselves – who are my clients? What do they fear right now? What concerns occupy them? What resources are available at reach to them? How can we help them? In what ways can we support?
These days, the role of marketing is to harness our business resources for the sake of supporting our community of customers. As a matter of fact, this is something that comes naturally to us all, but as business people, we seem to repress this natural sense, grasping it as uneconomical. Do not suppress the desire to do good, for it is an authentic representation of ourselves and this sincere feeling will reflect on to your marketing messages. These are the truths that remain in the memories of those you were there for them during times of struggle. Even if we lower today’s profit margins, we have become accustomed to, cut down the prices to benefit those who cannot meet them now, provide free support, offer our experience or organization at our disposal. It’s simply the right thing to do.
What Shouldn’t you do?
- Do not leverage fear.
- Do not talk about the product.
- Do not glorify yourself.
Think about your customers’ needs and how you can be there for them at this time.
The right marketing channels
In order to identify what the right channels are, you will want to analyze and correctly perceive your target audience, where they are and what messages you will want to try and convey. The key is to sort out the messages according to short-term, medium and long-term, considering how our state of feelings and our needs might change as this crisis progresses.
In the short term, it is recommended to quickly update your website, to have it adapt to the current period. Acknowledge the change in needs and clearly communicate through how you can support your customers at this time. Invest the time you have that has opened up to map your existing content and add valuable and in-depth content that addresses your target audiences’ needs.
This is the most important advice from me to you at this time – take the time to produce high quality content and distribute it (also) by Paid all across relevant channels, according to audience segmentations. It is worthwhile now to take advantage of the low advertising prices and distribute sponsored content across the different platforms. Due to the drop in demand for advertising, today’s prices are significantly cheaper across all digital channels. This is despite the fact that digital consumption has actually increased by dozens, having everyone today, all ages that may be, increase their screen time. The gap between the affordable prices and the many eyes casted on digital today is of the most profitable ever, it’s time for the flourishing of great campaigns.
Like the paid channels, it is important of course, to organically distribute the messages and content across appropriate channels: Facebook, LinkedIn, Twitter, Instagram, YouTube and Pinterest, all according to the audience at the focal point. Remember to use all assets wisely, including through the personal pages of the company’s key figures. They, too, can put out industry related reassuring messages, resonating with the campaign messages.
When it comes to medium and long-term, it is important to produce a growth plan for the post-crisis period. The current recession will end, but its implications will continue to influence ways of thinking and market practices over time. Many of the companies had already begun a process of thinking how to shift towards manageably working remotely. While most procedures and processes were yet to be prepared, they were in-depth processes, led by the large corporations and now accelerated rapidly. Therefore, even for the long term, you will want to invest in digital strategies.
The uttermost long-term investment in digital is the investment put into connections, relationships, content and SEO.
SEO – Website Search Engine Optimization is a deep and long-term process, building your site to correlate and properly communicate with Google’s process, as well as other engines for that matter. This process does not show quick results, but rather an investment, months down the line and even years, enabling you to slowly climb your way to the top of the search results. Now that many organizations have been cutting their marketing budgets, this is the time to invest in digital assets and build them to rank high when the market overcomes the recession.
Inbound marketing – Content marketing. High quality, in-depth writing is an asset that takes time to produce. Our daily, ongoing tasks tend to get in the way; however, we gain credibility, develop our professional branding, and attract our ideal audience by providing good assets. This is the right time to formulate a GANTT for in-depth writing and producing high-quality content, case studies, analysis, infographics, and videos for the newsletters and email sequences you will want to send out in the future. High quality, in-depth content that provides real and meaningful value to your readers.
Those companies which managed to grow during a crisis did so by adapting the short-term content and building high-quality content, preparing them for the medium and long-term. With the right assets, you can ask for your desired audiences’ contact information and maintain a continuum of marketing through to them, by providing high-quality content and establishing yourself as a thought leader in your field of expertise.
Video – The most consumed content on the Internet today is video, and during the period we’re experiencing, video consumption has greatly increased. Short publicity videos, longer storytelling, webinars – a combination of all of these will craft rich and significant channels for you. Users love consuming this type of content, as long as it’s appealing and interesting.
Support – Invest in content that supports your customers and strengthens their relationship with your sales reps. Whether your sales agents have up to now, worked by going to meetings, flying out to meet with distributors; the entire world has now become virtual and meeting operations will now have to be re-crafted and re-studied. Now’s the time to step up in designing presentations and building sales presentations.
In addition to the content and design, sales reps should undergo virtual-sales training – on how to deliver a presentation that will come through as well and as-close-to a personal meeting as possible? Look up the tools that can make your presentations feel closest to life.
Right now – the Companies that are Doing it Right
The COVID19 crisis is at its peak, we don’t know when the restrictions will come to an end and how things will unfold following so, but it is already evident that some companies are increasing their budgets and using their marketing channels to deliver tailored messages. For example, Mobileye has campaigned through television, digital, and radio, coming out with a tailored message saying “Mobileye for the Community”. Mobileye didn’t just increase advertising investments, but the brand aligned its message with: “A voice calls out to help organizations and nonprofit associations in need of a monetary grant, for the purpose of continuing their operations in support of the Israeli economy, strengthening and maintaining the resilience of the Israeli public.”
Slack has tailored its messages to the purpose of working remotely / from home: “Thinking about how to make it work with your team working remotely right now? So are we.” Similarly, many Project Management and Task Management software companies have quickly embarked on webinars touching upon the subject of remote work and the possible adaptations to the new circumstances. This is a way of meeting their clients’ pain points, bringing to the table value and help among their area of expertise.
Many different brands adapted their advertising messages to a state of voluntary distancing and social distancing, such as “Kif-Kef” (“kif”, meaning “high five” in Hebrew and “kef” is “fun”), so their message said that we can leave the “kif” out of the picture for now being; Hershey’s are marketing their Kisses as the kinds that are still allowed to be given at a time like this; An Argentinian eCommerce company made a change to what was a hand-shake logo, to the logo of an elbow-meeting-elbow; A digital firm called “Humble” came out with this message: “This is something we don’t want to go viral”, along with the hashtag #CORONAVIRUS; And the chain KFC that immediately removed their brand new advertisement displaying customers licking their fingers because the grandiose production came out exactly when awareness arose of the importance of avoiding any direct hand-to-face contact. It’s impossible and unrealistic to detach from the real world.
So What Should We Do in the Present, to Grow in the Future?
- Resist intuitions and instead, work according to what research and history has taught us – increase budgets.
- Choose the channels where people tend to spend most of their time – digital utilization.
- Message adaptation – it’s not the time to self-proclaim, nor is it time to sell. This is the time to contribute and help in any way you can and embrace the customers’ perspective. Provide as much value as you possibly can.
- Invest in content and SEO for the long-term.
About the Author
Gali Soudak, MBA and Marketing graduate of the University of Melbourne Business School, Australia. The past 15 years, having the focus on marketing and business strategy. Founder and CEO of Daze Marketing, a digital agency that provides services to global B2B companies for the last 10 years.
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