Many businesses, such as those linked to retail and tourism, are acutely familiar with the impacts of “slow season.” As such they’ve been forced to morph and develop strategies to help them grow even when things get rough.
Even so, the recent Coronavirus outbreak has blindsided everyone. The economy has been struck so hard that it feels as if we’re hitting the pause button with no clear outlook on how things will look in the future.
When things are uncertain, many businesses begin to cut what they think is non-essential. And in many cases, marketing is the first casualty of those cuts.
It’s understandable, but as much as you may feel tempted, please refrain from any rash decisions. Instead, embrace uncertainty and adapt to the change.
There are many actions businesses can start taking right now to recover after COVID-19. Those include engaging in push strategies, relying on existing customers, as well as automating business processes to cut some costs and save precious time.
We thought it might be helpful to cover a few factors that might impact your marketing budget during uncertain times and help you drive business growth.
1. Fear is your worst enemy
When the business environment rapidly changes, it’s startling. The urge to stop your marketing activity altogether may be strong. But this would be a grave mistake.
Historically speaking, companies that cut their marketing activities during the economic crisis have greatly risked long-term success. Constant and persistent investment in marketing activities is the only truly effective solution.
We’re not saying you shouldn’t be cautious. What you should do is:
– Focus on existing clients: Acquiring new customers is anywhere from 7 to 25 times cheaper than retaining existing ones (depending on the study you choose to believe). So instead of cutting your marketing budget during uncertain times, focus on the existing client base.
– Make your voice heard: Marketing through a recession can be a challenge. However, making a strategy where you have some activities every month that engages your audience can increase (or at least stabilize) your revenue during uncertain times.
– Be present: Continuing to run your marketing campaigns through the recession will communicate a stability that can survive even the most uncertain of times.
These are excellent ways to play it safe while still engaging in marketing activities that won’t result in a bad surprise.
2. The previous state of your finances matters more than ever
The state of your finances before the crisis will have a significant impact on your marketing budget. If your business was struggling even before the crisis began, surviving through it all will definitely put an additional strain on finances.
What you’ll have to do is to adapt your marketing strategy and corresponding budget to keep your business running while steering clear of bankruptcy. Some steps to consider include:
– Making detailed plans for a few possible scenarios: Having a few plans that could play out during uncertain times will help you avoid bankruptcy or any significant losses. Make sure you assume what challenges your customers are experiencing and how you would attend to them, and prepare a solution for every outlined scenario.
– Be aware of your customers: Uncertain times mean you’ll have to be observant and listen carefully to your customers and tune your offer with their needs.
– Create capacity that will address the customer’s needs and deliver on your promises: Uncertainty can raise anxiety levels. Keeping your promises will put you ahead of the competition so always practice what you preach.
3. The nature of your consumers and commitment to customers counts
The thing that can make a significant impact on your marketing budget is the behavior of your target audience.
According to some Rutgers research, consumers’ reactions during uncertain times are in direct relation to the level of stress they experience.
While faced with uncertainty, they can develop behaviors such as defensiveness and hoarding (both in spending and saving money).Other people might grow afraid to spend money on non-essential items.
To survive the economic downfall, companies will have to work on understanding their customer’s patterns and adjust their marketing strategies accordingly.
To secure your company’s profit, you should rethink the ways you’re segmenting your customers and implement the principle based on a customer’s emotional response toward the crisis at hand.
Some businesses may offer enormous discounts during this period in a hope they will be able to retain those customers at a full price after the crisis is over. However, discounts mean decreased profit that, in turn, impacts the marketing budget.
Here, the best strategy would be to work on improving customer satisfaction and retention. These uncertain times first and foremost call for the introduction of agility into the customer experience.
4. The nature of your product or service makes a major difference
With the beginning of the Coronavirus outbreak, we see a switch in consumer’s buying patterns. Wary of their finances, people are buying only essential things. And everything that is not in this category will likely see a drop in sales.
Additionally, over the past few months, many businesses are switching to remote work with clear signs they may remain remote even when the crisis is over. This situation can pose a severe threat to SaaS products that focus on managing in-house employees. On the other hand, some software solutions focused on managing remote employees will thrive.
If you have a product that will inevitably see a drop in sales during the uncertain times, this will have a great impact on your marketing budget.
To avoid budget losses, make sure you plan your marketing strategy carefully after the crisis is over while staying in the spotlight with some alternative and cheaper marketing strategies like offering referral programs and free trials or discounts.
5. Government mandates impact on your business
When a country faces uncertainty, the government might take emergency actions that could limit your business activity or temporarily put you out of business.
Inevitably, those actions will put a strain on your marketing budget and impact the way you will resume your business activities once things go back to normal.
Every set of rules can impose a great challenge, and to successfully bypass its limitations, you’ll have to take serious measures. Those include relying on your legal team, tracking competition, and readiness to go above and beyond.
6. How fast you can adapt will determine your fate
Another factor that can impact your marketing budget is the speed at which you adapt to change.
Staying competitive means being able to recognize the “right moment” and be at the right place at the right time. Like I already mentioned, most businesses fail because they’re not ready (or unwilling) to embrace change.
Uncertain times can pose a threat to business in that sense that it’s putting their ability to adapt to a test. For instance, businesses focusing their efforts in the “offline” marketing can plummet during uncertain times because they’re overseeing the online sphere.
To avoid losses, you, as a business owner, should size up all aspects of your business and try to look “outside of the box” to adapt to the needs of the current market.
Don’t forget to also track how your competition behaves, because mimicking their steps can set you off on the right path and give you insights on things you hadn’t thought about.
The bottom line
There are plenty of things that can impact your marketing budget during uncertain times. Some of them will be in direct relation to how you managed your business before the crisis. The very nature of your product or services and the reaction of your competitors also comes into play.
At the end of the day, you’ll probably have to reduce some costs that will impact your marketing budget.
However, the main greatest takeaway from any crisis is to just remain calm and avoid panicking. Human’s greatest ability is the ability to adapt to change. And lucky for us entrepreneurs, this can be applied to businesses as well.
Think before you act, and always stand ready to adapt – you can do it!
