Over the last few weeks, we heard executives make statements such as “We are on hold and taking it day by day. Nothing is typical anymore,” and “At this point, the future is unknowable and we don’t yet know how the U.S. government is going to respond.”
These quotes may sound like calls from just last week, but these are actually quotes following the 2007 financial crisis and are strikingly similar to the conversations most businesses are having today.
Marketers have been in this position before. We can learn from other crises to find the next practical steps for your business. Understanding case studies during tumultuous times allows us to bounce back when the pandemic is over.
Some of the best companies have risen to the top of the market during national crises. Here are a few ways companies succeed under difficult circumstances.
- Watch Your Data for Changes in Customer Behavior
Consumers will change their behavior during an emergency. Usually, they will reduce their spending and shift their priorities. A 2009 Harvard Business Review study identified four psychological segments based on consumers’ emotional reactions to a negative climate, four categories of expenditure, and mapped how each new segment managed future purchases in each category of expenditure:
Your best defense is in your own customer data. Constantly look to collect new data on your customers and analyze it thoroughly to better position your business.
- Use Your Data to Adjust Your Marketing Budget
Cutting an advertising budget weakens your brand. Many competitors will cut back on their ad spend which can benefit your company during a time where advertising is more affordable. This is a great time to increase your share of voice, which can increase your share of the market. Use data to help you determine the best channel and consumers you should be targeting during this time.
A great example of this happened during The Great Depression. In the late 1920s, Kellogg and Post led the packaged cereal market. When the Depression hit, Post reduced their marketing budget, while their competitor Kellogg’s doubled its advertising spend and moved aggressively into radio. Kellogg’s profits grew almost 30% and the company became and remains the industry’s dominant player.
- Redirect Marketing Investments to Highest ROI and Growth Areas
Analyze where you are investing your marketing budget and see what the ROI has achieved in each area. Move funds to the highest earning areas and areas that have the highest propensity for growth. Amazon grew sales 28% during the Great Recession because they continued to introduce new products, including the Kindle. Amazon became a leader in innovation by introducing a lower cost alternative, and by the end of the year, customers were buying more ebooks than print.
- Serve the Local Community
Customers are examining businesses closely and are demanding businesses serve their community’s best interests. In response to the Boston Marathon bombings in 2013, local businesses responded by housing stranded runners and working together to help identify the suspects. Leveraging your company’s offerings and identifying ways to help your local community helps gain trust during these difficult times.
Marketers who are successful during these times are the ones who stay nimble, focus on consumers’ needs and values in the moment. By leveraging data, brands will be strongly positioned for the better days ahead.