Tried and tested best practice will make the best of whatever economic and political situation a business finds itself in - including the extraordinary circumstances we find ourselves facing due to the Covid-19 outbreak.
Every crisis is measured in phases. Initially it's assessment of the damage and taking decisive, immediate action to stabilise operations. Only then can you create some time and space to think constructively about the broader picture and what new opportunities might potentially present themselves - marketing plays a crucial role here. And finally you need to prepare for the day when the crisis is over, so that you are ready to act swiftly and boldly.
Shortcuts
- Looking after customers
- Core elements of good business: positioning, people and brand
- Price perception: offer consistent value
- What not to do in challenging times
- Conclusion: let go of fear
Looking after customers
The key thing to remember at the present time is that your customers are just as affected by the drastic changes as you are. If you put them at the heart of your strategy, your business will remain relevant and helpful to them. Ask yourself - how the uncertainty of the day impacts them, and then ask how you can adjust your offering to help them overcome these difficulties? If you love your customers they’ll be more likely to stay with you through troubled times.
Customer-first business - what does this love look like?
Customer-first thinking and practices increase customer satisfaction, they encourage repeat custom, they boost customer referrals and – in turn – they grow sales. They also reduce the churn factor, as less customers leave if more of their needs are being met.
Businesses only survive by showing value to their customers - giving them solutions to their problems, answering their questions, and meeting their needs. Knowing why your customers are your customers - what specific benefit your product or service has for them - is the key to delivering the value.
This is why you, as a business leader, need to be in tune with what your customers say they want, and what they really need. Too many businesses rely on assumptions and discussions around a boardroom table and they don’t realise that demographic details, typical spend and product interest are only scratching the surface of the possible insight they could have on their customers. What you really need to figure out is the why. Why do customers engage with your business, what do you do for them? What are their concerns, in and out of their business?
Look at your social media interactions and online reviews; do you encourage feedback at and after the point of service? Send out keep-in-touch communication and schedule calls. Build your customer interactions around touchpoints where you can ask the customer questions about how they are coping, and be sure to listen to the answers.
Three pillars of customer-first business
Customer-first business is built on three core principles:
1. Listen to the worries and concerns of your customers, through social media or other platforms.
2. Respond. There's no sense listening if you don't take action. Be as open about how you're going to help them - that nurtures trust.
3. Be Responsible. Prioritise ethics in your business practice and take control of your customer experience. Look out for your customers, and if things do go wrong, make sure that you apologise and make good.
Nothing happens in a vacuum. By understanding and addressing their concerns, and being direct, positive, respectful, honest and responsible, you’ll help your customers manage their concerns, helping to keep them - and your business - on even ground.
Core elements of good business: positioning, people and brand
When economic indicators point toward major recession, the key question for most boards and business leaders is “how will our business survive?” The answer: by focusing efforts on the three key elements of good business in any and every market: positioning, people and brand.
Positioning
Positioning in the marketplace is about standing out from the crowd; making a bold statement and setting yourself apart from your competition. Every marketing and business decision is built on positioning: a well-positioned offering will prosper no matter how low your competition goes on price.
Price is a core element in business strategy - and it is fundamental to effective positioning. Don’t under or over-value your product or service, or feel compelled to match what the competition are doing. For customers to have confidence in your offering, your pricing has to reflect its value, premium services command a premium price.
Regular contact with customers and a strong brand identity are also key. In volatile markets, consumers turn to brands that are familiar and comfortable. If you’re positioned as the familiar choice - strong and stable - you’ll be able to charge what you need to during the downturn, without losing them. The familiarity and stability will keep customers loyal, even if you’re forced to raise prices to maintain profit.
Furthermore, disruption also potentially provides you opportunities to redefine your position by adjusting your offerings and introducing new ones that are more relevant to the current circumstances.
People
Your people are the most important asset your business has. This means putting customers first, but it also means taking good care of your staff. Most companies claim this - but a crisis determines whether you actually mean it.
Just like everyone else, your employees will be anxious, worried or even angry about Covid-19 and the way it is effecting their lives. You must try your utmost to help them stay positive, and safe - because happy, confident and safe staff will deliver a better service, and pass those positive feelings on to the customer.
Brand
Brand is the third pillar of business survival and growth. A strong brand reaches beyond names and logos - it’s the cumulative effort of your business’ achievements and personality. Effective branding also makes running a business much simpler, everyone knows the message their actions, communication and interactions with customers must express. The clarity and confidence is vital in showing a united, coherent front in times of economic uncertainty.
Every action and interaction your business has builds brand equity. Positive brand equity brings profit, stability and customer loyalty. Negative brand equity brings loss, uncertainty, and the constant struggle to be seen as a good business. By maintaining control of your brand equity and ensuring that everything your business does is consistently on-message, you’ll stay true to yourselves, remain credible and attractive to customers.
Price perception: offer consistent value
Economic uncertainty means price increases on everything from fish fingers to sportscars. But at the same time slumps in demand result in panic promotions and firesales in a "dash for cash". Meanwhile, currency values can go down, bounce back, and stagger unpredictably on through prolonged instability. Goods and services cost more; money is 'worth' less, or at least has less consistent worth.
When you can’t rely on the value of money, a focus on pricing is crucial. Your business should always price optimally to maximise sales and profit margins, no matter what the external factors are, but doubly so in uncertain times.
How is marketing involved in pricing decisions?
It’s easy to forget that marketing can play an enormous role in determining the price of a product or service. Finance are responsible for ensuring margins, sales have insight into customers’ willingness to pay and a sense of value, but marketing brings critical knowledge of the market the product needs to thrive in.
Marketing defines and structures your pricing strategy - the price band that works best for your product and brand. Market research identifies and analyses the prices charged by competitors, giving you a sense of the viable price points that exist and can be challenged. Knowing your market inside-out is vital to ensure your prices hit the sweet spot between profit and viability.
How do your customers relate to your prices?
When you’re setting a price for your product, put yourself in the customer’s shoes. What decisions do they have to make before buying? Is your offering a standard purchase or a big investment for them? Small, regular purchases are relatively painless; large, irregular ones come with a weight of responsibility and a fear of making a bad decision.
What to do if you have to increase prices
The size and scale of your consumers’ purchasing decisions won't change if your cost of sale increases – only the factors involved in decision-making are affected, as money will likely be tighter for your them too. The key is to manage these factors well, explain your situation to your customers clearly and honestly. Your customers will understand that markets are changing, costs are increasing and prices must rise with them - provided you reiterate that they’re getting value for their money.
It can help to change the way you display your prices to do this. Offering set prices for products and services makes quick decisions easier, but uncertain customers don’t make these quick 'snap' decisions.
By displaying a wide range of prices and explaining the services clearly, you can encourage customers into feeling more secure and then they’re more likely to buy.
That sense of security is imperative. It’s difficult to future-proof when nobody knows what the future holds, and business leaders can’t afford to wait and see. The goal is to focus on what’s in your hands - the value you can offer your customers and how you can reassure them by explaining that value is still there.
What not to do in challenging times
“Wait and see” is not a viable strategy right now - quick and decisive action is needed.
We’ve looked at three things you can do to get your business ready for the stress caused by the Coronavirus outbreak, in all its forms- now it’s time to look at what not to do.
1. Accept the adverse
News reports, economists, politicians and analysts on social media represent a rising tide of negativity. But a negative mindset won't help you or your business. Now is the time to be reassuring in your market - talk to your customers, find out their concerns, and tell them what you’re doing to help them.
2. Take unnecessary risks
Rushing into major decisions can have long-term repercussions. It’s vital that you don't gamble on getting ahead of the competition. Test your marketing campaigns/efforts before you spend too much on them; conduct user tests for new products. Don’t spend big money until you are sure about what you’re doing. But, at the same time, doing nothing is the riskiest strategy of all.
3. Play your marketing by ear
You may be tempted to spread the net wide, in the hope of catching as many customers as possible. Don’t do it. It won’t win you customers; it will cost you big money and undermine your brand. Good marketing needs a focused, targeted, purpose-driven strategy.
4. Abandon your budget
Don’t panic. Don’t throw money out now in a panic to secure business while you still can. Stick to your guns. Start with your business goals and work backwards to figure out how to reach them. Formalise your budget for specific marketing activities within a set timeframe, and measure them against pre-defined metrics. Don’t waste money on marketing that isn’t goal-oriented.
5. Forget about ROI
Marketing is an investment, not a cost. It must pay for itself at some point, even if that point may be further down the road than you would ordinarily expect. Without looking into how your marketing is impacting your bottom line, you may as well be crossing your fingers and praying for the best. Build yourself a marketing dashboard that reports on the critical metrics - marketing as a percentage of sales, cost per customer acquired, and don't forget the metrics that show your progress toward your current marketing goals. Fortunately, many of your competitors will slash their budgets so there are likely to be some opportunities (in media spend or PPC) to secure great deals and significantly decrease your customer acquisition costs"
If the last few years have taught us anything, it’s that you need a clear strategy, detailed budget and sharp set of goals before taking any drastic action. Acting without any plans will force you to rely on information you can’t trust, be making promises you can’t keep, struggling to deliver a compromise that will keep your business afloat.
Conclusion: let go of fear
Economic landscapes are constantly shifting, shaped by human decisions, and these decisions often aren’t rational - toilet-paper, anyone? They’re made in the moment, under the pressure of financial constraints, informed by gut feelings and current fads. They are made, quite often, in a climate of fear.
If you’re afraid of failure, your business will suffer. It seems contradictory, but fearlessness - conviction in what your business stands for, the value you offer your customers, and the loyalty you foster in customers and employees alike - will carry you through this time. As a business leader, you can focus on the positive achievements, not unfavourable consequences. While the rest of your industry is worried about decline and fall, you need the courage to see your potential.
Your costs may increase, but a sensible pricing strategy will help retain customers. Customer confidence and spending may decrease, but communicating clearly and honestly will remind them why they should stick with you. No matter what the economic situation may be, the fundamentals of good business remain the same - and right now, they’re more important than ever.
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