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There’s no question that COVID-19 / coronavirus is rocking the economies of the world.
There’s no playbook on how to feel. There’s no playbook on what actions your business should take.
We’re in uncharted territory.
A challenge like this has never occured in the modern business world.
Consumer Behaviour Has Rapidly Become Unpredictable
As people came to grips over the last few weeks of how monumental and temporarily life changing COVID-19 will be, the collective behaviours shifted.
Consumption of news has shot through the roof. People have been stocking their pantries and buying wild amounts of toilet paper. They’re worried about when stores are closing, how to get food delivered. People are distracted. This is temporary. Breathe in, breathe out.
The last few weeks of consumer behavior are not indicative of the future. At some point, the spread of Covid-19 news will normalize. People’s routines will normalize.
When this happens, we won’t only see a resurgence in demand, but also an influx of deferred demand. It’s important to consider where you’ll be positioned in the market when this happens. It could make or break your business over the next several years.
Making smart marketing choices now is more important than ever.
Demand Isn’t disappearing – It’s Deferring
Is there probably going to be a global recession this year? Yes.
Is demand for your product/service going to be zero? Probably not. It might be less than it has been in previous years, but once consumers adjust to their “new normal”, there’s going to be a surge of “deferred demand”.
For some industries, demand is going to explode. For others, it will be about capturing what you can.
What’s deferred demand?
Deferred demand is the concept that demand still exists in the market, but currently people are choosing to either use up their stockpiles or go without due to extraneous triggers.
Once the pressure of the triggers lessen, consumers will not only go back to their previous buying habits, but potentially even purchase more than normal to build up their stockpiles again, or get the enjoyment of the thing they’ve missed so much.
If you take your “foot off the gas” (as it pertains to marketing) entirely during the deferral period, your business likely won’t be set up to take advantage of the deferred demand period. It’s difficult to predict precisely when that will occur. You have to be ready at any moment or risk being late to the game.
What does this mean for your business? If you’re not set up to take advantage of the deferral, be prepared to kiss all that lost demand good-bye. It will hurt the long-term prospects of your company and make recovery that much more difficult after this initial adjustment period is over.
I’ve worked with dozens of companies through two recessions now. The Great Recession after the financial crisis, and oil price recession in Alberta.
I’ve seen companies handle uncertainty in a lot of different ways and here are my observations:
- The companies who cut back the majority of their marketing take longer to recover (if they recover)
- The companies that invest in long-term marketing assets like SEO and their customer database saw faster recovery.
- The companies that doubled-down on their marketing efforts were able to leap frog their competition who cut back and emerge as a new market leader.
Big plays are going to be made over the next year. Businesses have a choice on whether they want to watch from the sidelines or get a piece of the action.
I get it. There are tough choices to be made. You might be choosing between your marketing budget and a staff member. Your staff are like family.
But it’s time for tough talk: you’re not doing anyone any favours (even your staff) if you don’t position your business for recovery. The better you’re positioned for recovery, the sooner you can hire them back with viable long-term employment.
What are businesses doing next?
As the economy temporarily halts, businesses are right to assess their expenditures and make smart financial choices.
If you do need to make choices with your digital marketing, this is the order I would assess from first to last if you have to make cuts.
[Please take the below list with a sweeping grain of salt. My recommendations are highly generalized. The choices here are going to be different for every industry and the different degrees in which they’re directly (or indirectly) impacted by COVID-19. If you’d like a consultation, please contact us to discuss.]
- Display Ads & Paid Social: if your ads are positioned around direct response or getting a consumer to do something right now, you’ll want to give this a hard look.
- Paid Search: for the same reason as #1. Depending on your niche, consumers may not be taking action right now.
- Social Media: while I don’t recommend cutting entirely, you may want to temporarily cut down your frequency depending on your business situation. Double check that your posts aren’t tone-deaf to the current situation.
- Content Marketing: a slow period is a good opportunity to reassess your content marketing strategy. Make sure your messaging isn’t tone-deaf at this time.
- Email: your email database is always going to be one of the most valuable assets you have. Depending on your niche you may want to increase or decrease frequency right now.
- SEO: SEO has, and always will be, a long term strategy. With it you’re always looking on the 3-12 month horizon, so don’t stress about what’s happening this month. Your SEO will be the #1 thing that will help you when deferred demand starts to grow. Knee-jerk reactions to cut SEO in the short term push out your lead time and may impede your ability to recover. Take advantage of market opportunities and competitors that might scale back their efforts here over the next few months and use it as an opportunity to leap-frog them.
An example: if you run a bar or restaurant that’s now closed, you’ll obviously want to stop paid ads that encourage direct visitors. On the other hand, if you’ve pivoted in to offering take out or other services through your website, you’ll want to adapt your ad strategy to advertise that instead. If you’re closed, you’ll want to save that budget. Use the time and budget to think about your re-launch ramp-up strategy.
New Digital Marketing Opportunities
Before you even consider slashing or adjusting your digital marketing budgets, you should know that the current crisis also provides very unique digital marketing opportunities. Depending on your unique situation, there might be ways to get a better bang for your buck if you reallocate some of your digital marketing budget. If you can afford to maintain your digital marketing budget, double down now.
With many businesses struggling or cutting their digital marketing budgets, there’s less competition and therefore opportunities for quicker results at a lower cost. At the same time, new challenges mean that consumers are looking for new (or new to them) solutions, for example, how do I arrange a virtual birthday party for my friend? What are some crafts I can do with my kids at home? How do I make a sourdough starter?
- Lower Cost for Digital Ads: Case in point, we’re starting to see some evidence that as digital marketers pull back budgets, CPMs and CPCs are going DOWN on platforms like Google Ads and Facebook. If your industry remains open, now would be a great time to see how far you can push your ROAS (return on ad spend).
- New Target Audiences: The crisis means a huge shift in behaviour and potentially changing consumer motivation. It might be a great time to revisit who your target audience is. Have new audiences popped up as a result of the crisis? Are your existing target audiences still driven by the same motivators? A poignant example would be home tutoring services – there are probably a few additional groups of consumers that can be added to your list of target audiences after schools closed and many parents were thrust into the role of home educators.
- Email Campaigns. This is a cheap and effective way to remind customers how they can access your products. To cut through the noise, your campaign should be clearly linked to providing value for your customers and tie into your digital buying options.
With many of your employees at home and not tied up with other obligations, it could also be a great time to develop some valuable pieces of content or make updates to existing content that you’ve been thinking about for years. Maybe your website content needs to be updated? Maybe you can write a series of blog posts that you can use now or later? There are many ways to focus on content marketing these days.
Remember to re-assess all of your marketing efforts regularly, including your marketing copy and collateral. You’ll need to do a COVID-19 sanity check. This won’t be a one-time exercise, but a constant process of reassessing whether your digital marketing strategy and collateral make sense in a rapidly changing situation.
COVID-19 Digital Marketing Communication
For businesses, it’s a matter of mastering the fine balance between “business as usual” communication and leaning too heavily on the current crisis. If a business tries to carry on with their communication and ad campaign collateral unchanged, they run the risk of coming across as tone-deaf and alienating their customer base because they’ll appear like they don’t understand how much the pandemic has affected them. On the other hand, businesses will not want to look like they’re trying to exploit the crisis either.
From the actual copy to images and discount codes, think about how the message holds up after COVID-19. Perhaps an image with people hugging or shaking hands doesn’t make any sense right now. Discount codes with #covid19 will be perceived as tacky and exploitative. The key to the balance is empathy and understanding of what your audience needs and wants right now.
Finally, it’s crucial that you demonstrate your commitment to keeping your employees and customers safe. What are the safety and sanitation measures that your business has implemented? Show that you’re a responsible business that’s worth supporting and inspire confidence that customers can safely continue to use your services.
The mantra should be: stay safe, be empathic, and think about what value your business can offer. That way, you’ll be able to keep your marketing on-point and not offend your clientele.
Now the interesting part: how will demand shift as consumers settle into a “new-normal” of life involving social-distancing and isolation?
As more people stay home, I predict:
- Information consumption will skyrocket. Blogs, articles, videos, will be consumed at impression levels never seen before.
- How-to content will win. From home renos, to cooking, everyone will be spending more time learning to become self sufficient.
- Ecommerce will explode. More than before. Rather than ecommerce being a bolt on to an existing business model, more organizations will undergo a transformational shift to be e-commerce first. Delivery and logistics will play a key part in this.
The thing about the current crisis is that these effects won’t just be short-term. New habits that are formed while staying at home will die hard. In many ways, physical distancing will open people’s eyes to the benefits of ecommerce. For example, ordering groceries online is a practical and convenient alternative to spending time in the grocery store and the demand for online shopping across all sectors will probably persist long after COVID-19 is just a distant memory. That’s why it’s so important to set your business up for success in the ecommerce realm.
My Advice for Different Industries and Business Types
[Disclaimer: my advice, recommendations, and predictions are not right for every business. Please discuss with a trusted digital marketing partner.]
Affiliates & Bloggers
These last couple weeks have probably sucked. Impressions have dropped. And worse, if you rely heavily on Amazon, as they’ve shifted to focusing on essentials, your commissions might be down substantially.
My advice to affiliates and bloggers in the midst of Covid-19 is to stay the course with a few adjustments. Within a few weeks people’s lives will return to a new-state-of-normal. Traditional search behaviour will resume with booms in key niches. How-to and self-sufficiency content will likely explode with traffic.
Take the current week to assess your affiliate programs. Diversify where you can, look for alternatives to Amazon with a solid supply chain. Double down on your SEO efforts to solidify your market positioning. If you’re in the right niches, there is a tsunami of traffic headed your way.
If you can’t find a suitable affiliate program alternative – shift your temporary focus to acquisition. Be ready to capture that email list and those social followers. Once your affiliate programs come back (and they will), you’ll have a larger subscriber base to leverage.
Depending on what type of service business you have, you’re likely facing different challenges. Here’s my best attempt at breaking it down.
Customers will be nervous about visiting you. I’d recommend the following:
- Investigate where you can offer phone or video consultations.
- Patients WILL be concerned about visiting your location. Describe in-depth your COVID-19 policies (how you clean, how often, how you’re protecting your staff and patients, what your sick policies are, etc) and over-communicate this to your clientele. Post it on your door, in your waiting room, on your website, on your confirmation emails, on your phone system – EVERYWHERE. The more you can make this clear, the more your clientele will feel you are taking this seriously and it will inspire confidence.
Depending on your service line, you will likely see a decrease in customers while people are practicing social isolation and distancing. Focus on retaining existing customers, consider lowering paid media spend, and invest in SEO to better poise your practice for recovery.
If you’re able to offer phone/video consultations, a short-term PPC strategy could be highly effective.
The businesses you work with are likely distracted. Unless you offer business pandemic planning consulting as a primary business line, it’s likely you’ve seen your leads drop over the past few weeks.
Businesses are grappling with moving their teams to 100% remote and trying to forecast the economic impacts.
I would anticipate seeing this sector contract for the next 1-3 months as businesses work on stabilizing. After this, depending on your offering and what industries you work with, growth will start coming back.
Pull back on paid media spend temporarily. Work on your marketing assets and content strategy. Position yourself with SEO to take advantage of the growth 3-12 months down the line.
If you offer any non-essential services that depend on your customers coming to you (think: entertainment centres, bars, restaurants, etc), you’ve likely had an enormous business shock over the last few weeks.
For some businesses, the best you can hope for is weathering the temporary shut down.
If you can afford it, I’d recommend keeping your SEO going to ensure you’re well positioned come recovery time. There’s likely to be some BIG movements in your SERPs depending on who is able to continue to invest in SEO and who isn’t.
If you have a restaurant or cafe and have pivoted to take-out/delivery, kudos to you on your adaptation! It will make sense more than ever to continue your social, PPC, and SEO strategies to stay top of mind.
Grocery stores, Pharmacies, Liquor Stores:
Your services are essential and it’s likely that there will be increased spending in these areas. But as with medical services, people will be concerned about visiting your physical location:
- Set yourself up to take online orders and delivery and/or curbside pickup.
- Customers WILL be concerned about visiting your location. Describe in-depth your COVID-19 policies (how you clean, how often, how you’re protecting your staff and patients, what your sick policies are, etc) and over-communicate this to your clientele. Post it on your door, in your waiting room, on your website, on your confirmation emails, on your phone system – EVERYWHERE. The more you can make this clear, the more your clientele will feel you are taking this seriously and it will inspire confidence. This applies to your delivery process as well.
Other Bricks-and-Mortar Retail:
Unfortunately, non-essential bricks-and-mortar stores are likely to struggle as they grapple with closing stores and rent bills to pay.
To survive, you’ll need to quickly adapt an ecommerce and delivery strategy. Leverage your email marketing lists to get your first online customers. After that, you may need to invest in paid-media to make consumers aware of you and your offering.
Unless you sell essential services, you’ve likely seen a decrease in sales over the last few weeks. Consumers have been distracted with essentials. As things normalize, expect to see ecommerce pick-up with vengeance (depending on your niche of course).
What will probably be down:
- Luxury goods: anything vanity related will likely be down as people set-in at home. Without anywhere to go to show-off your new wares, people will transition their spending habits.
- General fashion, clothing, & accessories: same reasons as above
- Health & Beauty: same reasons as above.
- Anything to do with travel, except for potential niches in insurance as even domestic travellers look for more security.
What will probably be up:
- Groceries, Food & Drink: many people won’t want to brave stores.
- DIY Home Renovations materials, supplies & tools: many consumers will have more spare time to tackle projects around the house.
- Gardening: more time will be spent in yards this spring.
- Activities, hobbies, arts & crafts
- Kids toys & activities
- Cooking paraphernalia: many people who depend on take-out for most of their meals may start cooking more. Also think of all the time people have to take cooking master classes and want to round out their tools.
- Home gym exercise equipment: with gyms being closed people will be looking to supplement at home.
- Technology: mixed bag here. I predict essentials like computers and webcams will be more popular as people assess their home office situation. Vanity tech like the next greatest iPhone, apple watches, fitness trackers, etc, I expect to be down.
- Furniture: all demand will likely move online for several months. Home office furniture will likely be the biggest winner.
- Flowers and Gifts: I don’t know about flowers, but online gift giving will be huge. Think of all those grandparents that won’t be able to see their grandkids for the major holidays and birthdays ahead!
In the midst of a global recession, it won’t be surprising to see companies pull back budgets. The key is to make sure your service is essential and to prove the ROI on how much moolah you SAVE companies. ROI will be the king & queen more than ever!
At the same time, B2B companies won’t be able to use traditional, relationship-based sales tactics in the same way as before. With trade shows and exhibits cancelled and sales calls either cancelled or switched to remote meetings, it will be a challenge to networks and generate leads. For many B2B businesses that have not yet embraced a digital transformation, this crisis will highlight just how effective adding digital sales enablement can be. If your B2B business is not already thinking about a digital strategy, your competitor is!
Play The Long Game
In the long run, there will be many benefits available to businesses that keep focusing on digital transformation and digital marketing in the years to come. Although it can be hard at this time, you can reap the benefits down the line as the opportunities in online shopping and advertising grow.
- Ecommerce. People are forming new online consumption habits during the pandemic. Habits are difficult to change, so expect a new, digital normal once physical distancing measures start easing off.
- Digital Marketing. More people will eventually start turning to digital marketing. Get a head start and stay ahead of your competition.
- Social Commerce. People have increasingly been hooked on social media platforms to stay connected. There will be opportunities to tap into the expanded audience and provide a convenient platform for users to shop. That’s why social commerce will likely expand faster than expected.
While crises are challenging and very difficult to navigate, there’ll be both short-term and long-term opportunities available for businesses that are able to adjust to the changes.
“Never Let a Serious Crisis Go To Waste”
“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”— Rahm Emanuel
I’m a silver-linings type person.
I had a lot of great plans this year. Personal development plans, business plans, family plans. A lot of them aren’t going to happen now, and there’s going to be a lot of hardship instead.
But what we can do is take what the world gives us and find our opportunity. These are perfect opportunities to re-invent ourselves and our companies. It can be the catalyst for change that was always needed.
Necessity is the mother of invention.
In a matter of weeks the world became digital first. Strategizing about how your business will not only serve, but market to, a digital-first world is no longer a luxury.
We will rise up to the challenge. The economy will come back.