2020 is dealing business owners a number of unexpected challenges. Here are seven actions businesses should be doing right now to survive and thrive.
2020 is dealing business owners a variety of challenges that we simply were not expecting. There was certainly talk of recession in 2019, but the depths of uncertainty that are happening right now goes past The Great Recession, beyond The Depression, and back to the 1918 influenza pandemic. The world that existed in America in February 2020 ended. We're currently in The Great Reset, a time of great change where the outcome is uncertain. In the following months, we'll enter a world with consumers reeling from massive social change and recovering from a life-changing health crisis.
Here are seven actions businesses should be doing right now to survive and thrive. Each of these steps supports the core idea that marketing is the antirecession tool that can buoy against lower consumer demand and uncertainty about how to message to consumers.
Look at past economic downturns.
Companies including Airbnb, Instagram, Salt and Straw, Domino's Pizza and Netflix all flourished during the 2008-2009 Great Recession because they had a strong product that was communicated well to consumers.
Netflix rolled out the ability to stream content to consumers. Instagram discovered that photo sharing was the key featuring consumers loved. Airbnb saw there was an opportunity for individuals to earn extra income and free up temporary living spaces for travelers. Salt and Straw found success in artisan ice creams sold out of a cart in Portland. Domino's Pizza was in a place where customers simply did not like their pizza. Being told that your crust tastes like cardboard is not a good place to be. By changing their recipe, launching a pizza-ordering app and lots of consumer messaging, they became a company loved by its customers. These companies thrived in a very bad economy.
In fact, research shows, going back to 1921, that companies that spend when the market is down have a stronger opportunity to win as the market recovers. This happens because companies connect with consumers while other companies are dark. These companies reaffirm stability and prowess when times are tough. Firms that do well succeed because they are nimble, quick to adapt to rapidly changing market conditions and change their product offerings to align with current customer needs.
Decide if marketing is right for you
Whether you're an essential business or not, look at the evidence about past economic downturns to see opportunities. Out of the 2008 Great Recession, companies including Smashburger, Airbnb and Instagram were created. These companies thrived due to strong marketing efforts and great product/market fits. In the almost 11 years since The Great Recession, the Dow Jones Industrial Average increased 438% on the back of an improving and diversified economy. So if you can afford to market correctly, it's to your advantage to do it.
Make strong financial decisions.
To know if you can market right now, take a look at your business liquidity and goals. If you can handle slow sales for 12-24 months, and be a healthy business when people get back to a new normal, that's one indicator that you can spend some of your cash on marketing.
An example of low-cost marketing can be the use of a talented marketing technology managed service that for $1,500 monthly manages your nurture activities. The key idea is to create great content weekly and push it out to your email list so you nurture the relationships you've built, and that you continue to build. The workflow may be this simple: A new email is acquired for a potential customer. That email address is automatically pushed into Hubspot for customer relationship management tracking. It then flows into Mailchimp for an email drip campaign and then Facebook custom audiences for email address remarketing ads. All of that happens with one automation using Zapier.
Any budget over $1,500 can be spent on advertising to acquire more leads, speak to new customers and keep them aware of the opportunities you provide.
Throw out old ideas.
Whether you were successful in the past or not, you have a fresh start. Past successes mean you can venture confidently into the future knowing that when the market is strong, you can win. But you can't rely on old tactics.
Likewise, if you were not as successful as you wish you were in the past, the good news is that the world is very different now. Serve customers with offerings that speak to the current moment and how people will experience the world in the future. Home, comfort, safety, reliability, online communications and essential products are in. People-centric solutions are challenging and are likely to be challenging for years. For example, yesterday's dance studio is today's online dance course. Distance learning, digital readiness and virtual togetherness are all ways that we'll need to connect in the foreseeable future.
Rely on the fundamentals.
Wherever you go, you'll need a map. For business owners, that map is a marketing plan. Marketing is the antirecession tool, because when people have a limited discretionary budget, it's the companies that fight for attention that will win the consumer's spending. Make a plan that allows you to see if you're on the right path. Included in this plan are answers to the questions about what you want the marketing plan to accomplish, who your audience is and the media you'll use to achieve your goals.
Adopt a testing framework.
I never need to be right, and you don't either. You need to be close and have a framework that allows you to understand not what you think is right, but what the customer thinks is right. The way to do this is by deploying real-time analytics from your marketing campaigns to dial into the consumer's needs.
This means using your marketing data to get a sense of the pricing, promotions, messages, products and offerings that your customers want. For example, you can offer clients 10% off, free shipping, or a buy-one-get-one-free offer. You may think that 10% off is the best deal, but consumers may buy more on the free shipping offer. This data tells you what customers want right now. Then, go with it.
Message to the moment.
Finally, the key thing that you need to consider is that consumers have a very different relationship to money today than they had in February 2020. The key difference between then and now is fear. The worst is happening. People will either stop spending, spend dramatically less, cut out big purchases or hide their heads in the sand in an irrational attempt to stop their feelings of intense discomfort. Regardless of the scenario, the consumer's relationship with money has changed. Your marketing messages need to reflect your empathy for the moment, and speak to safety, reliability, value, discounts and lower prices. Not all messages apply to all brands and consumers, but in general, we have to be empathetic to the consumer and their challenges.
If you do this well, and make decisions that allow you to have a peaceful night's sleep, you will be positioning your business for success in the future as your competitors recede. Five and 10 years from now, companies that make decisions in this exact moment will be the companies that serve customers, change the future and create a better world for all of us.