What Marketing Leaders Must Do in the Coronavirus Crisis
What are your responsibilities?
Mar 18, 2020
Leaders must look to the future beyond these challenging times.
Almost every business we work with is understandably planning for the immediate impact that COVID-19 will make on their brand. Without a doubt, this is unexpected and unplanned for, so needs consideration.
Yet now is also the time to think of the long-term and start to review your positioning and how your brand strategy needs to be adapted as we come out of the crisis.
Reflecting history to understand consumer and brand behaviours coming out of a major economic downturn is a useful exercise. During the recession in 2008, the Financial Times analysis pointed to a number of clear guides for businesses. The theme being that now is not the time to cut back, but instead to invest in brand strategy to deliver long-term answers - protecting marketing budgets, researching customers, reconsidering product portfolios and importantly, emphasising core values as part of the brand development.
We are already in the midst of a broken marketing industry where 81% of brands could disappear and consumers wouldn't care. Yet business leaders don't focus on addressing this despite knowing that brand value can contribute to over 50% of shareholder value in consumer businesses, the long-term outlook for brands has been lost in a sea of 'track & react' behaviour. Now then is the time to press the proverbial reset button, we have a changed world ahead of us that we can either adapt to or stumble into - a brand strategy that will be impossible unless guided by strong leadership.
Thus, leadership through this crisis is critical. Fundamentally looking at the wider environment in which the business operates in and the impact that it can make on the communities in which it operates, not just its own blinkered eco-system. Rosabeth Moss Kanter of Harvard Business School discusses how this is the time to place "an emphasis on mission and values that drive the company and how employees can contribute", with leaders needing to "think outside the building".
This type of strategic focus may come at odds at a time when marketing budgets are being cut to ensure survival, but as respected commentator Mark Ritson puts it "no amount of hot deals and clever sales activation can stimulate a market that is currently terrified, locked inside their homes and unsure of their future".
Businesses that spent economic turmoil focussing on the long term sustainability of their brands, while selectively cutting costs to focus on operational efficiencies were proven in an investigation published in Harvard Business Review to be the optimum strategy for surviving a recession.
Their in-depth study classifies business strategies coming out of previous recession and identifies nine combinations of approach. The most likely strategy to create success coming out of a downturn is described as:
"They cut costs mainly by improving operational efficiency rather than by slashing the number of employees relative to peers. However, their offensive moves are comprehensive. They develop new business opportunities by making significantly greater investments than their rivals do in R&D and marketing, and they invest in assets such as plants and machinery."
The report concludes that this brand strategy does not simply provide a strong position in the aftermath of economic turmoil, but ongoing stock market performance demonstrates that it sets out a platform for ongoing brand success.
Delivering the right brand positioning at the right time will be fundamental to success in the emerging post-crisis market. Reflecting on more UK brands declining than growing, Martin Guerrieria of Kantar warned that economic challenges were driving a short-term approach to focus on sales today, rather than sustainability for tomorrow, stating that "this is not sustainable without a meaningful difference, which can only be created through brand building. To avoid losing more ground, brands must reinvigorate their offer and revitalise their connection with consumers – building on their salience to prove their continued relevance."
The report goes on to demonstrate that meaningful difference in brand positioning can be tracked as it aids growth and protects against business failure over other approaches such as pure investment into salience. Indeed, as demonstrated by Binet & Field, taking a long-term approach to brand strategy, rather than focussing on short-term delivery contributes to "very large profit growth".
So what are the key actions to consider for leaders during this crisis:
Address the short-term needs of your business to ensure survival
Customer research and market analysis to define potential future space for your brand
Invest in brand strategy to define the optimum brand positioning for your business
Keep a balanced approach between short-term actions and long-term sustainability to deliver ongoing brand success
This is a difficult time for everyone around the world, and our thoughts are with those affected at a personal level. Brand owners have an opportunity to contribute to delivering economic certainty through strong leadership which will ultimately improve communities as we come out of this crisis.