By Chris Martin, SVP of Customer Development, Client Command
Yes, the COVID-19 pandemic is unlike anything our country has ever seen. However, we know from past economic interruptions, companies that find ways to continue pressing forward can significantly lessen the time it will take for them to recover and can win bigger on the other side.
Let’s look at some examples:
- During the Great Depression of the 1920s, Kellogg’s catapulted Post as the dry cereal category leader. Post cut back its ad spending while Kellogg’s doubled its spend, fueling a 30% growth.
- Toyota maintained its ad spend amidst economic fallout from the energy crisis of 1973-75. By 1976, they eclipsed Volkswagen to become the top import manufacturer.
- In the early 1990s, two fast-food chains maintained their ad budgets while the known leader scaled back. The results? A 61% and 40% increase in sales for Pizza Hut respectively, and a 28% fall off for McDonald’s.
- The Harvard Business Review studied businesses after three recession periods and learned that businesses who simply cut costs (people, marketing budgets, and operational expenses) to manage in prevention-mode, lagged other businesses by 50% in both sales and profits, while having the lowest probability (21%) of pulling ahead when times get better.
- During the 2009 recession, Amazon invested in innovation and developed products to help consumers save money on books. Kindle was born, and Amazon’s trajectory changed.
Here are four things to keep in mind as you turn the lights back on:
1. Getting the right message to the right person has never been more important. Don’t just turn all of your marketing back on and hope for the best. The market has changed. Our view of safety has changed, consumer media habits have changed, and the economy is in a different place than it was just a few short months ago. Going back to what you were doing before COVID-19 — the messaging, the media mix, the offline data models – could limit your recovery.
Application: This is the time to evaluate every aspect of your previous marketing and to identify the strategies that are most relevant to today’s consumer and extinguish the rest.
2. Switch your messaging gears. Dealers often are programmed to think lower funnel in their messaging — focusing on incentives, vouchers, and trade offers. To turn the lights on effectively, we need to think bigger picture. Recent surveys are clear – Consumers expect companies to connect with them with empathy and helpfulness, clearly putting a shopper’s needs first. They say the dealer who starts the conversation with “Buy now!” is tone-deaf.
Application: When messaging, think upper funnel. Start with messages that establish trust and reliability. Let them know their health matters, so you’re expanding “we come to you” services and online retailing options. Help them take care of their families with service discounts and payment deferments.
3. Embrace change. You can’t turn the lights on with messages relevant to the consumer without a service to back it up. Dealers must build out their “we’ll come to you” strategy. You know, the ideas that put Carvana on the map – at home delivery, at-home test drives, online purchasing. Although stay at home orders could diminish in the near term, social distancing may not. Morgan Stanley recently projected that only 50 percent of the workforce will go back into the office in August of this year.
Application: Keep taking steps to move as much of the sales process online as possible and equip your teams to communicate that message. Start with your marketing, simultaneously train your sales team and equip your BDC with scripts and engagement tactics that communicate upgrades you’ve made and the heart behind it.
4. Double-down on people, not media. Now, internet usage is skyrocketing, but just because more people are online, doesn’t mean your digital strategy is reaching actual shoppers. Truth is, most digital ad spend is connected to anonymous cookies. The faster you can turn on marketing to actual shoppers, the better the investment for you, and the more relevant the content for the customer you hope to serve.
Application: Prioritize marketing strategies that identify people who are actively shopping today. The Active Shopper Network® reports online shopping activity is fluctuating with the changing events of COVID-19. What a shopper is doing today might not match what that shopper does tomorrow. You want to get in front of shoppers as quickly as possible and stay with them while they shop. You do that through data, not a media channel.
We’ve learned from history that those who go dark and/or stay dark too long, take longer to recover. Take intentional steps today to more fully adopt a consumer-centric business approach, craft the right helpful messages, and connect with the people who most want to hear from you.
ARTICLE BY Chris Martin
Chris Martin is the SVP of Customer Development for Client Command. Client Command’s Active Shopper Network is uniquely positioned to offer dealers real-time insights into who has started shopping, stopped shopping, or continued shopping in the past 24 hours.