Usually when we discuss a slowdown, or even a complete pause, in sales there is some form of seasonality involved. For example, if your company sells a product like ornaments that hang on a Christmas tree, then you likely have a huge portion of the year without any sales. Or, if you offer a service like tax form preparation, you likely are at least busier during certain times of the year.
That expected seasonality is normal and can be mitigated quite easily with proper planning. However, when we see a pandemic like COVID-19 hit our businesses with an unexpected downturn in revenue it can be catastrophic. So, business owners naturally start looking for ways to protect their long-term business survival. What does that really mean?
In some cases, it means considering business decisions that you normally wouldn’t consider, have never thought to consider, or know you should have considered long ago. It might even mean going through your financials and questioning the necessity of expenses and looking more closely at perceived ROI. It may also mean trying to develop creative ways of differentiating from competitors. But, the one thing all small business owners can agree on is that CASH IS STILL KING!
Sam Walton was on to something when he was asked “What do you think about a recession?” and he responded, “I thought about it and decided not to participate.” We can expect smart business owners to start thinking about how to hold cash to weather a potential downturn in revenue. But, it’s important not to lose sight of the big picture.
Should Businesses Stop, Pause or Reduce Marketing Efforts?
A common adage says, “When times are good you SHOULD advertise. When times are bad you MUST advertise!” Just like we would say when sales and revenue are peaking, things will change! And as we write this in the middle of the coronavirus lockdown, we know that eventually the economy will come back – it always does.
This unforeseen seasonality in virtually every sector likely hit while business was going well – considering the economy was at an all-time best according to many benchmarking metrics. So, hopefully your marketing efforts continued while things were good. Those efforts are currently carrying a lot of companies that require strong messaging and visibility during the crisis.
Take restaurants or online retailers for example. The SEO work and Amazon optimization they had prepared while things were good are certainly helping now. Can you imagine trying to run a restaurant without an online presence right now? That would be tough, obviously. But, the first thing you would likely do is run out and create a website and possibly use paid advertising and search engine optimization to try to gain visibility as quickly as possible.
We know this is happening because our call volume, as a digital marketing agency, has soared from companies like this over the last 30 days. Many of your competitors are either going online now or improving their current online presence. So, it makes sense to think of your marketing budget in two distinct ways:
- What decisions are best for my short-term business viability?
- How can we maintain market share while things are slow?
- What long-term decisions will help to compete when things normalize?
If you can weather the storm and have enough cash flow to stay afloat for the next couple months, you may want to consider this as an opportunity to flush out competitors who have not planned as well. But, if cash is tight, you may want to simply maintain your position when things get back to normal. If you are in dire straits, however, and you need to preserve your cash – talk to your agency about paying later for services rendered now or temporarily reducing services.
If you’re unsure that you can make it through the next month or two, be honest about it and put things on pause only as a last result. Please review our recent article that includes a business checklist for broader ideas and opportunities to keep your business running during a crisis.
All successful business owners understand that marketing is NOT an optional business add-on to set budget aside for when things are good. It is an essential piece of a business that helps to dampen the bad times, prepare for better times, and excel during those good times!
Evidence That Advertising During a Crisis Works.
The Coronavirus is not the first crisis to hit businesses and certainly won’t be the last! Continuing to position your brand and remaining steadfast while competition temporarily decreases can prepare your business for its highest growth following the recession.
In the article, When a Recession Comes, Don’t Stop Advertising, Brad Adgate points out that in the aftermath of the Great Recession of 2008 ad spend dropped 13% in the United States. But, that it was a mistake that some companies never overcame. The reasons they point out to advertise during a slowdown are:
- The “noise level” in a brand’s product category can drop when competitors cut spend.
- Brands can project stability during challenging times.
- The cost of advertising drops during recessions, creating a “Buyer’s Market” for marketers.
- Brands cutting spend lose “Share of Voice”, which leads to “Share of Market”, which leads to revenue.
Examples of brands that continued marketing spend during economic downturns span multiple industries. For restaurants, take McDonald’s decision to drop advertising and promotion budget during the 1990-91 recession. Pizza Hut increased their sales 61% and Taco Bell increased sales by 40%, while McDonald’s sales declined by 28%. In technology, Amazon sales grew 28% in the 2009 “Great Recession” by offering a low-cost alternative to standard hardcopy books by releasing the Kindle and sticking to the planned marketing investment that came along with that.
What Marketing Activities are Best When Business is Slow?
So, what have we learned from previous times of economic hardship? That it is critical to adapt with efficient processes to overcome volatility in the market as well as to understand the specific demands of your customers. But, not to lose sight of long-term business goals due to short-term slowdowns. The following marketing ideas may be a good idea if you find your business with more time than usual.
Review Your Website
If you’re like most businesses, you change over time. If you have more availability to sit down and review your website comprehensively, that’s a great place to start. Take a look at any products or services you offer and make sure you still offer them – add and remove anything missing or no longer available. Then, look at the pricing at make sure they’re all still accurate (and consider lowering them to bring in more business). Do all the descriptions of your products or services convey value during the slowdown? Consider adding a message addressing the status of the business.
Create Extra Blog Content
Whatever your normal content calendar looks like, double your output! You don’t necessarily have to increase your posting schedule. But slowdowns are a great opportunity to start creating more since you likely have more time. The most valuable commodity we have as small business owners is time – so, see this as an opportunity and write more blogs about topics you know about. Also, consider going back to previous blogs and add more insight that you’ve gained since they were written.
Change Paid Advertising Messaging
It may very well be possible that you have ads set up already that hint at the value of your brand, products, or services. But when consumers tighten their budgets, it becomes necessary to focus your ads on WHY they should spend their valuable money on what you sell. That means focus on value; which is a direct function of reasonable cost and high quality. If you decide to reduce prices, announce that too. Here’s an example of acknowledging the slowdown and adjusting messaging: “Times are tough. That’s why we’re making it easier for you to buy the best and save a ton of money. Introducing our highest value [product] sale of all-time! Call now for details.”
Host an Online Course, Event or Video
Even if you can’t physically make it to the office, you can get a captive audience using Zoom, Skype, YouTube, Facebook, or one of many webinar tools. Sometimes these are premium, and you can generate additional revenue from them, and other times, the goal is simply to stay relevant and potentially sell something else while you give away the information the visitors want. Instructional classes are a great resource to keep customers loyal and can be used later to drive leads from your website or advertising plan.
Step Up Your Email Marketing Game
Reviewing your email marketing strategy from an objective place isn’t easy – it takes a lot of time and requires that you remove any emotion from the performance of your individual email messages. But, start by looking at the templates you use and if the design needs an update, do it! If the messaging isn’t consistent, update that too. Then, look at the lists and segmentation you have set up and make sure that you aren’t missing any sources or statuses. If you use a CRM, take this to the next level and review how email has helped you close deals during the lead nurturing process.
Update Local SEO Information
Updating your Google My Business and Yelp pages are the best places to start. But review things you don’t look at often, like the business description, inside/outside photos, logos, products and services, etc. Then, update them for changes in hours, temporary closures, and (for restaurants) take-out/delivery/virtual options that are now available. Don’t forget that if a change is made to any directory, then it should be updated on every directory and the website.