‘Advertising and marketing budgets are among the budgets that businesses should cut first in the event of a crisis.’ This saying about marketing might be right years ago when businesses had to spend ready cash mainly on discounts to spur sales. But in the era when customers have a wide choice and brand loyalty becomes crucial, ‘advertising and marketing budgets’ should not be excluded during a crisis. In fact, they should be properly managed so that brands will not be forgotten and will remain competitive when situations return to normal. There are 3 steps to design marketing strategies to ensure the greatest efficiency in business operations and budget allocations, as follows.
1. Look for Short-term Sales Drivers
This begins with finding out if your products and services are necessary for life, important for emotions, suitable for later purchase or luxury. If they are in either of the first two types, investment in proper and continuous marketing communications and promotions will enable businesses to maintain sales. But if they are not of the first two types, businesses must look for high value customers by using the data that they have collected by themselves or had through online shopping channels. Although there are not so many high value customers, they will generate enormous revenue for businesses. There must be quick communications through customer relationship management (CRM) activities to tell this group of customers that they are always important and there are special privileges for them. This is to keep their brand loyalty.
Then businesses must find new demand through trend analysis, keyword analysis and sentiment analysis. This will reveal what products or services customers will need when they are unable to live a normal life. Quick findings will lead to the strategies that respond to new demand, have never been discovered by any rival and create sales opportunities.
Finally, businesses must analyze how customers decide to buy (funnel analysis) so that promotions or products can be presented closest to the time of purchase (last funnel). It can be the time when customers are comparing product prices via online shopping apps. This is to avert the possibility of losing sales. Advertisements must be at the right times and places so that sales can be closed.
2. Strategic Cost Optimization
Businesses must develop the mindset that marketing budgets are not expenditure but are the investment that will deliver profit. There must be spending strategies so that budgets will be properly allocated. Operators should know which budgets should be cut and which ones should increase to ensure the greatest efficiency in marketing and the best access to the target groups of customers. A decision to completely stop advertising may improve the financial conditions of businesses in the short term but in medium and long terms they may have to invest more to win a market share or build brand awareness.
What must be done next is to analyze the efficiency of each channel of media, properly allocate budgets to the channel that has the biggest influence on buyers and limit spending on building awareness. Study the budget allocations of rivals (benchmarking analysis) to find a suitable share of voice.
3. Long-term Resources Allocation
A crisis is the key factor that changes the consumption behaviors of customers. Therefore, businesses should re-evaluate their brand value and unique selling points to find out if they are still attractive or relevant to customers. If the unique selling points do not meet customers’ demand anymore, businesses should quickly solve the problem by presenting the new unique selling points that give both functional benefits and emotional benefits and re-positioning their brands to suit the characteristics of target groups of customers. Besides, businesses should increase the value of their brands and present the activities that show their corporate social responsibility and creating shared value (CSR/CRV) to make customers love and be fond of their brands.
For example, budget airlines increase their brand value by sending messages to boost the morale of customers during the COVID-19 pandemic. This brings emotional benefits because customers feel that the brands understand their hardships. Such airlines also grant privileges to the doctors and workers who play important roles in controlling the disease. The airlines give them freedom to change the dates of their flights without any restriction and choose seats free of charge. This offers functional benefits. It not only accelerates customers’ decision to buy but also tends to make this group of people loyal customers when the crisis improves and purchasing power returns to normal.
Besides, portfolio management is vital for the long-term growth of businesses. It includes developing new products that will make sales, ending the investments or products that do not generate profit and finding the unmet need of customers to create new products.
Apart from the 3 steps of marketing strategies, businesses must evaluate their own operations to ensure they will survive and grow after a crisis.
- Businesses with limited funds should attach most importance to cash flow. They must consider each investment project extremely carefully, make it worth every penny and ensure it will realize solid return. Importantly businesses must decisively conduct marketing campaigns to promote the products that make good sales and end the products that do not make profit.
- Businesses with big money and potential for long-term operations, in a crisis that weakens most rivals, see opportunities to become market leaders. They must speed up marketing activities and spending on online and offline channels in balance to attract customers and finally become one of customers’ top-of-mind brands.
In the midst of every crisis lies opportunity. Businesses, regardless of their types and sizes, should keep creating selling points for their products because these are the reasons why customers will buy their products instead of their rivals’.