The Importance of Continuing to Market during the Coronavirus Economic Downturn

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Since 1900, the global economy has averaged a recession every four years.  Hard to believe, but it is a fact.  During all of the economic downturns, we have seen significant numbers of businesses cease to exist.

We have also seen not only those who prosper from being in boom sectors at the time, but also those who have weathered the storm and come out in a good position through continuing to market their businesses.

We want to take you through these two key topics to help you set a course for your marketing over the coming months during the Coronavirus economic downturn:

  1. What is a Recession and What Happens During a Recession?
  2. What Can Marketing Do to Minimise the Impact on Your Business?

To find out how Rogue Can Assist with Your Digital and Print Marketing Requirements and help to create better results for a lower spend, please click here 

What is a Recession and What Happens During a Recession?

In fairly broad terms, a recession is defined as two consecutive quarters of economic decline {I prefer to use this term, as last time I checked, growth cannot be negative – the actual definition of growth is “the process of increasing in size” as defined from Oxford Languages}.  Semantics aside, a recession is the big scary “R” word that has been bandied around and threatened on a number of occasions over the last 3 decades including the GFC in 2008-9, however, each time, the Australian Economy has narrowly dodged a bullet and escaped falling into what is officially known as a recession.

Recessions come in a number of different shapes or geometries, and these shapes indicate the length and impact that a recession will have on our economy and our businesses.  Let me explain the 4 main shapes that economists are talking about being relevant to the “Covid-Economy” {note I have borrowed these Graphs from “The Brookings Institution”}

V-SHAPED RECOVERY

V Shaped Recovery

The “Best Sort of Recession” {if there is such a thing} is what is known as a V-Shaped Recovery.  A V-Shaped recovery indicates that the economy goes back to its baseline growth rate very quickly.  It also implies that there was no noticeable lasting impact on the economy.  In short, everything normalises very quickly.  This is what we would all love to see happen!

U Shaped RecoveryU-SHAPED RECOVERY

A U-Shaped recovery generally indicates a deeper recession where the damage to the economy is more significant and therefore, longer lasting.  The economy eventually recovers to its former baseline levels, however, this will take longer and the economy will stay at a level where it is “bottomed out” for longer.

At this stage, many analysts around the globe are predicting that this is the type of recession that most countries, including Australia, are currently facing.

 

W Shaped RecoveryW-SHAPED RECOVERY

A W-Shaped recession is also known as a “double-dip” recession.  Under this model, as the name indicates, the economy has a period of recovery back towards its baseline growth before taking a second “hit”.  This is not predicted to be the outcome in Australia during the “Covid Economy”, unless of course there is a delayed second wave of Covid-19 at some stage in early 2021 where we have to lock down for a second time – heaven forbid!

Swoosh Shaped Recovery

SWOOSH-SHAPED RECOVERY

This scenario demonstrates a very rapid decline in the economy, followed by a quick partial recovery back towards normal base line growth rates.  Unfortunately under this model, the remainder of the recovery takes significantly longer.  This indicates longer periods of higher then usual unemployment and an economy that struggles to regain full confidence.

Again, there are many economists who are predicting that this will be the likely scenario for most economies around the world in coming months, with many labour markets around the world looking unlikely to bounce back anywhere near as quickly as they fell.

With programs in Australia such as JobKeeper, and various Federal and State Government Stimulus packages in place for business, not to mention the fact that Australia has had relatively few cases of Covid-19 and therefore, less restrictions that have eased more quickly, it is hoped that Australia will avoid this style of recession/recovery, as this “swoosh shaped” recovery can take several quarters, if not years.

What Can Marketing Do to Minimise the Impact on your Business?

There are two vital roles for marketing to play in minimising the impact on your business through a period of recession.  Firstly, it can minimise the decline of your business’s sales.  Secondly, it can help accelerate your growth out the other side of the downturn.

We all understand that there is an inherent fear for business owners and managers associated with the “R” word.

Picture “The Fonz” trying to say the word “wr.. wr… wr…. Wrong” in that episode of Happy Days all those years ago.  Mention the word Recession to most business owners, and you might find the same style of stuttering occurring.

Keep in mind however, that as much as the “R” word can mean doom and gloom for so many, it can also present significant opportunities for the Savvy and Quick to Adapt crowd.  We have already seen so many examples since mid March, with Distilleries turning off Gin

Person In Yellow Coveralls Staying Positive During Recession Economic Downturn

manufacturing and turning on Hand Sanitizer production as just one example of maximising a temporary market opportunity.

For many businesses with specialist equipment {like ourselves here at Rogue}, it can be a lot more difficult to switch off one tap and turn on

another.

So then the question becomes, what do I do?  How do I ensure the ongoing survival of my business?

For many, the first {and most understandable} reaction is to cut costs.  Strip all those “unnecessary” costs out of the business.  Those things that don’t have an immediate and measurable impact on the business have to go.

And all too often, marketing budgets are one of the first cost lines to be stripped out, which is also understandable, mainly because it is an easy target.

Switch off Adwords.  Turn off your Digital Marketing campaigns.  Stop printing and distributing your flyers and brochures.  However, if you are not marketing to your current and prospective clients, you simply stand to lose potential revenue, as many of your competitors will actually take the opposite approach and will increase their marketing activity in an attempt to gain market share and/or increase their brand presence.

Therefore, the question becomes, how do I continue to market as a business during a recession?

There is a template to follow.  It is a 3 stage plan for marketing through a recession.  I have provided some tips below:

Stage 1 – Minimise the Negative

It is important during the initial stages of a recession, such as those that we are in at present, that we maintain our agility and manage our marketing campaigns.  Those companies that have managed to successfully navigate this stage so far, have been the ones who have already adjusted their marketing to cause-related or brand equity campaigns, or they have been able to adapt and develop and market products to satisfy a requirement that has arisen from Coronavirus {such as Floor Stickers or Sneeze Guards} and maintain their revenue stream in that way.  To put it simply – create revenue streams from areas that you wouldn’t normally in order to minimise the impact of the initial down turn.

Use all the data you have available to you from your socials, website, google analytics and email marketing software, to understand which products and services are presenting as being relevant for your customers, and develop ways to create solutions to these requirements.  Work with your suppliers and your teams to innovate.  Meeting the market is critical to your success during an economic down turn.  But don’t be fooled – meeting the market doesn’t mean you should be dropping your prices.

Stage 2 – Shorten the Duration

If you can keep your brand top of mind, as soon as there is an uptick in the economy, you stand to benefit.  Those brands which continued to market through the Global Financial Crisis experience significant growth after the crisis ended.

Focusing on key areas such as Brand Loyalty and Valuable Content are key.

If you can understand the concerns and requirements of your core customer base during Stage 2, and develop solutions to assist with these concerns or requirements, you will ensure that you maintain brand loyalty.  Once spending behaviours change, that loyalty will transform into business growth.

It is also important to understand the importance of how you position your brand.  Over the last few months since our initial lock down, you would have noticed that most brands have smashed their email and social media databases with product related “sales” updates.

Whilst this is understandable as everyone is desperate to maintain sales in any way that they can, the brands that have been stand outs, have been those who have provided meaningful, relevant content to their customers.

Content that has been able to assist their clients with knowledge and information about the current situation that they haven’t already seen 100 times that day on every news service.  Information about assistance that is available from their brand, to help their customers.  Tips on how to re-engage with customers during and after the lock downs. Or even details about what a recession looks like, and how to manage your marketing through a recession!

Woman Updating Website Seo Quick Wins That Can Be Implemented Today

The key take out here, is the most memorable content you can provide – the content that people will recall long after your 50% off sale prices are forgotten, are the informative pieces that help them to map their own path through their own situation.  Or the piece that helps to provide a solution for their requirements.

You should also be willing to try different things.  Be creative with how your business can provide value.  There have been many examples of clubs and pubs that had to shut down completely during the lockdown, doing exactly this.

Now is the time to take a step back and assess your website, and work on your SEO too – because as we all know, this is an activity that takes time to work and further optimising your site at a time when your competitors aren’t, will put you months ahead once we enter the recovery stage. Read about some small steps you can take that have worked for us in our article here, that you can start applying today to your site.

One of our clients even took their nightclub virtual and gained a significant following and increased memberships by making sure that their regular patrons had an online nightclub that they could interact and party with during lock down!  They quite literally took themselves from the brink of closing forever, to having a more loyal fan base then before the lock down began.  An amazing story through a willingness to think outside the box, and try something different.

So what you can do to adapt and help shorten the duration for your business?

Stage 3 – Make it Back

The key to stage 3, is making sure that you have nailed stages 1 and 2.  Being top of mind through following the steps above, allows you to be best placed to maximise the benefits available from a recovering economy.

Moreover, if you have minimised the negative & shortened the duration, and been clever with how you manage your money including maximising the incentives and programs available from State and Federal Governments, then as the downturn ends, it will be your opportunity to surge ahead of your competitors through increased marketing spend.  Many businesses will be exceptionally short on cash, and unable to re-invest in their marketing, as they wont have undertaken the critical steps in stages 1 and 2.  There is no better time to invest heavily in your marketing so you can increase your market share.

It is paramount through all of this, to realise that Covid-19 has changed many of our regular behaviours forever.

You should ensure that you understand which behaviours have changed {such as more people working from home more often}, and cater to these changes.

Adjust your offer and/or diversify your product range to meet the changed market.  Take the time to really think through where your business can adapt, and introduce new & unique products or services to cater for the changed market.

For more information on how we can work with you on your marketing, design, print or web requirements – simply get in touch.

We’re always here for a chat.

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