COVID-19: Marketer’s Survival Guide. Part Two It’s been three weeks since lock-down and four weeks since most people have been working from home. As we all settle into our new way of life, stock levels of essential products return and we all get used to working from home, the old world seems to be a distant memory. Marketers have had a bit of time to take stock and many brands are clearly starting to pivot to meet new consumer needs. It’s a new world order and we need to ensure we plan and react in a way that allows us to thrive as we come out of the other side. In this second part of our COVID-19: A Marketer’s Survival Guide we take a look at changing consumer behaviours and how you can plan for the current challenges and through to the other side. (If you missed Part One – Please access it here) The changing consumer now and into the future Consumer behaviour is evolving. Excess demand for products means consumers have no choice but to order from anywhere that has stock – throwing loyalty out of the window. And to reach an at home consumer, businesses are having to think creatively to find new ways to use technology to solve life’s problems. Both of these scenarios may mean that consumers prefer these alternatives and not return. As we have witnessed these behavioural changes in the past: In 2014 when London Underground was shut for 2 days, commuters had to find other options to get to work, however thousands never returned to taking the tube – having found alternatives that were cheaper, faster or more comfortable. A recent report by New Market Advisors described that there were 6 factors that lead to lasting behaviour change. In our opinion these should be guiding principles for marketers to understand how this may impact their business and their marketing efforts. Core Motivations change Let’s take Maslow’s hierarchy of needs into consideration. When in a crisis the prioritisation of these needs change in the short term – but they soon fall back into their original place – as soon as we accomplish the new ways of achieving each stage, we move to the next . At the beginning of any crisis as humans we go back to basics – we ask ourselves how we can meet our basic needs – we re-evaluate and re-discover how we feed ourselves and keep ourselves safe. As consumers we suddenly place less importance on self-esteem and self-actualisation – this is a short term reaction. Basic needs of food and safety take priority and we can see that during coronavirus with shortages of supply in food and essential goods. As time passes we move through the pyramid as we figure out the new ways in which to satisfy our needs. Those brands that satisfied the old ways of doing things may not be relevant or available anymore – as consumers we have to go back to the drawing board. For example – Safety – our new need to purchase protective equipment, purchase hand sanitisers and keep grandparents safe from our children are all new ways of living. Love and belonging – our new need to connect with friends and families virtually to make up for lost face to face meetings. These are all ways in which our motivations have changed that has led to an adaptation in how and what we consume. New approaches are appealing We start discovering new ways of doing things. New technologies are used to accomplish previous tasks, new shops discovered on our hunt for supply of goods to meet our needs. Consumers start experimenting when they wouldn’t usually and many may find these new ways outperform the old and never go back. Inertia Ends Inertia – the resistance to change, to continue doing the same thing just because that’s what we have always done before. Self-isolation is a great inertia breaker. For example – an elderly couple who used to visit their local shops to do a daily shop have now been forced online to complete a weekly shop. Or alternatively the local shops changing the way they do business and bringing their products to the doorstep of the consumer through community apps and schemes. Changing these habits may mean they never go back to normal. Only for it to resume afterwards As we said changing behaviours become new habits and we may then be reluctant to return to the old ways. New brands discovered may lead to old brands forgotten. Critical mass is achieved Behavioural changes will remain if there is a critical mass making the shift. Meet-ups that used to happen face to face may find they connect with more people online and continue with their weekly hangouts or zoom calls. Netflix parties that allow consumers to watch programs together may mean this is a new way to Netflix. Netflix and party has a good ring to it! Infrastructure locks in change Turning the spare room into a home office or a gym means we now have the equipment to perform our tasks at home. The explosion of online technology to service global connection on any level means that we spend more of our time gathering online for work or pleasure. The availability of this infrastructure to allow us to continue with the changed behaviour often leads to this behaviour sticking. These changes are not fundamental, the hierarchy of needs remains the same in the long run. The changes are little shifts in the way we do things – but together they make a difference to the consumer. They give the consumer more choice in the ways they can fulfil their needs. They will however make a difference to a brand that is not aware of these shifts, that doesn’t keep moving forward with technological adaptions, that doesn’t keep engaging with the once loyal customer forced to shop elsewhere and that doesn’t keep an eye on the innovative brands that are agile enough to adapt their product offer to meet new needs. As a brand today as you navigate the crisis in the short term and look forward to the long, a solid strategic plan is essential. Marketing planning amid coronavirus So what should you do next? A good strategic plan for navigating COVID-19 looks beyond the immediate circumstances and recognises a small number of realistic scenarios that may result on the other side. These will guide your actions for today, with a clear view of how the world may be different. The New Normal “For some organisations, near time survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The questions is, “What will normal look like”. While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years – Ian Davis, McKinsey and Company A recent article on Forbes, by Stephen Wunker described a 5 point strategic plan to help you set out your stall for weathering the challenges you are facing today and help you succeed into the long term. Plan for 4 distinct phases of the crisis Awaiting the impact—As individuals and businesses attempt to maintain a semblance of normalcy while the coronavirus has not yet had direct effects. We can expect changed work practices, contraction of demand, and uncertainty about making big investments. Withstanding the impact—As health emergencies and business crises abound. Companies will struggle to operate as employees attend to sickness, supply chains break, and both B2B and B2C customers struggle to make purchases. Returning to normal—As people yearn for old routines, the virus passes through a critical mass of the population so that immunity develops, and eventually vaccines become available. Sorting out the new industry dynamics—As changed buying habits and behaviors, along with new business models and a revised competitive landscape, create both threat and opportunity. As with the financial crisis, the fourth phase may be a long one. Plan for it now, so that your actions through the earlier phases set you up for success in that end game. Define the Challenges Taking a step back and assessing the challenges that you may have going into the future as well as today, will ensure that you have future proofed your plan. For example: If you’re at a bank that relies on your branch network to create competitive advantage, and now customers are forced to become more comfortable with virtual services, how will you cater for this when the crisis ends? If you’re a travel company – how will you go about building trust back up once people are again able to travel? Be precise about the challenges to address so that your solutions can be assessed with the right lenses. Clarify the options If you’ve defined your challenges well, it should then be possible to create a set of options to address them. Identify their pros and cons. Note what further options they might lead to: E.g. If you are a retailer and you have decided to invest in a stronger online presence and ecommerce expertise in-house – what is the impact this will have on budgets for your retail stores. If you have decided to sell direct to consumer and bypass old distribution channels – how will that affect your channel relationships in the long run. Don’t forget to consider the long term effects of strategy changes. While it’s important to be agile and react to what customer need today, bear in mind that this crisis is relatively short term and you’ll want to set yourself up competitively for afterwards Build Scenarios There is no way that any of us can predict how this will end, what the new world will look like, however you can attempt to model a few different scenarios, you can do this by asking what if questions. Speak with key internal stakeholders and find out both their visions for the future (in different time spans). Explore multiple business scenarios and what the key drivers and assumptions are for ending up in those! E.g. What do you think your business and consumer situations will be in 1 month? In 3, 6 or 12 months? Guide near-term actions with a clear view of how the world will be different once we emerge out the other side. Stephen Wunker Once you’ve defined your challenges, options and scenarios you’re now in a position to make some decisions around changes to strategy. Try and meet face to face (e.g. using google hangouts) – so you can gauge people’s reactions – bearing in mind you may need to give longer pause than usual to give people a chance to voice their opinion. Consider the most likely scenarios for each stage of the crisis, what your options are and how these will affect both the short and long term before making any decisions Your business’ ability to take a considered, strategic approach on this will be key to setting yourselves up to emerge spectacularly into the new world! What you choose to do in this time can set you up for future success. Try and avoid the urge to act only on immediate gut reaction – focus on a small number of plausible scenarios and consider how to shape your business in the short and long term!