Of all the predictions for the shape of the economy as we recover, most analysts say a ‘W’ is the most likely and the best way to plan marketing.
Firstly, it is a well proven fact that share of voice should be the same or higher than market share. But brands that spend more on advertising during a recession recover faster and come out stronger: brands that ran excess share of voice (ESOV) at 8% or higher retained more sales and bounced back to growth more quickly. This spend was accompanied by strong investments in R+D and related areas.
We do need to bear in mind the awful human tragedy we are dealing with and the unprecedented lockdowns impacting governments, businesses and supply chains. Uniquely we have psychological effects: for example, in Sweden people were always able to dine out, but fewer did. And, unlike a normal recession, we had supply AND demand impacts… so it isn’t quite clear what this will mean. Combine this with localised virus flare-ups and a government furlough scheme ending by Christmas, and we foresee some bumps in the road to recovery.
We don’t see things flatlining forever, and we don’t see ‘all fine by Christmas’ either. All this means we’re recommending making marketing plans for a ‘W’ recovery: so what does that mean for marketers?
Firstly, you need your Board to see and show strong support for Marketing as a five-year plan [don’t Go Dark etc.], avoiding short-term discounting, mass activation campaigns and the like. Depending on your business and your sales cycle you may see more large spikes up and down in sales, perhaps another drop around year-end or early 2021, but you need the majority of the Board to see the five-year long-term goal and vision here.
Secondly, we see three phases right now: reduce, reframe, recover. So where is your business right now? Perhaps still in ‘reduce’ mode, or partly in hibernation? Other businesses are relatively unaffected or can be back to normal quickly. So, a checkpoint: are you or your clients having to pivot your offer significantly, are there real opportunities for innovation around any or ALL of the classic Four P’s? We’ve already seen excellent examples of reframing: from fire service crews driving ambulances to the world’s top restaurant becoming a burger joint. Nimble businesses found new offers and, in some cases, combined them with old ones – so could there be NPD or supply-partnering opportunities, born in Covid, that become permanent? Are there parts of your offering that need to be put into hibernation?
Thirdly, we need to find out what recovery looks like for your business. Where will early customer restarts be, where will the first green shoots of growth come from ?
All of this work starts with another ‘W’ which is what we call your Why. A key duty for marketers is discovery sessions with your clients NOW, to see where they are at and reconfirm that the pain you remove for them, the jobs you do, are still at the price/value points that they were a year ago. What are their new issues and opportunities? This will power your negotiations with the Board, give you hard data for innovation, and tell you where some of your green shoots may be.
Anticipating further dips would also prepare your Board for the unexpected.
So, all in all, we’re W lovers too!