In most cases, CEO’s of many companies are forced to respond to a crisis by focusing on the immediate challenges particularly when we are hit by an unforeseen circumstance, such as what we are seeing now, this is normal and acceptable. The question is what is going to be their medium or long-term strategy going forward to see them back on top.?
As we move to plan past Covid 19 in the next few months we will be faced with a tough economic environment. A potential recession, if not worse, according to most economists, with unemployment rates not seen since the 1930’s.
According to a research project done by Harvard University just after the GFC on previous recessions found that companies fell into 4 key categories.
Prevention focused companies, Promotion focussed companies, Pragmatic companies and Progressive companies.
The Prevention Focused Companies, made primarily defensive moves and were more concerned than their rivals in avoiding losses and minimizing downside risks. They cut jobs cost and wherever possible as quick as possible.
Promotion Focused Companies which invested more on offensive moves that provided upside benefits than their peers had done thinking that this is an opportunity without also considering the operational efficiencies of the business.
Pragmatic Companies which combine defensive and offensive moves without a great deal of strategy on the process.
Progressive Companies which deployed the optimal combination of defense and offense.
These companies focused on cost-cutting by improving operational efficiency and invested in growth via Sales, Marketing and R&D.
The difference between the Pragmatic focused Companies and Progressive Companies in my view, was how they approached cost-cutting. The Pragmatic company cut costs, cut staff just like the Prevention focused company. The Progressive company improved operational efficiency which provided cost cuts but did not cut staff and instead trained and redeployed and invested in R&D and Marketing.
The risk of a Prevention company strategy is that by cutting cost means you are not funding or investing in your future growth generally been Sales and Marketing. Prevention companies try to do more with less, which often results in lower quality therefore a drop-in customer satisfaction. Even worse the cost-cutting decisions become centralized and breeds a culture of cheap products, cheap staff and the focus becomes survival both personal and organizational.
The result is that few prevention focused companies do well after a recession according to the study. They trail the other groups, with growth, at an average of 6% in sales and 4% in profit compared with 13% and 12% for Progressive Companies.
If you choose to be a Progressive Company you must be asking yourself, what do I need to do? Where do I advertise in all this mayhem? How can I track and measure the performance of my growth/investment strategies?
The First step is to put aside your current business plan and put a new strategy in place that takes into consideration the changed conditions.
Secondly, make sure all your marketing collateral is in place, up to date and supports any marketing initiative and message you may wish to get out.
Thirdly make sure your products and pricing match the new market conditions and needs.
Fourthly make sure you have a well-designed customer journey and all touch points you do are measurable and trackable. (ref below Customer Journey Design).
Fifth Start your Marketing and Advertising activities once you are clear who you are targeting. Right people, right time, right offer, right price and right channel.
Where is the audience? The data is showing a strong trend moving to Social Media platform and digital as people spend more time locked away or working from home. Below is a graph showing that over half the world population is on Social and on Mobile. With 2.5B on Facebook globally.
(ref below Social Media Use Around the World)
The graph below shows that during the working from home and the Corona Virus the open rate of emails has also increased as people spend more time every day on their devices
How do I measure and track everything? There are thousands of tools on the market to assist with your marketing and tracking. After much research we at OnePoint found the most comprehensive and best value for money is Hubspot. Hubspot covers CRM, Marketing, Sales and Services and will allow you to get in for free and slowly scale up as you need.
If you require assistance with setting up your strategy, make sure all your marketing collateral is consistent or to set up your marketing automation and launch a campaign or simply have a chat to check everything is in place, email me on Kerim@1pt.com.au for a 30 minute discovery chat.
Kerim El Gabaili FAMI CPM
02 8889 3780