Consumers may cut their discretionary spending by up to 50% this year. Here’s what you can do to survive lean times during an uncertain business climate.
If you’re a marketer in 2020, you’re seeing your business through historic times. The year is only half over, and it’s clear that the consequences of the novel coronavirus will be long-lasting for businesses of all types.
In the first quarter of 2020, COVID-19 and the resulting global lockdown caused economic damage in the United States that’s not expected to abate until 2023, According to McKinsey & Company. In some markets, like travel, the damage might be six-times greater than the economic impact of the attacks on September 11th, 2001.
What’s does this challenging business climate mean for marketing? The bottom line is companies are cutting costs wherever they can merely to survive the COVID-19 fallout. In many cases, that includes cutting in-house or outsourced marketing budgets.
COVID-19 is an unprecedented challenge on the business climate
Part of what makes businesses so cautious in this new business climate is how unpredictable the COVID-19 response has been.
That unpredictable response has translated to longer-lasting economic effects. Businesses have been forced to close or limit their operations beyond original projections, causing cash flow issues that are still ongoing as of August 2020. Consumers worldwide are cutting their spending to the tune of a 10% GDP reduction.
Also according to McKinsey & Company, most of the hardest-hit industries won’t start to recover until late 2020 or even 2021. For example:
- Commercial aerospace won’t begin to recover until Q3 or Q4 2021
- Insurance companies won’t start recovering until Q4 2020
- Oil and gas won’t begin to recover until Q3 2020
The six worst-hit sectors saw an average change in stock price that was anywhere from -28% to -44%. Those included aerospace, air and travel, insurance carriers, oil and gas, automotive, and apparel.
Almost half of marketers are bracing themselves for spending cuts
Understandably, hard-hit business owners are holding onto their cash instead of expanding their total marketing budgets. In fact, the Q1 2020 Bellwether Report says that:
- Total marketing budgets declined at the fastest rate reported since the global financial crisis
- All forms of marketing activity received cuts, though market research and events were the hardest hit
- Marketing ad spend is forecast to shrink throughout 2020, but increase in 2021 again
It’s not just small businesses that are affected. Businesses of all sizes and from all industries have felt the pain. Even Google announced that they’re slashing their marketing budget in half for Q3 and Q4 of 2020!
How do you cope when your primary service offering is forecast to shrink for the rest of the year? Marketers are scrambling to make up the sudden gap by changing their service offerings, switching up their pricing, and seeking out different clientele.
With the right approach, surviving the uncertain business climate doesn’t have to be a mad dash. Instead, you can plan ahead and take a lean approach that keeps the big picture in mind.
Marketers can survive tough times by planning ahead — here’s how
You can stay ahead of the changing business climate by using your limited time and resources more effectively. That means pivoting your approach to spend time on the right focuses while the economy recovers and industries bounce back.
Agile planning can help you market with success through tough times. When work is lean, it’s time to get leaner.
These five steps can help you stay ahead of business uncertainty and operate within your means:
1: Refine your message
It doesn’t matter if you’ve already spent 100 hours poring over your brand statement and values. When you have extra time on your hands, that’s an opportunity to refine your message even further.
This is a task that often seems non-essential
enough to ignore, but in quarantine, we’ve all got the time to think about why
we’re in our respective businesses and how we want to change the world.
2. Invest in your content presence
Audiences are consuming content at all-time highs, so now’s the time to devote some attention to a content audit. Look for opportunities to create high-quality assets like ebooks and videos.
Publish relevant content that your audience wants to see while they’re cooped up indoors. And most importantly, publish often to establish yourself as an authority and an expert.
3. Go “zero waste” on your time and resources:
Where are you losing time and money? Now’s the time to pore over every single process that you use and figure out how to make it better.
If your clients aren’t benefiting from Friday morning Zoom meetings, then you can find a better use of that time. If you’re paying for Skype credits when you could be calling for free on Slack, then why not switch? Spend some time scrutinizing and go zero-waste whenever you can.
4. Invest in the right data
Data insights can power email retargeting, real-time targeting, and more. The right insights are easy to turn into an engaging story that resonates with your target customer. But investing in bad quality third-party data is a waste of your time and resources.
Take the time to source trustworthy data and make sure you’re reaching the people you need to reach. The Taxonomy Explorer can help you search data by criteria like user type (email vs. mobile), class (audience vs. dataset), or industry.
5. Don’t lose sight of the big picture beyond sales data
Despite all your best efforts to reinvent the marketing wheel in quarantine, you’re still going to get discouraged here and there when your sales data doesn’t show the growth you’d like to see.
Remember that the uncertain business climate won’t last forever. Most sectors are forecast to start recovering within the next two quarters. The actions you’re taking now to protect your business will support the big picture as it continues into 2021.
Data-based marketing can help you hold on to the shifting business landscape while the world waits for normality to return.
Want to learn more about how BDEX can increase human connectivity in the uncertain business climate? Contact us today to learn how we can connect you with your perfect audience.