3 key tactics for adapting your business due to changing consumer attitudes

Right now, consumers are facing a world no one has ever seen before. As a result, what they value most is changing before our eyes. And businesses are  under great economic strain. How can your marketing efforts boost your relevance to consumers post-crisis? And how can you prepare to do more with less? Philip Guiliano, a partner at BrandActive, recently sat down with Andrew Hall, former EVP of WPP and Mark Bonham, mutual fund pioneer, to discuss these very issues.

Going forward, will consumers have a pent-up spending mindset, where once they are free to do so, they will be spending on everything they missed out on while on lockdown? Or, will they choose to follow a different scenario— “don’t need, it, can’t afford it,” which people who are stuck at home now realize that in fact there’s lots of stuff they have been buying that really, they don’t need. According to Andrew, either is possible—and the same consumer may actually behave both ways depending on their situation.

While it may be impossible to predict which route most people will take, it’s no secret that consumer spending demands are changing right now. In aggregate, consumers will have less disposable income and will be making decisions differently. The monthly budget they allocated for entertainment may be shifted to building a financial safety net. Or they may choose to spend more money on takeout to help smaller businesses in their hometown. But as spending habits shift, the biggest winners in any industry will be those companies that are agile and adjust quickly to the new marketplace. We’ve already seen smart examples, including organizations that shifted to the manufacturing of personal protective equipment (PPE), like Ford, or to supply hand sanitizer, like Molson Coors. Both are providing a valuable service for consumers while maintaining brand relevancy.

Right place, right time: becoming a savior business

And other industries are also in the position of being seen as “saviors.” Right now, financial services companies have an amazing opportunity to provide value and build goodwill with customers by offering forbearance on mortgage, auto, and college loans, administering billions in SBA loans, and waiving transaction fees. Mark compares today’s situation to the Financial Crisis of 2008, sharing that “the good thing is that this time around financial institutions are not the culprit or the instigator to all of this. Quite the opposite. They can actually position themselves as one of those saviors, as one of those positive solutions. They are working with government to get financial assistance out there very quickly. That is very positive. Consumers obviously feel that, see that impact.”

Clearly, hospitals and testing labs are part of the solution as well. As hospital personnel fight the virus on a daily basis, they are deservingly hailed as heroes. Testing labs are also literally saving lives and enabling a path back to normal life– by identifying who has antibodies and ramping up mass volume testing for the virus. Testing labs can credibly reposition in the eyes of the consumer from being seen as a healthcare utility to an essential lifesaving business.

For the many companies that can’t plausibly claim to be savior businesses, their focus for the short term should be to avoid reputational gaffes right now, says Andrew. Here’s one example: Despite a $40 billion endowment, Harvard University opted to take SBA loan money, leading to international push-back and a PR nightmare. So, Harvard felt compelled to reverse course, but the damage has been done. The lesson is that the more you can do right now to provide value or ease struggles for people right now—and avoid even the appearance of gaming the system—the better.

The bigger challenge lays ahead: Following this lockdown, companies that can reposition themselves to meet the new thinking of consumers could be the biggest winners. The question is, how do you position yourself for that longer-term brand relevancy?

A brave new world: How to adapt your business model in times of disruption

An interesting way to imagine this new world brands will look to thrive in is through a matrix proposed by Andrew Hall. This matrix below illustrates which industries can find the largest benefit from pivoting right now. Businesses such as gyms and retail stores and services like LiveNation and Ticketmaster will need to adjust to shifting consumer values and mindsets. Even businesses that fall into the middle ground – such as Amazon or Home Depot – will need to present their products and services in alignment with emerging consumer demands for customer cleanliness, value for the dollar, safe social connections, and more. For each industry, the pivot will look a bit different. For clues, look to the NFL, which delivered their April draft virtually in massively successful faction, or Hollywood studios, which are releasing new films via streaming or on-demand rather than through theaters.

Find the right position for your organization’s brand

Organizations that follow in the NFL’s smart and agile footsteps are poised for success. But that’s a single campaign, so to speak. This disruption will cause many companies to look at their business models, foundational messaging and how their brand lives in the world to connect successfully to consumers whose outlooks have suddenly shifted. What’s also inevitable over the next year to 18 months is that businesses will combine—and that organizations need to eye potential M&A transactions very strategically. Said Andrew Bonham, “… if you approach it right, as being partners in building a business and absorbing another viable business, then it will work out, but it will be a long-term play.”

Evaluate your marketing budget and processes to focus on key priorities

In the short term, what will set businesses up for success is focusing on what can be achieved right now. For marketers, getting your house in order is clearly a no-brainer. That starts by evaluating your brand and marketing spend. This doesn’t necessarily mean slashing operational marketing/brand budgets (though it may end up there), but instead taking this time to evaluate the effectiveness of certain spending decisions.

Next, take this time to a look at how you operate and examine your internal processes – how you handle vendors, manage branded asset production, and more – something that Philip refers to as Brand Operations. Making smart changes now will enable Marketing to deploy staff and direct spending budgets to the new priorities that arise as the disruption eases.

It may also turn out that it makes sense to draw marketing functions into a centralized structure or to add guidance and documentation centrally. This doesn’t mean building up a centralized staff — it’s about creating centralized standard processes, agency relationships, vendors, decision trees, documentation support, and optimized assets to enable greater efficiency. Based on this analysis, you may also be able to reduce unnecessary variations.

Philip shares  an experience from one of our client engagements where we helped unlock $5 million “hidden” money through this exercise. Much of the savings stemmed from diving deeper into what happens with collateral at a local level. The analysis identified a single unnecessary $500 expense, but because that expense was being incurred a thousand times, 12 times a year, it added up quickly.

The true value of this approach is that it strengthens the ability of the Marketing department to deliver efficiently and at a lower cost. Better brand operations improves time to market, frees up resources, and of course, saves a lot of money while improving the quality of outcomes and brand experience. In essence, you’ve primed your marketing engine to run at optimum performance once the lockdown is in the rear-view.

If you are interested in hearing more about this topic, you can listen to two of our recent podcasts. The first is Beyond the lockdown: Changes in consumer attitudes and business realities that marketers need to address now for the thoughtful analysis of Andrew Hall and Mark Bonham. The second is Bringing greater efficiency to brand operations during disruption for ideas on how to maximize marketing efficiency.