Brands Face Twin Unfunded Mandates
With budgets already strained by COVID-19, Marketers must find new sources of funding for efforts to address customers’ top of mind concerns – such as social justice and community health and safety.
Not only have customers’ needs and behaviors shifted in response to the pandemic, but so have their expectations of corporations (See Consumer COVID-19 Concerns Tracker; Consumer Sentiment About COVID-19: What They Expect of Companies). Customers are holding brands to a higher standard than they did before the pandemic hit, demanding acknowledgement, compassion, and adjustments to typical supplier-customer interactions. With similar desires to hold corporations accountable for addressing social justice issues, brands across industries are certainly feeling the pressure to make assertive commitments or risk public backlash.
These commitments, however, do not come without costs. Efforts such as new (or reworked) campaigns, new partnerships, and more accessible products and services can generate significant unbudgeted expenses. With COVID-19 already significantly limiting resources for new initiatives, even marketers eager to adjust their plans find themselves paralyzed by budgetary realities. In short, marketers are facing twin unfunded mandates (See Expected Impact of the Global Pandemic on B2B Marketing Budgets).
As a result, marketers must make tough budgetary trade offs in order to align marketing initiatives with shifting customer behavior and sentiment. Otherwise, they risk public scrutiny and lost market share to competitors able to reallocate resources more nimbly.
Marketers Under Pressure to Do More with Less
Essentially, marketing leaders are facing pressure to do MORE – quicker responses, more frequent communications, increased purchasing options – with LESS – smaller budgets, fewer team members, less time – at their disposal. Already, marketing teams across industries have quickly stood up resource centers, digital engagement opportunities, and remote work environments. Now, many are being asked to re-examine business practices and messages not just for physical safety but also to address broader social justice issues customers are forcing to the top of Board-level meetings. And, if there is anything brands have learned in 2020, it is the need to be ready to respond to almost any conceivable situation.
Moving forward, given the unprecedented nature of the pandemic and abounding uncertainty, marketers must anchor decisions about how and what to fund in both marketing goals and customer needs, in order to mitigate the impact of impending cuts and diminishing resources – almost half (44%) of CMO’s are facing mid-year budget cuts in 2020 as a direct result of the COVID-19 pandemic (See CMO’s Gamble on Swift Recovery But Strategic Priorities Reveal Hedging).
This is not to say unequivocally that certain activities and investments need to be cut altogether, but that there needs to be a disciplined focus on minimizing activities and investments that do not maximize business value. Specifically, marketing leaders need to take a critical eye towards how to strike a balance in responding to shifting customer values, behaviors, and needs with a more limited set of resources (See Improve Marketing Decision Making in Times of Crisis and Uncertainty).
Balancing Resource Conservation with Marketing Agility
The key to resource conservation and maintaining agility is being selective in pursuing marketing activities. As in the case of COVID-19, it is often tempting to develop new messaging or launch marketing campaigns in response to a current event or societal conversation – if for no other reason than to demonstrate acknowledgement and drive brand association.
Although the messages themselves are typically benign, the possibility of wasted resources is not – especially considering the prolonged uncertainty as customers and economies attempt to reopen. While social justice messaging can be “cheap” – as in the case of tweeting your brand’s stance – it can also have the effect of writing a check marketers are not prepared to cash when customers start to hold brands accountable for bold commitments made online.
Despite infinite opportunities to address social unrest concerns, marketers must prioritize messages where the brand has a credible perspective and can provide insight that is valuable to both customers and the brand. For example, messages should offer something of substance, or value, to the customer – simply acknowledging the presence of COVID or expressing general sympathy is not unique and wont drive strategic objectives (See How to Rethink Your B2B Content Marketing Strategy in Response to Market Disruption).
On the other hand, when concerns related are creating barriers to purchase, brands have a prime opportunity to both help the customer and drive commercial outcomes via messaging. For example, a customer might be considering purchasing a new car, but is stalling due to anxiety about the safety of test-driving cars. In this case, car dealerships should alert customers to new cleanliness procedures for test cars and curbside pickup processes they can use to avoid entering the dealership (See Engaging B2B Buyers in an Uncertain Environment).
Additionally, you may consider devoting resources to staying in tune with, if not ahead of, changing customer perspectives and behaviors. This could range from informal tracking of customer conversations on social platforms to regular insight sharing conversations with customer-facing sales reps to more formalized sentiment monitoring.
Initially, customers expected generalized COVID acknowledgements, examples of how brands are helping employees and customers, and announcements around changed business processes. However, as the country moves from the respond to recovery phase, customers favor substantial messaging that helps them accomplish tasks related to a brands products and services to trite COVID communications (See How CMOs Can Transition From Crisis Response to Recovery). Aim to be as prescriptive as possible in addressing COVID-related concerns and needs.
Implement These 4 Selective Measures
In order to effectively meet customer expectations and drive maximum business value with social messaging, marketers need to implement strict evaluation of ongoing and potential future initiatives.
- Prioritization: Develop new messaging when it is relevant to customers, your brand, and values, and presents a barrier to customers purchasing from you. Each opportunity must be evaluated against not just other new initiatives but also against the broader marketing plan.
e.g. Outline specific precautionary measures employees are taking when interacting directly with customers at a point of sale to reduce anxieties acting as barrier to purchase. But, refrain from generalized health and safety messaging, such as “Our customers’ well being comes first,” that do not answer a specific customer question.
- Filtration: Evaluate ongoing messaging activities and identify where you should and should not be responsive. New programs may require sustained investments but there may other messaging, experiences, or policies that can end in order to conserve resources for future needs. Indeed, some organizations are addressing societal issues and potentially saving money such as the numerous brands who recently announced an extended “pause” on certain social media ad spend due to customer concerns over how the platforms handle hate speech.
e.g. Reconsider the need to sustain heavy COVID messaging if other priorities, such as diversity and inclusion, emerge (See Leveraging Diversity and Inclusion in Your Marketing Strategy).
- Elevation: Marketing is often the vehicle for investments in customer-facing messaging and experiences, but many of the imperatives to adjust those strategies may be broader challenges encompassing Operations, Talent, Assurance or Technology. Marketing should elevate prioritized investments to organization-wide budgeting conversations where appropriate.
e.g. Investments in new platforms to enable digital commerce experience (and limit in-store purchases) should be elevated to an organization-wide conversation about digital transformation.
- Sustained Reallocation: As organizations largely retreated to remote working environments, Marketers may have unexpected resources available from reduced travel, lower media fees, and agency and technology fees in variable cost models. While investments to address health and social justice should not be viewed only one-time needs, business lessons from COVID-19 may reduce the need to fund once “sacred cow” budget line items in the future.
e.g. What will likely be a lasting increase in web-based video conferencing reduces travel expenses, which can be re-allocated to longer term commitments to diversity and inclusion initiatives.
Concentrate Marketing Resources Around Long-Term Goals
The ongoing global health pandemic and mounting social unrest represent an inflection point for marketing organizations. The sudden onset and prolonged uncertainty regarding recovery demand proactive resource optimization, which marketers can achieve through rigid prioritization of messages and filtration for high-impact activities. Unless shifting customer realities are causing purchases to stall, avoid the temptation to respond to every swing in customer behaviors and needs – think long-term as you develop a messaging strategy that can be adapted in response to changing customer behaviors and corporate goals.