How are businesses and marketing affected by the ‘tsunami’ named covid-19
In addition to significantly affecting people’s living habits, Covid-19 virus also has impacts on companies’ business in many industries and scales. This article was born to talk about the feelings of many organizations’ leaders before the wave of COVID-19 as well as share some viewpoints and tips in running businesses and marketing for the time being.
Businesses affected by Covid-19
Several businesses have benefited and have grown unexpectedly in the current context such as mask and sanitizer production, e-learning, e-commerce, etc. But these are just minor compared to the number of companies suffering losses from COVID-19. We can divide the affected sectors into 3 main groups:
- Group 1 is the industries directly affected by the epidemic such as education, tourism, events, commercial centres, etc. Because the business model and the main products/services of this group are offline and physical so people’s psychological fear has directly influenced their consumption behaviour.
- Group 2 includes industries that are involved in the supply chain related to China. Typically, the companies whose customers are accommodated in this country. But some businesses that need to purchase raw materials or finished products from China will also be affected by not having products to sell or unavailable of conversion.
- Group 3 is the industry providing services or products for the two groups above.
How businesses face challenges
Running businesses in a complex disease situation is a survival issue. It requires businesses to have appropriate solutions if they do not want to face the worst scenario.
Through discussions with partners and from personal experience, Quan offers some solutions that firm owners have been implementing to cope with the current disease situation:
- Change goals and strategies: Instead of growth, companies have set new goals is to exist. Long-term business plans are also being changed by shorter-term activities because no one can accurately predict how the disease will continue, the economy, and customers’ consumption habits. These projects have a shorter implementation time with fewer resources and very specific goals which serve the “living” goal of businesses. Some examples consist of several amusement parks selling year-round entry tickets at special prices to boost sales, guaranteeing positive cash flow (although profits will fall or even become negative) or beauty salons that promote sales of service packages at home for customers.
- Optimize costs: When the business is favourable, the expenses are seldom concerned. But when things get tough, businesses are forced to revise costs and maximize by measuring efficiency and cutting budgets in order of priority. Make scale smaller is also a solution that needs to be taken into action to reduce the expenditures for businesses.
- Adaptation through products/services: With the current complicated pandemic situation, parents do not take their children to extra-educated centres. Therefore, some English teaching academies are promoting E-Learning model or home tutoring. This shows that many businesses are making adjustments to become consistent with the psychology and behaviour of customers by launching new products and services. These moves will take time and resources (budgets, personnel, etc.) to grow, but can support businesses increase their ability to survive in these tough conditions.
- Standardize and upgrade processes/systems: Many businesses choose this less busy time to standardize processes and help the system work more methodically, closely and effectively. The move also assists companies to strengthen their resistance to the challenges that will take place. Deploying communication systems, project management, and data storage in the cloud so that work can still progress well even in cases where people can not attend physically in the office to work. This platform also creates a lever for the company to expand more quickly to other internal and external regions or territories in the future without incurring significant infrastructure costs.
- Closely monitor the cash flow: At present, any business owners must pay close attention to the company’s cash flow and prepare different handling options for possible cases. This is extremely important and necessary, especially when no one can predict exactly when the disease will pass, and how long companies can keep defending.
#3. Marketing’s role in attempts to help enterprises overcome this difficulty
This is the time when Marketing more clearly demonstrates its role. Instead of just focusing on communication, increasing brand awareness, or creating new leads for sales. Marketing personnel need to take on other important responsibilities. We can use the 7P model to analyze these roles.
- Product: The most obvious thing that can be seen now is that user behaviour and psychology have changed. Enterprises must launch alternative and more appropriate products and services. For example, the psychological fear of getting infected and not wanting to go to offline events motivates businesses to offer products or services online. Or the fact that children stay home from school for too long can make it difficult for parents to keep and teach their children at home will be the premise for businesses to offer practical support solutions. Instead of “selling everything”, the marketing team needs to understand the psychology and user behaviour and create appropriate products/services from the core competencies of their company.
- Price: The selling price needs to be suitable for the customers’ spending ability and ensure the desired profit margin. Furthermore, firms need to show customers that the specific value that the new product/service they provide is worth the money they spend through product packaging and communication.
Place: In the current context, the best solution is to exploit interactive channels and sell goods online such as omnichannel, or to provide products and services at home.
- Promotion: Communication activities need to both help target customers understand the value of products/services of the business, and show the interest and specific actions that the company is currently implementing to protect and care for customers. Besides, businesses can offer attractive promotions, accept reduced profits in a short time to have sales and cash flow protection. Moreover, if your corporate marketing and communications activities previously consisted of organizing offline activities such as conferences or workshops, then it’s time to try other methods like Livestream or Webinar.
- People: The team involved in the marketing, sales, and customer care processes should be trained to deliver messages regarding customer protection during the epidemic. They are also role models in applying some preventive measures, such as wearing masks and washing their hands often at work.
- Process: How to better distribute your products and services in the current context? If customers had to go directly to the store to buy products in the past, now, home delivery would be more convenient. The problem now will be to shorten the time to communicate and provide services/products but still ensure the quality of service. Applying technology to automate part of the whole process will help businesses save costs and create convenience for users.
- Physical evidence: Enterprises have to find ways for tangible evidence to gain trust from customers. Some simple ways to do this are to place notice boards, hand sanitizers, and masks in the store/sales office. In case businesses need to reduce losses by temporarily move to via online transactions, the marketing team needs to advise the business owner, as well as communicate these changes to customers.
Empirically, all of these changes are entirely within the capabilities of the business and are obligated to do if you don’t want your business to dramatically fall. What business owners and marketing teams need to do is to get rid of the thinking that marketing is to run ads, post on Facebook, do SEO, or to generate leads for sales consulting and sales and then frankly sharing, discussing the company’s situation, and setting common strategic goals for everyone to research and find solutions together. Because in the end, marketing, in a simple way, is to understand consumers, create products/services that can bring practical value, and find ways to bring these values to buyers in return to sales for the company.
Besides, the marketing team can better promote its role by helping businesses optimize costs. According to the Pareto principle, 80% of the results are brought about by 20% of the effort. Instead of busy doing a lot of activities, the marketing team should take the time to revise the expenses that have been spent, determine the specific contribution of each activity to the process of branding, making leads, and selling line. Then set the priority of these activities, and have a plan to cut depending on the financial capacity and strategic goals of the company.
For businesses that are not too difficult, this is also the time for them to think about ways to strengthen the resistance on the marketing front. One of the observations is that businesses rely heavily on paid media, especially Facebook and Google Ads. This is also very easy to understand because immediately see the results brought back just by spending money. But it will not be hard to realize that the efficiency brought back from these channels is decreasing. Price per leads (CPL) is increasing. And once the ads are off, they immediately lose sales. This is a very bad habit for the health of businesses.
The advice is that after having a relatively good sales source and proving that your product/service and messaging are effective. Invest in inbound marketing activities such as sharing useful content and optimizing your site’s ranking on search engines (SEO) for relevant keywords. Through these content and outreach channels, companies can gradually build trust in potential individuals and convert them into customers naturally. This strategy takes time to develop. But the investment efficiency will be higher than advertising. Hubspot statistics that the cost for a lead from inbound activities is only about 1/3 compared to outbound activities. And even if the ads have to be turned off in the current difficult conditions, businesses can still get potential customers to sell.
The COVID-19 ‘tsunami’ is having many negative effects on both our lives and our businesses. To survive, business owners have been implementing and should implement cost optimization activities, improve products/services to suit consumers’ psychology and behaviour, standardize and upgrade processes and closely monitor the cash flow. This is also the time for the marketing team to better express their role and value in the business by thinking beyond the ordinary media activities, keeping an eye on the effectiveness of marketing expenditures and finding ways to reduce dependence on paid media through inbound marketing activities.
In danger (risk) there is an opportunity (chance). This Covid-19 outbreak is a time for businesses to optimize and improve the system’s capacity as well as strengthen their resistance to future challenges. Desirously, the business owners and partners in charge of marketing roles will maintain their faith, overcome difficulties, and grow stronger after the epidemic is over.