With the Coronavirus (Covid-19) sparking consumers to raid their local retailer’s toilet paper and hand sanitizer supplies, many marketers are beginning to give their marketing plans a second look. The problem for promotional marketers is that if the economic volatility continues, it is unlikely they will meet their brand’s sales goals. Due to the impact of the Coronavirus, consumer behavior has changed, and marketers need to reconsider their 2020 plans based on the evidence they are seeing in the market.
As we have talked to our clients, below are some of the recommendations that we are making to react to these turbulent times.
- Expect customers to use online channels more – Marketers should learn lessons from reports in Asia that consumers are going to dive hard into online ordering and replacing store visits with the delivery of goods. This impacts more than restaurants and retailers; manufacturers should be beefing up their direct to consumer channels as consumers will not be in-store browsing big-box retailers like they have in the past.
- Marketing budgets will be impacted – During the last recession, marketers quickly saw budgets slashed and leadership asking for marketing departments to do more with less. Promotional budgets will likely be impacted if the crisis continues. Marketers should relook at cost-effective, proven marketing tactics that conserve marketing spend like rebates and direct marketing.
- Focus on retention – While new customer acquisition has been the leading driver during the long economic expansion, a shift to retaining the customers that have already been won may become the strategic focus for many promotional marketers. Establishing a pulse of customer appreciation events and promotions is a great way to engage current customers and reward them for their loyalty versus expensive monolithic loyalty programs.
- Think about reward choice – Rewards are always an important consideration for promotional marketers, but rethinking which rewards you plan to use in upcoming promotions is the first step to take. Rewards that drove consumers to large gatherings like concerts and festivals should be avoided for the next couple of months. Additionally, with more restrictions being put on travel, destination events should be avoided.
- Reconsider the timing of your promotion – At this point, we are recommending all promotions scheduled to be launched in the next three months be evaluated based on the current conditions, and contingency planning should be put in place for promotions three to six months out. You should also expect your marketing goals and objectives to change in the second half of 2020 as we exit the pandemic.
Crises like the Coronavirus should be taken seriously and people across the world are taking precautions and planning. Promotional marketers should take similar steps to react to the challenges that are sure to arise in their businesses.
Todd Carter is the Chief Digital Officer at YA. YA works with companies to build incentive programs that deliver ROI.