In this episode of The Virtual CMO podcast, your host Eric Dickmann discusses a recent research report by LemonLight Media on how the COVID-19 pandemic is affecting the marketing efforts of businesses across industries. We will discuss the impacts to:
Keep up-to-date with the latest blog articles at https://fiveechelon.com/blog
For more information about Virtual CMO's, visit The Five Echelon Group at https://fiveechelon.com
For a transcript of today's podcast and links to the research report, visit https://fiveechelon.com/the-virtual-cmo-podcast-s1e6/
Season 1, Episode 6
In this episode of The Virtual CMO podcast, your host Eric Dickmann discusses a recent research report by LemonLight Media on how the COVID-19 pandemic is affecting the marketing efforts of businesses across industries. We will discuss the impacts to:
Keep up-to-date with the latest blog articles at https://fiveechelon.com/blog
For more information about Virtual CMO's, visit The Five Echelon Group at https://fiveechelon.com
For a transcript of today's podcast and links to the research report, visit https://fiveechelon.com/the-virtual-cmo-podcast-s1e6/
Season 1, Episode 6
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Hello, and welcome to the virtual CMO podcast. I'm your host, Eric Dickmann. Here on the virtual CMO podcast, we strive to unlock the best marketing practices for small and mid-sized businesses. We share strategies and tactics from fellow marketing professionals and provide practical advice that you can use to impact your company’s marketing trajectory if you're new to the show, welcome! Each week, our goal is to improve the value of content shared here. I hope you'll join us on this journey and become a subscriber to this podcast through your podcast player of choice. Our primary mission here on the virtual CMO podcast is to pass along insight and have meaningful conversations on topics of interest to marketing professionals. If you have questions, there's a link in the show notes to provide feedback or guest inquiries. Now let's get on with today's show. Well, hello everyone, and welcome again to episode six of the Virtual CMO podcast. I'm really glad you're here with us today. Wow, what a crazy world we're living in. I think you know everything has been impacted by this pandemic, and as each passing week goes by, I think we're all learning to live with it just a little bit differently. But one thing is certain; reality has changed. As we begin to talk about opening up the economy, as we begin to talk about going back to work, things were going to be different. There are going to be some significant changes when this economy starts to reopen. I think the real challenge for many of us is that this is uncharted territory. Nobody knows for sure what's going to work and what isn't going to work. I think that there is a misperception among some that when the economy starts to reopen, that it's almost going to be like flipping a switch and that things are going to get back to normal. I think that's completely untrue. First of all, it just doesn't work that way. There too many things that are interconnected in this economy, and to get things started back up, one thing needs to proceed another, which needs to proceed another. And so there's sequencing to this, and I think getting that sequencing right is going to be incredibly difficult. Some businesses should have an easier time starting up that has less complicated supply chains. But others are going to struggle, and I think it remains to be seen how this is all going to play out. As marketing professionals, we have to be aware of this. We have to be aware that our world is going to be changing, and we need to be thinking about what do we need to do to prepare for that? I think one of the things that I worry about the most is that in this time of uncertainty, when many businesses are furloughing employees, many retail establishments have shut their doors, we are in a situation where business owners and executives are looking at cost savings. They're looking at what can they do to save money? Certainly, many have applied for the various loans that are available to small businesses, grants, and paycheck protection, etcetera. But they're also going to be looking at further expense reduction. And unfortunately, marketing is a prime target for that. And I'm not saying that marketing budgets should stay at the levels that they were before this pandemic hit. I think you have to be smart about it, and if there's not a lot of money out there for businesses and consumers to start purchasing goods and services, it doesn't make sense to spend that the levels that you were spending. But I think there is a tremendous body of research out there that shows that businesses that invest in marketing during downturns do better as the downturn goes back upward. It's very important that you continue to have a presence now. You may need to adjust some things you may need to adjust the products that you focus on. You may need to adjust the segments that you're going after, but cutting out marketing from your mix, I think, is an extremely dangerous proposition for many businesses because, let's face it, marketing is the engine that drives business. It drives revenue, it drives growth, and especially when businesses are short of cash when they're looking for sales when they're looking to try to beef up their revenue, they're going to need marketing to lead the way. They're going to need marketing to fuel that engine of growth, so I think it's extremely important. But we are in a challenging time, and there are a lot of issues that are facing companies and marketing departments so today. What I wanted to do on the podcast is, let's not focus on the negative. Let's focus on what we can do about it. And right now, I want to look at the situation at hand what a lot of companies are dealing with, and the decisions that may need to be made. There was some research done recently by a partner of ours, and they were able to survey about 300 clients to get a sense of what's going on inside those firms. What are they thinking in terms of their overall marketing strategy? And I want to share those results today, and I will put a link in the show notes so that you can get the full research paper. It's got some pretty interesting insights in there. But the focus of today's podcast is what marketing challenges are you struggling with most right now? When we look at what marketing challenges you are struggling with most right now, it's very interesting to see what the responses are. Some of them, I think, is very predictable. Others, I would say I was a bit surprised that they ranked as highly as they did. Just to give you a little bit of background, this was about 300 companies that were surveyed. They were across multiple industries, multiple size categories. So while not a huge sampling, I think it's representative enough to give us a little bit of a feel for what's going on in the marketplace right now. I would also say that as I read off these percentages, you could select multiple answers, so these add up to be more than 100% because they could select all that applied in their particular circumstances. But I wanted to drill down into each one of these and talk about these a bit further because I do think it gives a good sense of where people's heads are right now in terms of marketing spend. The number one answer, by a fairly significant margin, about 42% selected that we have temporarily or permanently paused our marketing budget. And you know, this is surprising to no one, right? In this pandemic, where customer buying behavior has changed tremendously, it makes sense to pause or at least slow down your marketing spend. We have to figure out what's going on. We have to figure out where our customers are. We have to figure out what people are willing to spend money on right now. And, there certainly are a few hot pockets of interest right now. I've seen some earnings reports where they said, cloud computing sales have been very strong as people are working remotely, as are tools that support remote work on laptops or tablets. Those kinds of products have been doing very well in this environment, and we've seen grocery stores and chains like Target, Wal-Mart, and Costco report steady growth. But at the same time, they are also reporting things like higher ticket items TVs, jewelry, and appliances, those are the things they tend to make their margins on, and those things aren't selling well at all. So even with businesses that are doing well in some segments, they're not doing well in others as people's buying patterns have changed. As a marketer, it makes sense to pause or to at least slow down your spending as you figure out what's going on in the economy. What's your customer looking for? Especially as the economy starts to open. Now, the risk is if you wait too long, then competitors can get the jump on you, and you might not have the mind share that you would have if you were prepared. Now is a good time to start putting some campaigns in place, and to start preparing for this reopening and what that might look like. But it's probably also a good time to go a little easy on your marketing spend. We've talked in previous podcasts about the whole idea of being empathetic, of really putting a message out there in the marketplace that shows you understand what your customers are going through. That you understand that this is a unique situation and that they may be struggling, just like you might be struggling in your business. And over the last two weeks, I have detected a change in tone in a lot of advertising. Many companies are now using this more empathetic pitch in their marketing, especially on television, as they try to talk to consumers and recognize the fact that people are hurting, that people need assistance, that people are probably not ready to be making some large purchases right now, and I think this is good. At the same time, I do wonder if we're going to risk a sort of empathy overload, where everybody is talking about COVID in some way, where they're trying to express empathy. And while that's appreciated, it's almost like everybody just keeps talking about it, and there's some fatigue starting to set in. So even an empathetic message may start to become a harder sell in the coming weeks as people just get fatigued. We will see. So number one, putting a pause on your marketing budget. The second choice, and this came in at about 36%, was our pre-planned marketing efforts are no longer relevant, so these would be things like events or content that had been delivered previously and that these companies felt like they needed to pivot. Again, this one should come as no big surprise. Companies that maybe had a strategy where they were going to trade shows, or they were doing some virtual events or Web seminars on previously planned content, might find that that content is no longer relevant, and they've had to put it on the shelf. Trade shows have been canceled. Opportunities to travel, you know, for things like executive seminars and so forth, all of that has been put on hold. It makes sense that people's plans are in shambles as they try to restructure for the current environment. And I think these top two answers go hand in hand. If you've got a marketing plan that's in shambles, you certainly are going to put a pause on your budget because a lot of those pre-planned activities no longer makes sense. The good thing is, if you've created some quality content, there will be life for that content down the road. It's just that maybe other things are needed right now. One of the interesting things that came out of this survey as well is what people were looking for in terms of approaches that they found successful. Email still ranked at the top of the list, they said. Email was the chosen way to communicate with their customers, and things like Web seminars were fairly far down the list. And this makes sense in some ways because I know for myself, every day I'm getting messages from various companies because they're offering some online training. They're offering zoom calls, Web seminars, or whatnot, and it's great. There's a lot of really thoughtful content that's being put out there, but I think some fatigue is setting in as well. When people are sitting at home on their computers, they're doing these video conferences all day long with their colleagues. Then they've also got these Web seminars or web conferences to go to; I think there gets to be a point where it just chews up so much of your time that people get tired of it. So it’s an important way of reaching your customers, but you also want to think about what else is going on in the marketplace right now, and there's a lot of that style of content going out there right now. Email is proving to be fairly successful as well as on-demand video. If you've got YouTube videos up or video on other platforms, people tend to like short videos that they can consume in small gaps during their day. I think those perform very well as opposed to the long commitments for Web seminar. It’s something to think about in terms of what content you've got. You know, once we dropped past these first two reasons, things get a little less clear cut. About 16% of people said that they weren't sure which marketing costs to cut and where to continue investing. This matches up very well with what we were saying earlier. It's tough right now. Patterns are unclear. This is uncharted territory. We don't know what's going to work and what's not going to work going forward. So at this point, it's hard to know exactly where to reallocate those funds. I think it's going to take a little data coming in to get a firmer picture of what tactics are going to be working. I've been advising clients unless you're in a very specific industry, I would not be focusing on big-ticket items right now. I'd be focusing on smaller wins, smaller opportunities to build relationships with existing customers, or going after new customers. But I wouldn't be going after those whale-sized deals. Not at all. I think that's it’s going to be very challenging, except in very specific segments. I also think that people want to understand that you're a trusted partner. There's going to be a lot of uncertainty cos they're going to be on the verge in some industries of staying in business or going out of business. I think people want to see that you're going to be a trusted supplier, that you're going to be a trusted vendor, that you're going to be a partner to these various customers, and be empathetic to them as well. In terms of how you do business, customer service is going to be important. People are going be edgy, and so there are opportunities to reallocate marketing dollars towards programs that will support those kinds of activities. And that's certainly where I would start. Then as we start to get data from various marketing activities, we can start to see what's working well and what's not working and begin to pivot. But I think that you know, we want to dip our toes in the water, not plunge headfirst. Unless in your particular segment, you see a massive opportunity and some of those they may open up. We may have some significant competitors that go under, and in that case, you may want to aggressively go after their customer base. But I don't think that’s going to happen immediately in most segments. It’s going to be dipping our toes in the water to try to figure out what's the next best thing to do. The next one on this list was our audience is engaging less with our content or brand. So again, this was at about 15%, and I think this is to be expected as well. People are sitting at home, they're getting a lot of messages, and I think they're starting to engage a lot more with things that are coming. If you're sitting at home all day, you’re probably a little bit more tempted to open up those emails or watch those YouTube videos or click on that Weblink, because you tend to have a little bit more time on your hands. I saw some stats from HubSpot the other day that said their email open rates were going up, and I think that makes a lot of sense given the environment. I know for myself, I've been opening more emails than I had been in the past just because I've got a little bit more time. But if you're also not buying as much, then the engagement with any particular brand will be going to go down. I'm sure that there are a lot of consumer focus businesses where promotions are coming out nearly every day from some of these brands, and yet people aren't buying. I saw a statistic yesterday that they were asking what people have done with their stimulus checks, and by far, the biggest answer was that people had taken these stimulus checks and put them into savings, which I think makes a lot of sense. If you don't know how long this is going to last. If you don't know how this opening up of the economy is going work. You want a little bit of a cushion. You want to put that money aside. You're not running out to buy a new pair of shoes. And so even though that is stimulus money, I think given the fact that this has been protracted, people are afraid to spend just yet. They want to know that their jobs are safe, that their companies are opening back up, and that the economy is starting to get moving. Then, if that money is still left, I think you'll see it being spent. But for now, I think people are holding on to it, so I'm not a bit surprised at that answer. The next one was managing, and working with my team remotely has been more challenging than I expected. And again, this isn't overly surprising as well. That was also at 15%, and I think that for a lot of companies who have not fully embraced remote work, having it thrust upon them the way that it was left them ill-prepared. So all of a sudden, companies had employees that were dispersed over town, all over the country, or geographically, now suddenly had to figure out ways of collaborating, and managers had to figure out how to manage these remote teams. If they tried to do it the way that it works inside an office, they were going to be very disappointed with the results. It takes a different management style, and it takes a different way of employees managing their time and managing their day. If you were are a person who has children, for example, and all of a sudden you're thrust into your kids not being in school, and you have to work from home, there's a lot more chaos probably around your house than you're used to working in the office. Trying to figure out how to manage your day, manage interaction with other employees and manage interaction with your boss, that's challenging, and it takes a little while for people to figure all that out. If you've watched the news and you've seen a lot of these anchors working remotely inside their homes, you've seen them shuffling around. Where they put the camera, fixing their lights, and moving plants in the background. It takes a while to create an environment that you're comfortable in. But what I have seen is that over the last couple of weeks especially, it seems like people are settling into a routine. They're now becoming more accustomed to working from home, and I think as employees get more used to it, managers will also get more used to managing teams remotely. It's going to be very interesting to see how this plays out over the long-term. My hope is that more companies will embrace remote work, and we will have a surge of new opportunities in remote work. Because let's face it, the need for people to commute into a cubicle filled office oftentimes isn't really a requirement. If you’re a business who can figure out how to successfully manage remote work, I think that's going be a huge win for you. Because if social distancing continues over the summer, we may be looking at situations where only half the office is called in at any given time. Maybe it's staggered shifts. Maybe you've got three shifts during the day to keep the number of people inside a building to a minimum. And if companies can figure out how to work remotely on an ongoing basis, I think it's going to dramatically change the shape of business for the better. I think there are a lot of unnecessary costs and stresses that are put on people because of the need to go into an office. Moving down the list at 11% we have, we haven't seen much of an impact from COVID-19, so we're continuing our usual strategy. There's always going be a certain percentage of businesses and industries that look at these opportunities or look at these kinds of situations as opportunities. And I think that's reflected in this statistic. It's only about 10% of the respondents, so that's great. It will be interesting to see if they look that same survey a year from now. If they feel the same way, or if there was just a delay in them feeling the effects of COVID on their business. Or maybe they're in one of those unique sectors that have been helped or are seeing a positive result from the change in business behavior, and that is the last question. Is our demand is outpacing our internal resource? And that was at 8.7%. So these are companies that are doing well. I will tell you that some of those respondents were in the health care sector, they were in the construction sector, and they see an increase in their business. I look around, and I see a lot of activity on construction sites, and obviously, hospitals and health care facilities have been very busy. So all in all, an interesting survey. We've got a lot of businesses that have found their marketing paused. We have a lot of businesses that have found that a lot of their pre-planned work, their pre-planned content is no longer relevant and are wondering what to do. And they're seriously wondering where to invest their next dollars. How are they going to ramp up their marketing efforts as the economy starts to reopen? In the coming weeks, we want to talk to more of you about these kinds of challenges. We want to hear what's going on in your organization because this certainly is going to be a unique situation. As companies look to reopen, it's not going to be easy. I hope that you'll come back next week as we continue this discussion as we focus more on getting businesses to reopen. If you'd like to learn more, there's information in the show notes. I've got some links in there. I also write regularly on my company's blog at The Five Echelon Group. I hope you'll check out some of the blog articles there. That will do it for today. I hope to see you again next week.