Drs Omar Merlo and Andreas Eisingerich, Academic Directors of the online MSc Strategic Marketing programme at Imperial College Business School, give four tips on how businesses can connect effectively with their customer base during the pandemic.
The coronavirus (COVID-19) has had a dramatic impact on virtually every single business globally. Customers have adapted what they are looking for from companies, many have less disposable income to spend on brands, and some have placed greater emphasis on products they may not have seen as a necessity before. Meanwhile, many companies have had to tighten their budgets to survive, including their marketing expenditure.
Although what customers want from their brands might have shifted, the fundamental requirement for businesses to create and communicate customer value remains unchanged. Companies must adapt their marketing messaging if they want to remain relevant in these changed conditions. The role of a marketer has never been more difficult. But companies must rise to the challenge of communicating with their customers in a way that reflects the times in which we live, and adapt this strategy as the crisis plays out, with a view to protecting their long-terms relationship with customers.
Here are four tips on how businesses can connect effectively with their customer base during the pandemic.
Understand changing customer needs
No customer is acting the same during COVID-19. Many are seeking low-cost alternatives to their preferred brands, or even not purchasing these products at all. Some have moved all their purchasing online. It is important for companies to do their market research and really understand how their customers’ needs have changed, which changes are likely to be temporary and which are likely to be permanent, and what opportunities they may be able to exploit, especially if it is a matter of survival.
Aligning the business strategy directly with customers’ needs by involving them directly in the market research effort is a wise idea. In 2008, during the great financial crisis, Starbucks launched its “My Starbucks Idea” platform, allowing customers to share and debate suggestions about how the company could improve its service and product offerings. Customer participation initiatives like this can not only be great sources of customer insights, but can also increase customer loyalty by strengthening the psychological bond between customers and the brand at a time when it’s most needed.
Develop a response strategy
Once you know how your customers’ needs have changed, develop a response strategy. A good strategy could simply reinforce the attributes that made the brand successful and appealing to customers in the first place. During a crisis, it is important to strengthen and protect the emotional bond that customers have with your brand, encourage them to stay loyal, and protect your main sources of brand equity. Deliveroo, for example, introduced contactless delivery very early on to ensure customers could continue to experience the delivery service but with social distancing in place.
In some cases, brands may also need to look for new ways to engage customers to remain relevant. Considering a lower-cost alternative product to their current ones (potentially even marketed under a different name to avoid direct competition with current products) can be a good way to minimise fluctuations in cash flow. Failing that, if a company has seen a drop in sales, then promotions, flexible terms, and price cuts can be useful to stimulate demand. However, these should only be used if they are consistent with the long-term brand positioning. Overall, short-terms sales volume and revenue should always be balanced wisely against long-term brand strength.
Whether by reinforcing existing brand elements or highlighting new ones, what matters most is that brands continue to connect with customers in a relevant way during these difficult times. Brands that go quiet when times are tough and dramatically cut advertising spending will find it more difficult to bounce back after the pandemic, and may experience a long-term drop in brand performance, market share, and profitability.
Be considerate and useful
It’s understandable that many companies are doing virtually everything they need to survive, but now is not the time to be too aggressive in the face of adversity. It’s important that brands continue to advertise, of course, but it’s also important that they sense-check their advertising messages so that they don’t come across as insensitive or exploitative in the current context. A health insurance company using images of empty toilet paper shelves to urge customers to be prepared for anything was probably not the wisest piece of advertising. In contrast, KFC’s removal of their famous “It’s finger-lickin good” slogan was an excellent idea.
During this global crisis, not only do brands have to be sensitive, but they must have substance too, and try to be useful and relevant to their customer base. This can be achieved not only by communicating with them, but also by being visibly supportive and helpful. Nike, for example, launched its “play inside” campaign in order to promote the stay at home message for countries in lockdown. Importantly, Nike also reinforced that message by giving out free subscriptions to its Nike Training Club app and boosted its content marketing efforts to reach consumers in lockdown who want to be active indoors.
Uncertainty is rampant during this pandemic, and naturally consumers are worried. It’s vitally important that brands reassure their customers, and manage this uncertainty. In a recent study we found that brand transparency is a very effective way to curtail customer uncertainty and it can lead to increased customer trust, loyalty, and even willingness to pay.
The travel industry offers best, and worst, practice of this transparency. The tour operator Much Better Adventures was quick to communicate with customers in a way that reassured them, and built trust and loyalty, offering them the chance to cancel or postpone trips, along with a five per cent lifetime discount as an incentive to reschedule – the result being the majority of customers opting to postpone rather than cancel. On the other hand, Ryanair issued a rather nebulous statement advising that “customers who choose not to accept a free move or voucher will receive their refund in due course, once this crisis has passed”. Unsurprisingly, there was much customer outrage as a result.
Businesses should be reminded that crises are a great opportunity to establish loyalty, as consumers will evaluate a brand’s response and use it as a test of trust. Companies that rise to the challenge by adopting a customer-centric response strategy are more likely to emerge from the pandemic as winners.