After a fairly rocky course through 2020, spirits seemed to lift over the past week when the presidential election news from the U.S. hit the headlines. In addition, speculative rumours of an imminent vaccine sent positive waves throughout the global markets. With the UK now two weeks into the second lockdown, somehow the mood seems a little lighter. Both mums and dads alike greet each other in the park with the widely used phrase ‘we are thankful that the schools remain open’. The disappointment and frustration felt earlier on in the year has turned into appreciation for what we do have, rather than dwelling on what we don’t have. Our family and friendship bubbles, the ability to travel out to the countryside for exercise and the time to relax into our hobbies and homes. The worries seem to have eased slightly as the reality of not being able to plan anything for a few months has set in.
Plans evaporating in our personal life are a disappointment. It feels manageable though to wait or adapt when it comes to organising holidays or birthday celebrations. The real struggle comes with visiting loved ones who are unwell or in care, or going through the painful process of organising a funeral at a time when few people can be present to say goodbye. 2020 is a real mixture of difficult emotions and a renewed openness to share in it. Our traditional ‘stiff upper lip’ Britishness has softened somewhat in a short space of time.
Waiting on the new restrictions to decide who we can invite to Christmas Day lunch or where we will spend New Year are minor inconveniences. For a business owner, not being able to predict sales and turnover over the next year is far more concerning. Business management strategy and planning is usually based largely on reflecting back on what has happened in previous years and then extrapolating those figures with minor adjustments for any new trends. It’s guesswork to some extent under normal circumstances, yet this year for some markets it is proving to be an impossible challenge.
Some industries and organisations who have repurposed their offerings are thriving under the circumstances. We learnt last week that the sales of comfort foods such as custard and gravy are up, with Premier Foods reporting a 50% increase in profits in the six month period up to September*. Back in the spring, Britons bought 60% more bikes than usual and business for cycling cafes and bike shops is booming**.
Most sectors however are really feeling the pinch and in September were faced with the agonising process of reassessing their overheads as pressure on cashflow increased. The message coming through from Accountants and Financial Advisors is the same in every period of economic downturn – do whatever you can to cut costs. Every line of the spreadsheet is scrutinised. Creating a leaner organisation is painful, yet a necessary activity and there is a lot to learn from carrying out this activity regularly to maintain a healthy business - on a practical, best business practise level. On an emotional level, it places the decision-maker under considerable stress. Particularly when it comes to reduce staffing costs just a few months before Christmas. It changes personal relationships and invokes feelings of guilt and personal failure.
Funds allocated to Marketing are emotionally far easier to cut. It is often one of the hardest budgets to measure and so often the immediate short-term financial gains far overshadow the long-term impact on sales. When a mind is clouded by the difficulties of staff redundancy, stopping the Marketing activity can feel like the right and often moral move. For example, the line of thinking may be ‘How can I shout about my brand, when I am losing three of my most loyal team members?’
The irony of the situation is that pragmatically and logically speaking, Marketing is the exact activity a business owner needs to invest in, if they are to continue to stay in business and survive a challenging period. The Marketing strategy will need to be adjusted and the product or service proposition is likely to need repositioning too. For many business owners, particularly in retail, this is time to revaluate their online offering. Having a strong digital presence with an easy-to-navigate customer journey during this period of lockdown is essential. Brand perception and staying front-of-mind with your audience is key, therefore placing the brakes on regular Marketing communications simply places competitors in a stronger position and potentially sends out a message to customers and prospects of scaling back operations or even ‘shutting up shop’.
When looking at the Marketing budget figure as a line in a spreadsheet, it is often tricky to break it down and establish which spend is working and knowing where the return on investment is. This is even harder to navigate when there is so much change going on in the market. Survival and success through this pandemic will come to those who revaluate their spend as opposed to completely cutting their spend. Those forward-thinking leaders who are able to adapt, evolve and invest in their future trading opportunities under these hugely challenging circumstances.
Deciding how to allocate a limited Marketing budget is not an easy task and it often helps to gain a new perspective. Please get in touch with our team if you are revaluating your strategy or looking to generate more leads over the coming months. We would be happy to help.
* Source: BBC News
** Source: The Guardian