Opportunities in times of crisis

The financial crisis is starting to impact the everyday consumer habits and behaviours. We have moved out of the crisis of confidence into a crisis of reality.

Nor are we seeing the crisis isolated to specific sectors, such as financial services, or segments like stock market investors. We are now seeing impact across all sectors and all segments. 

We can look at the economic crisis one massive delta moment - a moment of truth that has caused consumers to reassess their existing rules and "auto-pilot" habits.  Those rules and habits no longer apply and consumers are changing them now.  The decision making processes for consumers will be shifting. 

This cuts across brand choice, product choice and needs, discretionary spending, product needs, and media consumption.

Those brands that move with the consumers will fair better than those that move in a different direction.  Understanding the new mindset of consumers is the first and most critical step in managing the brand out of the crisis.

For marketers there are several opportunities presented by the crisis:

Brand choice: Most A&P budgets will have been slashed already. But there are many other ways to invest in the brand and keep it present in the market, and more importantly strong with your current customers. Think not about brand promotion, but brand experience. What are the critical brand touch points outside of the traditional above the line activity? Review your brand touch point pathway and seek the opportunities to invest in and build the brand through those that are currently present, rather than trying to create more through advertising. Now is an ideal time to look to word-of-mouth marketing strategies driven through positive brand experiences.

Product choice and needs: Price and promotion has always been a key factor in direct response (product) marketing, particularly in Hong Kong. It will remain a factor, and is more so considered now, but don't rely solely on price. Understand the product relationship your customers hold, and reinforce that through your brand experience strategy. What is the higher level gratification they seek from your product beyond the immediate needs, and how do you ensure that is reinforced each time in a consistent way. Ensure you don't provide an opportunity for the customer to try or consider another product. Be defensive of your share, as well as seeking to grow share from competitors. Look to use this period for innovation. Sometimes a crisis brings the best out of us - the supermarket, chocolate chip cookie, Laundromat where all invented or developed during the Great Depression. Think how you can look to customers' new habits and needs to change your service model or product design. Utilise the time for ideation and co-design with your customers.

Discretionary spending: Spending habits and use of discretionary income is changing. We are seeing more conservative behaviours emerging, such as saving cash rather than spending and cutting back on the nice to haves like travel and new clothes. A focus on value, customer relationships and loyalty will ensure a greater share of that discretionary spending for your brand. If there is ever a time to demonstrate loyalty to customers, now is it. But don't wait for your customers to make the first move. Loyalty is a dance. Someone needs to take to the first step. Making a customer do something to get a loyalty bonus is a bribe - giving a customer something for something they have already done is a reward. Take the first step in the dance of loyalty.

Media consumption: Out of home and at home habits are changing, impacting on the opportunities to see. Reviewing media consumption habits and understanding the change in reach and frequency will be critical to effective media planning. People are going out less, and staying home more. There's more use of public transport, less of taxis. These behaviour changes will impact on the reach and frequency patterns of consumers.

We are seeing consumers adapting to the new world, post economic slowdown already.  No one can foresee when the normal state will return and if it will ever be the same again. 

Those brands that aren't looking to adapt their marketing strategies across understanding consumers, generating new insights, adapting their brand and product strategies or looking to alter the traditional marketing models and create a new approach to marketing are likely to suffer more so than those that do.

Look to differentiating strategies for differentiation.  If you are doing the same research in the same way, and planning marketing strategies with the same understanding, and managing products and promotions with the same tools, then it's unlikely you will adapt to the new market. 

Like Charles Darwin said, it's not the fittest that survive, it's those that are most adaptable to change that survive.