It’s a classic example of cause and effect— when major events occur, there is always an economic consequence. Global pandemics. Acts of terrorism. War. Natural disasters. History has shown, when one country experiences a significant event, it leads to some degree of economic downturn, often a global recession. COVID-19 is no exception.
It’s only natural that uncertainty creates public fear, consumer trepidation, and conservative spending behavior. With fewer dollars in the economy, business suffers and an economic downturn is inevitable. Forbes predicted the ramification of COVID-19 would lead to a worldwide rolling recession, and based on our current headlines, we’re well on our way.
What we’ve seen so far— the cancellation of major industry events, restrictions on air travel, closures of schools and daycare, sporting events canceled and entire seasons put on hold, stock market volatility— organizations around the world are feeling the consequences with no industry exempt. We’re all impacted and now is the time to rally your team, prepare for what’s ahead, and seize the opportunities that are subtly around us.
A Leadership Response to Adverse Conditions
Immediately following a major event, the natural reaction is to batten down the hatches and trim the fat— budget cuts, reductions in marketing, hiring freezes, even layoffs. But research has shown, making deep cuts and reacting defensively can actually harm your company’s ability to recover when the economy begins to rebound.
A more positive response is to assess and take control of the situation, much like Taiwan’s response to the COVID-19 threat. With what was predicted to be a hard-hit region for coronavirus, Taiwan, the island state of 24 million people, has had only 50 confirmed cases.
Rather than make reactionary decisions out of panic or fear or delay actions until the crisis hit, Taiwan’s leaders immediately identified areas of vulnerability and took calculated measures to control the situation, implementing 124 safety measures over a 2-month period.
The government’s actions went well beyond border control, tapping into educational outreach, program infrastructure, and data analytics to protect its citizens from looming danger. As marketing leaders, we need to do the same.
The Responsibilities of Marketing Leaders
Simply cutting budgets may help you to survive if sales should temporarily slow, but won’t help you to thrive in a new economy. HBR research studied the actions of 4,700 organizations during the recessions of 1980, 1990, and 2000, and firms that were quick to make deep budget cuts didn’t necessarily come out ahead.
In fact, they had the lowest probability (21%) of gaining a competitive advantage when conditions improved. Bottom line: you can’t cut your way out of a downturn; you must take proactive measures to offset the impact, just as Taiwan did with the coronavirus.
What does this mean for your marketing operations?
Plan for Workload Fluctuations
The ripple effect of COVID-19 is impacting every industry sector— but in different ways. Some organizations are experiencing business surges and can’t keep up with the sudden spikes, while other businesses are experiencing a decline in activity.
Expect the volatile conditions to continue for an extended period— especially since no one can predict the severity of the pandemic, how long our world will be under a social quarantine, and what the economy will look like when it’s all over. According to Forbes, global recovery will likely occur in rolling stages. Covering your marketing operations needs may be tricky; hiring during unstable economic conditions is risky, for you and the employee.
Workload may pick up, then subside. Hiring at the wrong time can prove to be costly for the organization at a time when every dollar matters. This is where outside resources provide immense value.
While agencies may initially sound like an expensive option, you likely won’t hire an agency full time, and, the added flexibility in work schedule without the risk of downtime will more than offset a higher hourly rate.
Focus on Strategy
Savvy organizations will use a slower time to assess the direction of their marketing operations, their team’s efficiency and output, and plan for future growth. Legacy processes designed years ago without regard to current staffing, technology or volume should be challenged and workflows streamlined.
Special projects that have been put on hold indefinitely may now come to life. Efficient marketing operations teams will give their companies a competitive advantage when the economy rebounds as costs will remain low as demand picks up.
The organizations that use this time now to invest in their marketing operations strategy will emerge as frontrunners now and when business returns to normal.
Mine your Data
Just as Taiwan mitigated the outbreak of coronavirus by using data from prior epidemics, so will marketing leaders use data analytics to improve marketing outcomes. Leaders who aren’t using multi-touch attribution will start; others will advance their capabilities to reallocate budget spend, improving ROI and maximizing closed/won sales potential.
Leveraging customer data will also be front and center, integrating technologies to transform the user experience across business units and field offices. An economic slowdown is a perfect time to reimagine your organization’s customer experience— and marketing operations is at the nucleus of data to support.
Next Steps Amidst the Uncertainty
Stanford economist Paul Romer said it best, “A crisis is a terrible thing to waste.”
We have a choice: we can wait and see how the unknowns will pan out, or, we can proactively assess and take control of the situation. Without a doubt, the organizations that do the latter will be the ones thriving in our new economy.