It’s a Pandeconomic Recession. Time to Fully Stop Marketing?
I had just joined the Roomzilla team, ready to take on the world of office space & room management. It was an entirely new industry for me but one that has been growing for over a decade now. Sounds exciting right? Little did I know how exciting it would be as almost after I started, the pandemic lockdown hit which was followed shortly by the official announcement of the global economic recession. Personally, I’ve seen quite a bit in terms of unique situations. I co-founded a startup back in the US just around the dot.com bust, joined the iGaming industry just under a year before the biggest market, namely the USA, introduced an act to shut it down (wiping off anywhere between 80-90% of most company’s revenues in a day), and tried to raise money for a startup a month before the 2008 recession. One could sarcastically say, I was always good with timing. And a pandeconomic recession just when I joined a company that relies on people actually showing up to the office, workplace, or a physical place to interact … what are the odds? Saying all of that, I never saw any of it as something ridiculous as bad luck, I always saw it as invaluable experience and I have to say that this time around, I’m going to share it from a marketing perspective mainly, discussing why evermore now a calm & cool head, a strong and quickly executed strategy, and contingency plans are more important than ever before. Let’s begin …
There is Always Something Productive to Work On
Here at Roomzilla, it was refreshing to see that the team already saw this as a backup plan. This pandemic period was a perfect time to do some “housekeeping” in terms of catching up with internal initiatives and projects that perhaps there was no time for previously. We saw much of this resilience throughout the recession as companies changed how they operate or their focus to adapt to external factors with articles such as this Forbes one being an example of the current state of play but also media reminding us about other famous incidents like Inc.com.
At Roomzilla, we’re not a big company for whom a drastic strategic shift would make sense. We don’t have the ability to shift production into personal protective equipment (PPE) for example. So we used this period with what suits us best and gets us ready for the post pandemic era: taking this time to brainstorm more features, cleanup internal processes, doing our tool gap analysis, restructuring and planning marketing, getting more in depth with our customers & their behaviour / expectations while just in general experimenting frequently across how to best support our clients (as a team member will write about soon), introducing new approaches to converting new clients, along with discovering trends in our industry first hand from prospects and clients as my team member wrote here.
Let’s focus on marketing & growth.
“When times are good you should advertise, when times are bad you MUST advertise”
This classic adage holds true throughout each recession, there have been numerous studies as well and independent and expert lead opinions that show a recession can make or break a brand such as this article from Kantar. However, the key is what you must focus on in marketing (the MUST here). What I have to completely agree with is the reference to Mark Ritson’s recent article where the following 3 points that any experienced marketer can tell you are applicable:
- Your company must be financially able to fund an increase in spend.
- Your management team must believe that marketing is a long-term investment, not a short-term cost
- You need to not be sh**.
The popular response during such a period is to cut advertising & marketing budgets with no backing / thought behind it and weather the storm. If you are brands like Apple, Coke, or Nike well you may not suffer the brand decrease (in fact these companies will most likely continue to invest due to their budgets); however, how about the rest of us?
In Roomzilla’s case, it was pretty obvious from our top competitor’s marketing behaviour during March & April that they bought into the spend through a recession strategy. And it is no surprise that some of them fall into the first point above, they are financially able to fund an increase in spend, but does that mean that they should? Again a reminder, our industry actually relies on people showing up to a physical place of study, events, work, etc. Will Roomzilla’s brand position be lost while people are in quarantine, working from home? Sometimes, you don’t need data, just common sense. Marketing investment was performed in March and April but from a backend perspective. We brought on board a new customer marketing engagement tool, modified our content and website and restructured our performance campaigns, preparing a ready to go marketing launch strategy for when the defrosting begins.
That leads into point number two: stop thinking marketing = ONLY monetary investment … it requires time as well, not only in what was mentioned above but also in research and analysis. I spent a significant portion of my time studying the latest news, trends and commentary to build up enough of a confidence level in May being the time that not only economies start to defrosts but so does our marketing strategy and its launch. I always used to say to my colleagues and team members that a marketing professional should be part salesperson, part lawyer, part data scientist, part finance, and marketer of course in one. Some would nowadays add part coder but I have my opinions here which I can save for another day. Nevertheless this leads to point number 3. which deserves its own section …
You need not to be sh**
Getting through this recession requires traits mentioned earlier in the first paragraph as well at the ones just mentioned above. If your sales, marketing, and support team are not experienced to some degree, you’re ****ed, sorry no other way to say it. If you haven’t however made the stupid cost cutting blunder of immediately getting rid of your top staff (because they cost too much, boo hoo), you’ll be fine. Luckily I can see that in Roomzilla, we have these areas covered well. I compare it to the “rock star” & “rock solid” teams I had the privilege to work with during the past tough times. Enough with the team spirit and praise though, what exactly does the title of this section mean?:
- YOU are the guru (of your company / industry). Please stop paying other external self proclaimed gurus both in time and money. There is no “magic bullet”. You’re going to have to use your senses, gut instinct, and data / analysis to get through this period. I’ll share an internal example: we used one of these top marketer’s recommended tools to analyse our site during April for some SEO cleanup. To be fair, it was useful but also dangerous as some changes could have potentially provided us with downtime traffic-wise. Like that’s what we needed, less traffic during this critical period. The point here is, I’m not bashing any of these so called marketing “evangelists”, but please use your senses when taking advice from them, an agency, or any external source as they don’t know your situation as well as you do.
- Try out different marketing channels – now may be the best time to actually go and try out this “out-of-the-box” idea that’s been in your head for the last few months. With limited budgets on your regular channels why not use this time deploying something completely new?
- It’s not about prospecting for gold only, but also ensuring the gold you already have is well taken care of. Get in closer touch with your existing clients – talk to them and ask about their feelings regarding the future as well as their needs in the light of global pandemic. Who knows, maybe there’s something you can do that would mean a lot to them, but actually requires very little effort on your side (after all, it’s the “small things” in life, right?). Fostering good client relationships and being there for them during these difficult times may be the best investment you’ve ever made.
- Spend if you have it, with caution. I find the analogy of a ship in rough seas used numerous times during such a period of crisis, appropriate. You need a captain & crew that will either maneuver you out into calm seas ahead or sink your boat. When it comes to marketing & conversion to sales, Harvard Business Review has this well known diagram that paints a customer segment picture relevant mainly to retail, b2c but it can also be modified and tweaked to most industries and a better understanding of them. So while it wasn’t used 100% for our b2b sector, it’s approach was to some degree in order to help us:
What happens during a recession is often the miscalculated assumption that everyone has entered the red segment; however, the reality is there are so many stages before that is the case, and that it is more likely positive in that most will enter a borderline yellow / green.
When March came around, we safely assumed here that our prospects & customers initially mainly fell in the yellow but also borderline red area. Again, we of course adjusted this diagram or at least its essence to better fit our business model (and it wasn’t necessarily in a diagrammatic format).
However, in my analysis from reading government announcements, reviewing the pandemic stats, and comparing sources from different media & other outlets, from March onwards I was waiting for that moment when I felt our customers would start shifting from yellow to green. My prediction fell in line with others, the shift month would become May.
So first, do not stay stuck in red longer than needed! Don’t play “mind games” with you strategy.
What’s also important here was that there was no fear of missing out (FOMO) factor, if competitors did something, it was good to keep an eye on it but I wasn’t going to be a follower. The whole team had to be true leaders and try to make the right decisions for the business not based on thin trends.
When May came around, it was time to start testing the theory that it was a turning point for us and our industry. The budgets & resources were nowhere near what we were working with pre pandemic and that was expected now, and the approach had to be a cautious continuously monitored one. No fancy AI this or Analytics that tools, this was a moment to go back to basics and truly do real marketing:
- First, was the research and analysis already mentioned above.
- Next, we luckily had historical paid search campaigns with data. Some of them were reactivated as what I call “probing” campaigns … this is not so straightforward of course as on one end, paid search can give you immediate results but on the other end, so much changes in a day, week, month etc and a few weeks had gone by since we paused everything, so it’s not about looking for exactly the same results with the exact same old campaigns, it’s about extracting the right story and data from such a technique.
- Then, it was about “fishing” for possible trends in terms of which countries to focus on. Was country X in fact “defrosting” and returning to some regular level of norm including their purchasing behavior or was it just inaccurate media. This involved a technique that I find is often misunderstood and – as a result – poorly presented by so many sources. Namely, micro-optimizing and extracting results. In this case, I wasn’t trying to get an increased conversion of 10%, I was trying to understand if in fact we are able to actually start up our marketing again or if it was futile. I won’t go into the details of how I did this here, as it is it’s own article.
- The result, we’ve already seen an increase in leads and potential business. I think that is saying a lot, considering our industry specifically.
As Martin Luther King Jr. said “The true measure of a man is not how he behaves in moments of comfort and convenience but how he stands at times of controversy and challenges.” Again, that is why your marketer and – any critical staff member – needs to know what they are doing and that is why such a crisis like the one we have right now weeds out the truly experienced leaders from the ones that just aren’t.
It’s a recession. Not the Apocalypse (yet)
Once it has been determined that we’re able to reactivate marketing, the “new normal” is no longer just a socioeconomic & behavioral term, but rather needs to also be incorporated into your marketing strategy & approach as well, especially during the initial recovery months, but even more so during this current crisis. Why? Because unlike the recent recessions of the past, we are being held back by a dangerous virus to enable us to start a stable recovery path. As the World Economic Forum comments on this, they also present a graph that gives some recovery insight into past recessions:
The challenge we face now is when comparing that graph to the current crisis, no one has an answer yet on when we can anticipate a stable start to a recovery. Brookings illustrates this very well in a recent analysis.
Are we doomed then, absolutely not! Now, more than ever before, does marketing & growth take on a new form. It is no longer a standard “what worked for the Great Recession works now” approach, but rather marketers and their skills will be getting tested constantly. I would even say that this is a time to challenge previous notions of what deems a campaign successful, fully use the tools, data, and info at your disposal, and gradually deploy once fully satisfied with early results, but do not stop testing and trying to identify new approaches, content, channels and other revenue models.
I won’t be surprised in our industry if – within the next few months – the channel mix used to acquire and retain customers changes (at least in terms of proportional investment), and in fact we’re already starting to ideate and incorporate that across Roomzilla from product, sales to support and marketing. As this is part of our strategy and confidential, I can’t share what that will consist of; however, as a fellow human being that doesn’t wishes everyone well (even our competitors) and especially now, I can say that the approach & techniques described here will continue to be used and have already providing us with gains and useful insight. Take the hint, and I encourage you to give them a try yourself to the degree they are relevant to your business.
The Show Will Go On With or Without You … Make it With!
For most client based driven industries: marketing & sales are the fuel and spark plugs of your engine (product, support, etc.). You can reduce the fuel (budgets) and the engine will still run but if you get rid of strong spark plugs (staff), keep in mind that other engines will be looking for strong spark plugs to get them running.
Is this an automotive lesson?, of course not and you can see that already; however, while this may not be a marketing technique related statement, it is nevertheless an important part of ensuring you have that crew to get you out of this poo (difficult time). This is now even trickier than it used to be especially as remote is now officially an option. While we’ve written numerous times on this topic here in our blog in terms of the exciting new way forward it presents for Roomzilla, fantastic data sources compiled such as Merchant Savvy have done here show that this trend was growing pre pandemic and is here to stay post pandemic.
With Slack recently releasing another interesting report presenting this graph here:
The final point here is in order to ensure that your marketing and company growth is going to flourish within this new era, consider all your options & be transparent with your team to ensure you keep your spark plugs (as well as all the other engine parts). People respond to people and in many cases you’ll be pleasantly surprised at the level of understanding of the current situation by your team. Additionally, while the media may be toting the high level of unemployment right now, I believe this information is a precursor to an employer market like never before seen by Q1 2021. If you were struggling to find strong team members before, get ready for an even harder time as the competition will no longer only be within your current city to country level only, but now on a more global scale, competing with virtually any company on the planet.
Here at Roomzilla, we’re confident that – with our upcoming strategies & product changes – we’ll be a strong compliment to this new era. If you have any doubts, time to take a deep breath, time to take a deep breath and rethink the coming months.
On behalf of Roomzilla, our hearts & condolences go out to the people that have suffered the ultimate tragedy during this period and that are suffering due to the economic situation. I hope that at least the above can offer some guidance (or at least an idea or two) in terms of how to strive towards better times again. Remember, recession marketing is not going to be easy. In the meantime, Good Luck to us all!