Wife? Kids? Phone? Keys? Wallet? Everyone OK?
Week four of Working From Home (WFH) is like opening your eyes after a ride on Dreamworld’s Giant Drop.
In less time than it takes to watch a season of Tiger King, millions of Australian businesses and organisations, managers and employees have learnt The Pivot – a graceful piqué through a curtain of unreality into a “new normal” world of video conferencing, online shopping, home education and unrequited pantry visits.
The question now is what will The Other Side look like for businesses, corporates and organisations and how can we use this time wisely to prepare for a new unknown?
History is of course the best teacher, so to get some perspective I sought out a couple of reflections on the end of the 2009 GFC: one from global consultancy firm McKinsey and Co. and another from Harvard Business Review.
Lesson 1: Prove value
The first takeaway is that consumers come out of recessions with a heightened demand for value – and the deeper the recession the longer the behaviour change lasts.
Need evidence? Just look at our post-Depression grandmothers washing their plastic bags, rinsing the last smear in the Vegemite jar to make a nourishing broth and darning socks.
“More than 33 percent of bottled-water users discovered that they no longer needed some of the benefits the higher-priced brand provided,” the McKinsey report says. “And nearly 32 percent of facial-moisturizer consumers felt better about using the lower-priced brand than they had thought they would.”
We’ve always recommended our clients build their marketing strategy on premiumisation and point of difference rather than making price your only proposition and discounting your way to the bottom (like the unedifying Coles/Woolworths battle of 2018-19).
Maintaining that higher ground in a price sensitive world will mean proving your value and that means marketing the tangibles (real product benefits) and the intangibles (the look, the feel and the story) more precisely.
For manufacturers and retailers, you can use your enforced downtime to review your products and services with a dispassionate eye and determine how you can sharpen your offer. Could you tell your story in a more exciting way? Would your brand benefit from better design cues? What are the value adds built into your offer that your competitors don’t have? Or is it time to consider a lower entry point range to start the customer relationship with your product?
Most importantly, keep connecting with your customers reminding them that you are on their side.
John-Paul Drake’s leadership in community communication has been a great example of showing how a local retailer can move faster and be more authentic than his global corporate competitors.
For not-for-profit organisations and government agencies, this is a good time to consider your standards of customer service, the strength of your relationships and your image in the community.
Does your 2010 website really represent who you are today? Does it provide value? Does it engender trust and loyalty? Are your EDM databases accurate and up to date enabling you to maintain your direct relationships? Have you sat down with your staff (on Zoom or Microsoft Teams) and together fine-tuned your service systems and procedures?
Lesson 2: Embrace simplicity
Many of us have a yearning to revert to a simpler life, and this is most pronounced during recessions.
“In the consumer electronics industry [in 2019], 60 percent of consumers were more interested in a core set of product features at a reasonable price than in the bells and whistles of the latest and greatest technology at a higher price. Similarly, in the building-products industry, there was a trend away from premium-priced design features and toward simpler, more basic designs,” the McKinsey report said.
That desire for a return to simplicity is a trend that many of us saw coming prior to COVID-19. I don’t know about you, but I felt increasingly uncomfortable about the shallow cult of celebrity reflected in our trashy TV shows, the exhausting treadmill of consumerism, the dismissal of the seriousness of climate change by world leaders and the toxicity of our political systems.
Harvard Business Review points out that this shift to a less material life even affected the well-off in 2009: “Our research among more affluent consumers has revealed mounting dissatisfaction with excessive consumption. Many desire a more wholesome and less wasteful life. They’re recycling more, buying used goods, and imbuing their children with traditional values – behaviours that dovetail with the growing demand for simplicity.”
That is of course what has been happening in the last four weeks of 2020 – we’re growing vegetables, baking bread, revelling in comfort foods, adopting pets, learning the guitar, reading the bucket list book pile with relish. Next thing we’ll be knitting those dreadful 60s cable pattern jumpers for winter.
Now is a good time for your business or organisation to revisit its ethical stance and consider whether your mission is in line with what your customers and stakeholders want? Are you embracing recycling and energy savings? What is your stance on climate change? How can you “pivot” to a more contemporary green business and bring your customers along with you on the journey – not in an opportunistic way but by being transparent and honest?
Six weeks ago we registered to start the process of becoming a carbon neutral business this year through the Federal Government’s Climate Active scheme. We didn’t expect that our staff and business travel and office energy consumption would drop to an unrealistic zero overnight but when we return to our office, video commuting will certainly become one of the tools we will embrace to reduce emissions…and we’ll have an office veggie garden!
Lesson 3: Manage your reputation
Few things are more important to businesses and organisations than their hard-won reputations – and a failure to manage public opinion during this time will consign some to the dustbins of history.
“Public respect for institutions and authority – particularly government and business – has been declining for decades, fed by consumers’ growing confidence in their own ability to find information and tap family and social networks in order to make smart choices. The decline of deference is also driven by mounting scepticism about the quality of information provided by traditional sources of authority such as businesspeople, economists, doctors, and the clergy. Shallow recessions typically accelerate this trend as consumers blame institutions for their woes: in deep downturns, such as the Great Depression, the reverse effect can occur,” says Harvard Business Review about the fallout of the GFC…but it could be talking about 2020.
There are, however, a couple of key differences. Unlike 2009 where greedy corporates were the obvious whipping boys of the community, there doesn’t seem anyone to blame for COVID-19.
Moreover, our Federal and State Governments are generally acting with bipartisan calmness, vision and sensitivity using our taxpayer funds wisely to shock our economy into life. Like it or not, Big Government is here to stay for the medium term.
There have also been many amazing examples of business generosity: closed restaurants delivering handmade meals to homeless people; the Adelaide Entertainment Centre becoming a Meals on Wheels kitchen; Andrew Forrest donating $520 million through his Minderoo Foundation to purchase health equipment; and Gina Rinehart forking out $6 million to install ventilators in all Royal Flying Doctor Service aircraft.
When the national audit of authenticity takes place in a few months, consumers, employees and suppliers will be running the ruler over those who did and those who didn’t.
If you are a corporate or government agency the most important thing you can do is remain engaged with your stakeholders, staff and customers – share your customer’s concerns and reflect the growing mantra that we are all in this together.
There are many ways to do this – for example I’m not sure that I feel better that Lexus is here for me but Apple’s assurance that Creativity Goes On provides lots of points of connection (with their products) and of course there is much needed room for humour.
To connect with a very different post COVID-19 audience, CEOs and Boards need to undertake some soul searching. Will you be able to tell your grandchildren with your hand on your heart that during the worst health pandemic in 100 years, that you made a difference to humanity?
Lesson 4: Create experience
The final trend noted by Harvard Business Review was a move away from extreme experiences to the more local and understated.
“Some experiences—those that are relatively cheap and connect people to nature and wholesome thrift—will continue to flourish. However, exotic experiences that are expensive, frivolous, risky, or environmentally destructive are suffering from a recession-driven mood of seriousness and responsibility,” the article says.
COVID-19 is very different to the GFC in its almost dystopian requirement for social isolation, so it is expected that when people do eventually leave their homes, they will be even more eager to seek out experiences that have been denied them for months.
But this is unlikely to include overseas travel – it could be 12 months before international destinations are cleared of the virus completely and it would be a very adventurous traveller who signed on for a cruise any time soon.
The opportunities will therefore be in local travel with a twist of simplicity. We can expect a demand for family-style gatherings, rustic food, handmade wines (but not at $100 a bottle) and back to nature experiences that focus on the beauty of our own state and country. Art galleries and dance performances will trump conspicuous consumption events like $500/head restaurant degustations and fashion parades.
Life that is more Maggie Beer than My Kitchen Rules seems like something to look forward to.
The Other Side Sessions
Feel like shooting the breeze about your COVID-19 marketing and business planning?
As a way of giving back to our clients, Fuller is offering a series of The Other Side one-on-one video conference sessions during the next three months. Our strategists will be available at no charge to help CEOs and marketing managers come to grips with the challenges and opportunities that lie ahead in 2020.
Book one of these sessions by contacting Business Development Manager Paul Kitching today on paul.kitching@fuller.com.au or phone 0413 490 573.