Many customers are looking for something different from their favourite brands, and businesses need to stay one step ahead
The outbreak of coronavirus (COVID-19) has led to consumers changing the way they are spending and what they want from brands has shifted.
As a result businesses must rise to the challenge of communicating with their customers in a way that reflects the times in which we live, and adapt this strategy as the crisis plays out.
Here are three tips on how businesses can connect effectively with their customer base during the pandemic.
1. Understand how customers’ needs are changing – and react
Consumers are approaching the pandemic in a variety of ways. While some are continuing to buy their preferred brands at premium prices, others are understandably seeking low-cost alternatives or postponing certain purchases indefinitely. To understand how customer needs have changed and what opportunities may be available to meet them, brands must either be very good at customer research or be prepared to invest in it.
For companies that are experiencing a drop in sales, promotions, flexible terms and price cuts can be useful to stimulate demand. However, they should only be used if they are consistent with the positioning of the brand, with short-term sales volume and revenue balanced wisely against long-term brand strength.
Even in a pandemic the best brand strategy is to continue to reinforce the attributes that made the brand appealing and unique in the first place. A strong emotional bond with the customer can still provide the most effective defence against external forces and the key challenge is to protect sources of brand equity. Companies wishing to minimise fluctuations in their cash flow could also choose to launch a low-price alternative – a fighter brand – marketed under a different name and not competing directly with the main business.
Brands must either be very good at customer research or be prepared to invest in it
One of the most effective ways to align a business strategy with customer requirements is to involve them directly within the innovation pipeline through customer participation efforts, such as social media, dedicated platforms and surveys. In our research, we found that not only can this lead to more effective innovation, but it can also increase customer loyalty, something that is particularly desirable when the relationship between consumers and brands is being put to the test.
During the 2008 financial crisis, Starbucks launched the wildly successful “My Starbucks Idea” platform, allowing customers to share suggestions about how the company could improve its service and product offerings and debate them with other customers and Starbucks employees. The initiative worked not so much because of the ideas that it generated, but because the mere act of participating created a strong psychological bond between customers and the brand at a time when it was most needed.
2. Be considerate, useful and adaptive
While it may be acceptable to turn a crisis into an opportunity in order to survive, brands should not be too aggressive in the face of adversity.
Companies need to consider how their advertising should be adjusted to the current context by being aware of consumer sensitivities without appearing exploitative. The removal of the “It’s finger-lickin’ good” slogan from KFC’s advertising was an excellent idea. Meanwhile, the use of an image of empty toilet paper shelves by a health insurance company to urge customers to be prepared for anything was perhaps not such a good idea, demonstrating that the use of humour in advertising should be considered very carefully.
During such an unprecedented global crisis, brands need to find ways to be useful and relevant. Businesses can reduce the risk of appearing opportunistic not just by communicating, but by visibly acting in a supportive and helpful way.
Brands should not be too aggressive in the face of adversity
Some brands have helped spread the message to stay home and adjusted their marketing to be helpful in a world that is in lockdown. For example, Nike launched its “play inside” campaign with the slogan, “If you ever dreamed of playing for millions around the world, now is your chance”. Importantly, Nike also reinforced that message by giving out free subscriptions to its Nike Training Club app and boosted its content marketing efforts to reach consumers in lockdown who want to be active indoors.
Many brands have contributed through financial donations. Dyson developed a ventilator for the NHS, Armani switched all its manufacturing plants from making luxury goods to making medical overalls. The brewery and pub chain BrewDog was quick to set up virtual pubs for people to join online and to use its distilleries to make hand sanitiser for free distribution to hospitals and charities.
3. Be transparent
The pandemic has created a lot of uncertainty and it is normal for consumers to be worried; it is important for brands to manage this uncertainty and reassure their customers as much as possible.
In our research, we have found that companies can greatly decrease customer uncertainty by adopting brand transparency. This means providing customers with clear, accessible and honest information, and this approach is now more important than ever.
Businesses should be reminded that crises are a great opportunity to establish loyalty
The travel industry is replete with examples of good and bad practices in the exercise of transparency in response to COVID-19. For example, the tour operator Much Better Adventures was quick to communicate with customers in a way that reassured them and built trust and loyalty, offering them the chance to cancel or postpone trips, along with a five per cent lifetime discount as an incentive to postpone. This reportedly resulted in 80 per cent of customers opting to postpone rather than cancel. In contrast, Ryanair issued a rather nebulous statement advising that “customers who choose not to accept a free move or voucher will receive their refund in due course, once this crisis has passed”. Unsurprisingly, this led to customer outrage.
Businesses should be reminded that crises are a great opportunity to establish loyalty, as consumers will evaluate a brand’s response and use it as a test of trust. Companies that rise to the challenge by adopting a customer-centric response strategy are more likely to emerge from the pandemic as winners.