Global Recession - Pull Back or Push All in?
Last year, my talk was about what business owners should be doing in a changing economy. Logic dictated that the longest economic expansion in US history had to come to an end. I didn’t know when the end was coming, but I assumed sooner rather than later. You can find an overview of that talk here. While my timing may have been a little off, we found the end. I in no way expected what we are currently experiencing, but many of the ideas I spoke about ring true.
By looking back, we can prepare and set strategies for our business to move forward. I won’t rehash all the data from last year’s talk, but long story short: keep calm and don’t react quickly without some expert guidance. The decisions businesses make right now in the face of social distancing, lock downs, economic turmoil and toilet paper hoarding (I can’t believe I was able to write that in an article!) will have lasting impacts on the people and the brand. Each business situation is unique and will require a strategy that reflects the uniqueness, but I will provide some high-level guidance based on the types of businesses.
For ALL businesses selling online: Focus marketing dollars where you can track return…most of you will use Google Analytics as a source of truth. If it looks like it has a bad return in Google Analytics, it requires deeper analysis to see if it should be cut. Facebook, for example, generally has very different return on ad spend (ROAS) for past customers and prospecting new customers. Separate those groups into different campaigns and measure in Google Analytics to see if it makes sense to keep marketing to both of them. On Google/Microsoft Advertising, make sure you deeply consider breaking out brand searches and non-brand searches in BOTH search campaigns and shopping campaigns. There can be significant benefits to targeting different ROAS goals. The shopping campaigns can get complicated, but worth it. In a downturn, for every scenario or business I will ALWAYS recommend that they spend down to break even with return on ad spend on non-brand searches in PPC search and shopping. This also means that email is tremendously important as is a loyalty program. Get them, use them.
Online retailer selling other businesses brands: Keep pushing marketing but long term, you are going to want to own some of your product lines. If you have brands you sell that you can acquire in a downturn, do it. For some retailers this is trademarking a design or entering into a partnership with a brand to have your own product. The margins are better and allow for more options on Amazon and other platforms when you own the brand. Find a way to become the Nordstrom or Zappos of your industry. Many times retailers will tell me they have the best service and most knowledge of all the other retailers in the industry…therefore they charge more. Most of the internet doesn’t know about your service or knowledge and therefore they don’t care. Match or beat your competitor’s pricing whenever possible. Google’s shopping algorithm places a high value on low pricing for the same product. You need to be able to get a customer first before they get to experience your service and knowledge.
Retail storefront with online store: Make sure your business is positioned at eCommerce first. Retail is struggling and will continue to do so. Ecommerce allows you to touch more customers than a storefront. Separate your marketing into driving online sales and driving foot traffic. More than likely foot traffic is not going to happen while the country is on lock down, but you’ll want to be able to adjust budget and goals differently when you can start driving foot traffic again. Many companies, including one of my own has been a retail storefront first business. It hasn’t been the easiest transition to eCommerce first as we’ve had to look at our product mix for shipping and what we can buy and compete on price with other online retailers. Free shipping is a must and most retail first businesses struggle with this concept. It seems basic, but email your customer base and let them know your online store will remain open. We’ve even done pickup on the retail porch. I also recommend the company long term looking to match Magnolia in Waco, TX. They have created a retail experience that draws people in-it is not only a store. Waco is actually a place people want to visit now because of what Magnolia has done. For retail stores to survive they have to be more than a place to shop.
Brands with retailers and direct to consumer sites: don’t be afraid to sell at the same price as your retailers. So many brands have been caught up in MSRP, retail price agreements, etc. Get out of all contracts that force a brand to sell at a higher price than a retailer. The consumer is buying your brand and you deserve to control the brand experience once they’re loyal to you. Advertise on your brand, aggressively. On non-brand terms, your site has better margins than your retailers and is better equipped to spend against competitors than your retailers. Support your retailers in ways unique to them. If they are only a storefront, they are going to be having major issues during this time. One of my brands that has retailers is creating specific bundles of packages with some of the retailers’ products they can sell on their site. Some of them needed help getting online, which thankfully I was able to assist quickly with. When foot traffic does come back, I would imagine their loyalty to you will increase.
Lead generation: I think this is almost business as usual. Most businesses are trying to work from home and I think this is a great time to get aggressive on phone outreach and spending online if you see your competitors pull back. Logical Position is getting aggressive and finding every opportunity to spend more online and help businesses with their online marketing. Our 200-person sales team is working from home and having great phone conversations. Leverage partner networks. Create more video and written content (like this 😊). For a business like a plumber, making sure you’re aggressive on emergency terms on mobile will be big. They already should be, but this is a great time to make sure.
Local storefront only (needs foot traffic): This is the area I think spending online doesn’t make much sense. This is where the ownership/management probably needs to do some grunt work. Most of the employees will be laid off (if you’re like Oregon) so they can get unemployment. I would think there is tremendous opportunity to connect with customers and potential customers on social media. I would find complementary local businesses who target the same customers and work partnerships with them for co-marketing online events or contests. If you’re a restaurant, maybe do a live cooking from home to show followers how to make some of your top dishes from home. If you’re an escape room, create puzzles for your followers to solve and maybe do an online scavenger hunt. Winners get to help create the next escape room puzzle when the doors can open.
In many cases in online marketing, to the aggressor go the spoils (and the customers). Please understand that all of these scenarios are major conversations and in this article I’m only trying to give some guidance to starting the conversation. If I talk to 50 of you reading this, there will most likely be 50 unique strategies come out of those conversations. Please don’t hesitate to reach out and have a conversation about what you could be doing at this time. I love to get into the data of Google Analytics and Google Ads (the easiest platforms to audit), pull some reports and talk strategy. Email me at Ryan.Garrow@logicalposition.com or book something directly on my calendar when our schedules align.