New reality or business as usual?
Companies who maintained their investment in marketing and communication during a down-turn tended to rebound much quicker than those that cut back.
At the time of writing the UK seems to be moving back towards some semblance of normality; gatherings of small people are allowed, schools re-opening and top-flight football looks set to return within a month, although for those of us in need, the desperate wait for hairdressers and barbershops to reopen continues.
From a business perspective, whilst there are still some sectors and businesses that are far from business as usual, there is a sense that the cogs of UK plc are starting to creak back into action as the economy prepares itself for the inevitable global recession.
Rather than try to prophesise too widely about what impact these recent challenges will have on the future of the workplace environment and consumer habits, or how wider human culture will respond and adapt to the world following COVID-19, instead, this piece takes learnings from previous recessions to help show how companies might respond to future challenges and ultimately maintain or amplify their marketing and communication in an ever more competitive field.
Examining the 2008/9 crisis
Figures from Duedil estimate that 27,000 businesses in the UK ceased to exist during the financial crisis a decade ago – including the high-profile names of Northern Rock, Bradford & Bingley, Woolworths and HBOS. In the US, this number was closer to 170,000 according to the Federal Office of National Statistics. Some companies however, thrived:
Now one of the world’s largest financial institutions but during the financial crisis, largely a provincial lender in the United States.
By sticking to a conservative growth strategy, unlike some of its larger competition, Wells Fargo stuck to its tried and trusted local approach to business and actually managed to increase its capital when most other companies were shrinking.
A market cap of close to $2 billion, and close to 200 million subscribers, but back in 2008 Netflix was a start-up with a business model few thought would succeed. A purpose built on great customer service, at a time when traditional business models (who remembers Blockbusters?) were struggling, started Netflix on the journey to becoming the household name it is today.
There are clearly many attributes at play that have led to these businesses’ long-term success but when you examine them in more detail there are identifiable, common threads that help to explain how they have both met and exceeded the expectations of their stakeholders:
- Purpose driven
- Forward thinking
- ESG focused
- Culturally aware
- Digitally effective
Assessing the 2020 crisis
The lines of communication were already becoming blurred between distinct stakeholder groups, especially those trying to address both corporate and commercial audiences. The advent of lockdown in March, however, meant that disparate groups were becoming party to similar types of information and, as such, consistency in company messaging became more pivotal than ever.
For those communicating with markets, the moratorium on financial statements, numbers and dividends meant other measurements for what made a healthy company were required so subjects such as, risk management, business continuity plans, financial viability and a focus on people and society have come to the fore. These subjects are now also of interest to more than one specific stakeholder group and as such could we see ‘Business2Everyone’ become a theme that communicators must consider.
What should companies look to do?
When faced with new, more challenging dynamics, the reaction of most companies is to retreat. A study by McKinsey in 2008, however, discovered that those companies who at least maintained their investment in marketing and communication during a down-turn tended to rebound much quicker than those that cut back.
If you’ve never properly invested in your brand, it is probably too late now to build brand cache. To get through the coming months companies can, however, take a number of practical steps to ensure they are ready to deal with what lies ahead:
- Take the lead on your narrative: examine who you are, who you want to be and what you want to achieve
- Bring different operational siloes together to communicate as one: what are the common threads across your corporate and commercial comms
- Set effective measurements: define what success looks like and how you are going to reach those goals
Watch this space for more commentary from us on what the new reality might mean for companies and how they should react.
If this has made you want to consider how you could do things differently, get in touch with one of our team firstname.lastname@example.org or find out how we can help with your website, annual report, sustainability or communications in general.