Coronavirus Outbreak: How Should Brands Respond?
Consumption of media (including social media and Netflix) and usage of e-commerce are expected to rise sharply as more and more people quarantine themselves at home amid the worst global health crisis the world has seen of late.
Fernando Polo, professor at IE Business School and CEO of Good Rebels.
Nevertheless, the economic impact of this crisis will be massive. World GDP projections are bleak. Advertising expenditure is expected to decline by 50% or more during the quarantine and marketing budgets are being readjusted on the run. Some industries are completely stopped and others will struggle. How should brands react?
We are obsessed with inspiring organizations to become more human-centric: focused on their customer journeys, but also on the journeys of their employees and society at large. All three are intertwined and, at unprecedented moments like this one, it is crucial to demonstrate that we care not only about profit, but mostly about people and purpose. Companies that publicly applauded the Business Roundtable statement or the Davos manifesto as recently as last January must now walk the talk. Yes, most businesses will struggle financially, but people are worried, firstly about their health, and secondly about their financial security (consider the situation of freelancers and self-employed workers, temporary workers in the travel and hospitality industry, and even permanent workers).
Some businesses are already offering true help (it’s time to do, not talk). Telefónica announced that it would give free GB of data consumption to help families stay connected at home. Microsoft did something similar with their Teams tool. But most companies are suffering, and now is when we will see their true nature.
Three phases for brands: are CMOs getting ready?
We have defined three phases of preparation and activation for brands in the media, at both the commercial and communication levels. These phases provide a hint of what is yet to come.
Phase I. Shock and adjustment
This is the phase we are in now: austerity and putting communication at the service of crisis management.
Phase II. Reactivation and engagement
This is the time to start anticipating what will come in the third phase. Brands will have to build credibility, commitment, and links, especially through digital media.
Phase III. Revenge spending
Finally, departure and escape: the best-prepared brands will revive their communications and media to intelligently and creatively lead a social movement generated by rising consumption.
Now more than ever, the marketing function will have to be redefined. Honest brands will understand that it is not the time to be at the center of the conversation. It’s time to act, not talk. Brands will have to adjust their messages and tone of voice and get ready. As quarantine drags on, we will miss our social contacts and will rely on digital channels more than ever. This is a good opportunity for brands to do it right and be human-centric: truly care about people, offer help, stay calm, and
flatten the curve, while focusing on customer service and fostering engagement through digital channels and routines.
When the time comes, they will have the opportunity to reposition themselves, to regain lost confidence, and, most importantly, to start transforming themselves for a new era of customer experience. Without a doubt, they will need to become more digital, more connected, and more willing to put creativity, innovation, and customer experience at the service of a society that lost faith in brands long ago.
Will brands be up to the challenge?