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Brief

Marketing for “Somewhat Bad” or “Really Bad”

Marketing for “Somewhat Bad” or “Really Bad”

The coronavirus outbreak is forcing companies to recalibrate their scenarios.

  • min read

Brief

Marketing for “Somewhat Bad” or “Really Bad”
en

With massive shifts in business triggered by the coronavirus outbreak, there’s a strong instinct to plan for scenarios. But as Bain & Company’s Macro Trends Group suggests, these are exponential times. Scenarios will be different—not high, medium and low, but somewhat bad and really bad. Start executing for somewhat bad, and have a plan for really bad.

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Priority 1: Basic orientation

To that end, the first priority is to gain a clear idea of what’s going on in your business. While this might seem obvious, you probably have four problems with your reporting: It’s siloed, delayed, too blunt and describes rather than predicts.

To remedy these problems, change course in several ways:

  • Look upstream. Identify upstream proxies for demand, such as store or website traffic, search or display ad clicks and social media comments.
  • Set the context. Don’t consider media and promotion in isolation. A well-advertised, shallower promotion increases profits more than a deeper, unpromoted one.
  • Go beneath the average. Unpack your analysis and your broad conclusions about what to do. The right answer for one product or region or customer segment may not work for another.
  • Make predictions. History may not repeat, but it does rhyme. By looking at the difference between current performance and the very recent past, you can guess the rate of change. This can signal when you’re hitting inflection points. Group enough indicators together, and you stand a better shot of calling turns. The prediction might not be perfect, but it will fall inside the turning circle of your competitors.

Monitoring the rate of change is critical, and there are plenty of free services and data to use, even the analytical tools provided by search engines such as Google. For instance, a search on prominent brands of household disinfectant (blue line), hand sanitizer (red) and toilet paper (yellow) provides the rate of change in the screenshot below from Google Trends. This data suggests that most people have now bought these products and are at home, so it wouldn’t be useful to advertise these items at the moment.

Priority 2: Media and content testing

The second priority is to ramp up well-governed, in-market media and content testing. If most marketing models normally give somewhat wrong answers, they now are far off the mark. Asking customers what they plan to do is risky, because they may not know themselves. Instead, watch what they do, then ask them why.

Litmus questions about testing include these: What are the 10 in-market tests of media weight or creative that you have in flight right now? Why these 10? How do they reflect high-priority insights about the business right now? How will you scale up the winners? How will you know you’ve reached diminishing or negative returns?

Priority 3: Behavioral changes

The third priority entails anticipating changes in customer behavior. Parse them according to the two scenarios.

In a somewhat bad scenario, massive change won’t last long. Content, media, product and time preferences shift, but they’ll return. Nonetheless, in this case we can expect:

  • People will watch more TV. Anxiety will drive them to local news. The absence of live sports will drive them to increase video-on-demand subscriptions.
  • People will participate more on social media and multiplayer and online gaming.
  • People will respond less to product ads and more to purpose ads. Purpose can be noble (stories of community and support, customer heroism) and the pedestrian (cooking and home repair).
  • Most obviously, the shift to online shopping will accelerate.

In sports, when the playoffs arrive, smart teams “shorten the bench.” In business, that means promoting your hero products and benefiting from the halo your core brand provides, while temporarily dialing back investment on the long tail of smaller, high-potential growth products.

Turning to a really bad scenario, changes in behavior endure. Some companies, such as Netflix, Amazon and Grubhub, will benefit. For most other companies, new consumer behavior will require rethinking what to sell and how to sell it. You may not have the cash today to invest in product innovation and marketing creativity, but you can consider how you would structure those activities as demand and resources come back, and start networking and exploring now.

In other words, don’t hunker down, reach out.

Priority 4: Possible next moves

Finally, the fourth priority is to think a couple of moves ahead. Live TV networks, for instance, have lost programming because of canceled sporting events. Because networks cannot deliver those audiences, they’ll have to offer make-goods to advertisers. This might depress prices in the scatter markets (sold on a piece-by-piece basis at random times), which in turn might pull local rates down, making a geography-focused strategy more economically feasible.

This is just a possible scenario. The point: Keep an eye on such possibilities. Instead of thinking about a future mix at today’s prices, reconsider what it might look like under very different circumstances.

Cesar Brea is a partner with Bain’s Advanced Analytics and Customer Strategy & Marketing practices. He is based in Boston.

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