COVID-19 and The Sate of Marketing and Consumer Behavior
Author- Sameer Shaikh
“It has been over a century since our world has faced a pandemic of Covid-19’s magnitude. The socio-economic disruptions triggered by the virus will continue for upcoming months and a “new normal” for business seems likely to be in the long run. As an organizational activity, business function, and profession, marketing sits at the epicenter of corporate responses to these challenges as companies shift their go-to-market activities.”
~ Christine Moorman, T. Austin Finch
Figure 1: www.gettyimages.com
CMO Survey 2020 – a
survey of around 300 top marketers of US companies produced and conducted by
Deloitte, Duke University’s Fuqua School of Business, and the American
Marketing Association (AMA) shed light on how the coronavirus crisis has
impacted the marketing strategies of prominent brands. It states about how this
pandemic has reformed the landscape for marketing organizations across a range
of industries. One of the most vital key findings: because of the total
collapse of in-person marketing engagement due to the lockdowns, customers are
now considerably more open to new digital offerings and experiences from the
brands, more interested towards companies’ efforts to promote social good, and
more deliberate in their consideration, purchasing, feedback and loyalty behaviour.
These disruptions have led to comprehensive shifts in marketing tactics and
investments within departments as leadership is scrambling to adapt to a new
and an absolute uncertain future.
Let’s have a look at some
of the key findings of the CMO Survey:
Customers prioritize trusted relationships.
Marketers expect that customers will place a higher value on “trusting
relationships”, as 29.3% are expecting it will be customers’ top priority. Most
of the marketers surveyed expect customers to focus more on “trusting
relationships” with brands and companies than on low prices, despite the
economic slowdown.
Around 80% of CMOs believe
customers are paying closer attention to the social activism, outreach and
investments of companies during a pandemic, and will reward brands that represent
their values with greater loyalty in the long run.
Online and digital are essential.
According to the survey, online sales have grown 43% between February
and May, 2020, accounting for 19.3% of all sales --- marking a trend in more
companies selling online. Small companies (with less than 500 employees) are
taking full advantage of selling online, at 26.1%. The emergence of doing
business online has made consumers significantly more open to digital offerings
and experiences - a shift that marketing executives believe will persist even
after the pandemic recedes. This suggests that efforts in digital marketing
will command a greater share of total marketing spending moving forward, even
if overall marketing budgets shrink around 10% next year, as many of those
surveyed expect.
Social media is a critical brand-building tool.
As marketers emphasize on building brand trust and loyalty to attract
and retain customers, companies are more and more using social platforms as a vital
engagement tool.
Brands are using social media for brand awareness and attracting and
retaining customers much more than for market research, engaging employees, or
other social media pursuits. Marketers stated that 7.5% of their marketing
spending is assigned to online influencers, mostly on Company blogs, LinkedIn,
Instagram, and Facebook, and that they are anticipating large gains in the use
of influencers in the next few years (up to 12.7%). Marketers reveal a clear
prioritization of mobile website optimization (70.1%) over app creation and
maintenance (29.9%).
84% of CMOs are using social media for brand building and more than 54%
have used it for customer retention during this pandemic.
Figure 3: Social media used for various purposes according to the June, 2020 CMO Survey. Christine Moorman/CMO Survey
Figure 4: Marketing budget for social media
according to the June, 2020 CMO Survey. Christine Moorman/CMO Survey
That’s reflected in a 74%
increase in social media marketing budgets since February 2020 – a rise from
12.3% to 23.2% of total marketing budget. That shows an important shift in the
perception of value of social media among marketing leaders, reversing a
sceptical trend that’s persisted for the past few years.
Agility and Improvisation will lead to success.
The COVID-19 pandemic
caught everyone by surprise, including marketers. The economic downturn has
already resulted in a 9% reduction in marketing jobs with more likely to follow.
The largest majority of marketers (24%) anticipate these jobs will never
return, with 19.2% of marketers expecting these jobs to return in 6-12 months
and 19.9% expecting them to return 1-2 years from now. This suggests that the
departments will have to do more with less. Marketers revealed that marketing
employees are being assigned to work for the online promotion of the company,
developing new promotional strategies, and reaching out to existing customers.
Figure 5: Marketing Employees' tasks during the pandemic
according to the June, 2020 CMO Survey. Christine Moorman/CMO Survey
The pandemic also drove
home the importance of agility and resilience in the face of unforeseen events.
Most of the marketers considered themselves and their organizations unprepared
for the events that emerged, and expect to invest more in training to develop
improvisational/pivoting skills, innovation, creative thinking and managing
uncertainty within their workforce.
Marketers also believe that
they missed some opportunities, suggesting their organizations have not taken
full advantage of market research, customer acquisition opportunities or new engagements,
and may have been too conventional in their willingness to experiment with new
tactics and approaches.
Marketers’ key objectives
during the pandemic are building brand value that connects with customers and
retaining current customers, more than improving ROI or even customer
acquisition. Considering marketing opportunities, marketers shift resources toward
building better customer-facing digital interfaces, transforming their business
models, expanding into new offerings, and building partnerships over new
markets, new capabilities, new automation, and data integration. Marketers
believe these strategies will be noteworthy long-term opportunities for their
companies.
Figure 6:Marketing objectives during the
pandemic according to the June, 2020 CMO Survey. Christine Moorman/CMO Survey
Overall, marketers are considering
the pandemic as an opportunity to demonstrate value to their organizations,
especially in industries that are desperate to rebuild customer engagement in a
world where traditional in-person channels are significantly curtailed.
Based on these findings of
the survey, we can say that if marketing organizations learn the lessons from
the past few months, we will see greater investments in digital outreach and
digital experience, more social engagement around contemporary issues and
values, and more internal importance on creativity and experimentation in the
months and years to come.
Author- Sameer Shaikh
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