Okay, Now What?
A few weeks ago, the “What’s Next?” blog was focused on the CARES Act, which included the Payroll Protection Plan (PPP) and Economic Injury Disaster Loan (EIDL) and was being voted on by Congress and administered by the Small Business Administration (SBA) to help small businesses survive during a time when they were all forced to close.
The CARES Act passed. Okay, now what?
The PPP launched with a number of issues.
- There was uncertainty about how to apply,
- The actual application changed multiple times
- Some banks built a portal to the SBA to rapidly process the loans, while others hired employees to enter each app by hand.
Needless to say, banks were inundated with applications, and some chose to only help current clients rather than take on new clients. The heroes in all of this were the community banks that stepped up and helped every small business that they could. The larger banks (most of whom received Federal bailouts during the Great Recession of 2008) only helped their high-wealth clients leaving the small businesses without a way to get any assistance at all. Within two weeks, the fund was empty, and thousands of small businesses received nothing leaving tens of thousands of small businesses without any assistance whatsoever.
Turns out, there wasn’t enough money to go around to all of the small businesses that needed it because of these large publicly traded companies that took advantage of the money available in the PPP, even though these large companies could get assistance in other ways.
The PR backlash was swift, and some of those companies have returned the money. The Treasury Department has determined that these companies should not have been able to access the funds and are demanding it is returned by May 8th. Hopefully, with round 2 of the PPP now available, thousands more of small businesses can get the assistance they need to survive.
One of the provisions in the CARES Act is a generous $600/week federal stipend added to the state unemployment benefits. This means that, depending on the state, some people are receiving almost $1,000 per week in unemployment. Coupled with their stimulus check, some employees are not feeling very motivated to go back to work when their employers, who have now received the PPP, are ready to rehire them. A few articles have started to suggest that unemployment offices will be looking at people who turned down employment opportunities and stopping their benefits accordingly.
So what are you doing for your business?
We’ve seen so many businesses developing survival-growth strategies. Whether it is a restaurant transitioning to curbside service, DJs streaming from home, or hair salons selling hair care products to help their customers until they can get in the chair again, every business is having to make changes (some big and some small) to survive.
You are not the same company you were last year, so the company will you be next year is going to largely depend on the changes you make now. If you aren’t sure how to survive, or even thrive, in this time, let’s start with the basics of branding:
Focus – Who are you talking to?
- Is your target audience going to change?
- Can you take this time to build up your customer relationship manager (CRM) database?
- What are you doing to connect with previous customers?
- How are you pinpointing new customers with new opportunities?
Connection – What is your message?
- Your old messages will not work right now.
- You HAVE to turn off any scheduled posts that aren’t addressing the current environment.
- Any “charity” that you are providing is NOT a chance to pat yourself on the back.
- Be sure to focus on authenticity and what is really happening.
- More than ever, customers are going to be looking for products that are made in the US.
- As always, you want to stand out, not blend in. Do your best to avoid sounding like all of the “Covid Commercials”.
Harmony – Where are you putting your messages?
- Who you are talking to will determine where you put your message.
- Be sure to pay attention to where your target audience is spending their time – has it changed?
- Have you maximized your online presence?
- Are you engaging in social media?
There is historical proof that companies who continue to connect during a financial crisis can grow through these challenges. Everyone has the ability to spend money or time (or both) right now. How are you spending yours?
There are benefits to marketing when your competition isn’t.
- Target new customers
- ‘Category Clutter’ will be dramatically reduced, so now you can stand out
- You can project corporate stability
- It’s a buyer’s market for added value spots
- Maintain your share of mind/share of voice
Of course it is crucial that your message actually stand out and not blend in
History of advertising in a crisis:
In the 1920’s, Post Cereal was the category leader but during the great depression they cut back on their advertising. Kellogg’s doubled their ad spend (especially radio), introduced Rice Krispies, and profits grew by 30%. Kellogg’s became a category leader and they still hold that spot 100 years later.
In the 1990’s, McDonalds pulled back their advertising and promotions budget during a recession and their competition seized on the opportunity. Pizza Hut increased sales by 61% and Taco Bell increased by 40% while McDonalds declined 28%.
In 2009, Amazon used their technology and processes to lower prices and make it easier than ever for people to shop from home. Consequently, they grew 28% during the great recession.
In the immortal words of Sam Walton, when asked ‘What do you think about a recession?’, he replied, “I thought about it and decided not to participate”.
So how can your company adapt and grow during this time?
RUSSO is a strategic branding agency that uses consumer insight to change the conversation; forming emotional connections with the target audience. To learn more, click HERE to learn more about our process, RAZOR BRANDING.