Brand new ball game

AS the Covid-19 pandemic landed blows on the automotive industry, online used car marketplace Carro saw the number of users on its blog more than double from April to May. It wasn't that people were getting more interested in buying cars. In fact, the number of new vehicles registered in Singapore dropped from a monthly average of 7,200 in the first quarter of 2020 to just 1,646 in April, according to official figures. But Carro caught on early that its customers' concerns were rapidly changing. Google trends data showed that there was a significant drop in search enquiries for "sell car" and "buy car" in Singapore during the "circuit breaker" period; on the other hand, search volume for "car covid" overtook the two search enquiries on March 28.

"We decided that instead of spending on advertising (to get people to sell or buy cars), we will spend on creating informative, sharable content for drivers," says Manisha Seewal, group chief marketing officer of Carro. "This is not the time to blast insensitive promotions, but to empower customers with relevant information."

The startup began rolling out a series of posts and videos on how drivers can adapt to the Covid-19 situation. For example, a post titled "Covid-19 Circuit Breaker: Important information for car owners" touched on issues such as the Electronic Road Pricing system, car loans and deferment of installments, and vehicle deregistration.

As a result, Carro's blog recorded a 154 per cent increase in users, a 150 per cent increase in sessions and a 130 per cent rise in page views.

"Given that 92 per cent of car buyers research online before they buy (according to data insights platform Think With Google), producing relevant, up-to-date content is critical for any brand. While actual transactions are low right now, we believe that they will bounce back once movement restrictions are gradually eased," says Ms Seewal.

Other sectors have similarly had their sales affected by Covid-19 restrictions, but nonetheless continued to find ways to engage customers. Many property developers, for instance, have turned to organising virtual tours for prospective buyers. Online marketplace PropertyGuru has launched a campaign to help people displaced from their homes find shelter.

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Marketing is typically one of the first activities to be slashed as companies rush to conserve cash in an economic downturn. But research suggests that such a move might equate to hitting the panic button.

A 1999 analysis of nearly 1,000 businesses showed that those that increased their marketing spend during a recession were not significantly less profitable during the downturn. And in the first two years after the recovery began, their profits rose by an average of 4.3 percentage points, while companies that had cut marketing spend saw profits fall 0.8 percentage points.

In those two years, businesses that had increased marketing efforts also gained market share almost three times as fast as those that had slashed marketing spend. The study was conducted by PIMS (Profit Impact of Market Strategy), a long-term business analysis project, based on financial data of companies in North America, Europe and other parts of the world.

Two decades on, those broad conclusions still hold. An analysis published in April 2020 by consultant Peter Field, using data from the UK's Institute of Practitioners in Advertising, turned up similar findings about companies during the 2008 Global Financial Crisis.

When competitors are holding back on marketing and branding during a crisis, that's when a company has a chance to overtake them without needing to spend extravagantly, says Ang Swee Hoon, a professor of marketing at the National University of Singapore (NUS). On the flip side, market share that has been lost can be very difficult and costly to recover.

The emotional factor

In times of crisis, companies need to adopt a strategy that combines emotional sensitivity and financial prudence. In a period where customer anxiety is at an all-time high, companies must explain how its products and services address issues related to physical and mental health, job security, business and family.

"Your prospects do not just want to know how good your products and services are," says Jacky Tan, chief executive of marketing agency Jack And Chaz. "They want to know exactly how effective the products and services are in solving their current problems caused by Covid-19."

Take, for instance, a lighting company that helps other businesses save electricity. Its corporate customers may now face job cuts and potential business losses due to the crisis. The lighting company should keep in mind that leaders who cherish their employees may want to know more about how energy-saving products can reduce their operating expenses, so that they will not be forced to retrench their staff, says Mr Tan.

Executed well, a good marketing strategy can help draw new sources of income for the company even in a crisis. Pest control firm Origin Exterminators had three to four months of cash runway left in January, and was at risk of having to lay off staff if revenue fell further.

Because of the virus outbreak, it had to cut down activities and reduce prices for some of its biggest corporate clients, those in the hard-hit travel and hospitality industry.

The firm turned to marketing its disinfection services to corporates and government agencies. It highlighted that the disinfectant it uses has been proven to be effective against the virus. It reminded potential clients that the treatment carried out by a team of trained experts can help protect workers and reassure customers.

To top it off, the company decided to donate S$10 to the Community Chest for every disinfection treatment carried out from April 1 to June 30 as a show of goodwill. As a result, revenue has been stable (setting aside contingency for bad debts) despite income from the pest control business dipping 20 per cent, according to director Winston Baptista.

The math of marketing

How crucial is marketing for a company now? It depends on how much demand Covid-19 has created for its products or services. For example, baking and cooking products, healthcare products and personal insurance offerings have all seen a spike in demand, but the insurance industry would need to step up marketing efforts in order to differentiate itself from competitors.

For sectors that have been impacted by the pandemic, the amount of marketing required depends on how obviously the product or service addresses problems caused by Covid-19.

For instance, a tuition centre might have to frame its services in a way that reassures parents that it can still provide the same standard of education. But a publishing company would need to take it one step further and convince companies why it is beneficial to spend on advertising, especially when the business has been financially impacted, Mr Tan says.

Whichever industry the company is in, the principle of empathy amid crisis still applies. Symphony, which provides a digital collaborative platform for clients in financial services, saw daily active users rise 42 per cent in Q1 due to safe-distancing measures. Still, it avoided opportunistic plays and did a huge campaign around business continuity. "Right at the start of the pandemic, we put in place some guiding principles for marketing during Covid-19," Andrew Hoerner, Symphony's chief marketing officer, says. "One of those was: 'Be helpful'."

When times are hard, it pays to identify who one's loyal backers are. "The idea here is to identify opportunities to create some shared value with them," says Chris Riley, group chairman (Singapore & Malaysia) of Ogilvy.

Such a strategy has been paying off for lifestyle firm Spa Esprit Group, which had to close 83 - or 87 per cent - of its stores globally as cities went into lockdown.

The operator of beauty chains Strip and Browhaus launched an online campaign in Singapore, focused on encouraging customers to support their favourite outlets and therapists. It featured promotions on several of its most popular service packages, with a "buy now, pay later" option.

Spa Esprit Group also targeted new customers with new beauty services. With those efforts, online revenue jumped four times in May. "Coupled with advance appointment booking through our online portal and call centre, it has allowed us to drive and secure traffic to our stores the moment our doors open," says Samantha Ong, marketing director of the group's beauty division.

The digital revolution

When the Covid-19 crisis struck, digital marketing agency First Page Digital began receiving an increasing number of enquiries from traditional business owners looking to digitalise.

"Many businesses previously running print ads, outdoor ads, trade shows and events are now coming to us to channel their budget to digital efforts," says general manager Shane Liuw.

Advanced technology differentiates this downturn from previous ones, he adds. "Consumers are still spending while at home, and one of the most effective ways to reach them is through digital marketing."

Even businesses that rely on their customers' physical presence found ways around lockdowns and safe distancing. Theatre and film companies around the world - such as Shakespeare's Globe in London and Wild Rice in Singapore - live-streamed recorded performances for free, in the spirit of bringing people together during a period of enforced isolation.

Notably, such an initiative encourages donations and significantly lowers the barriers for newcomers to get acquainted with the arts.

NUS' Prof Ang emphasises that the longer people stay at home, the more crucial it becomes for businesses to digitalise. Even those from the "baby boomer" generation, who are traditionally walk-in customers, are developing new habits of shopping online out of necessity.

Furniture retailer Scanteak, for one, made a big shift towards an omnichannel strategy. For the past two years, the company derived only about 3 per cent of sales from e-commerce. Its website focused less on transactions, and more on directing people to its physical stores.

All that changed in a flash when Singapore's circuit breaker kicked in. Scanteak began marketing its products online with a work-from-home and stay-home slant. It rejigged its website so that users get to the sales page in just one click instead of two to three. Recognising that furniture-shopping is typically an in-person experience, a platform with 80 live chat agents was engaged to address customer concerns around the clock.

With many businesses on a digitalisation spree, how does one stand out in a crowded virtual world? It all boils down to technical knowledge of digital tools, targeting specific audiences and using creative advertising, according to Mr Liuw.

Power of community

Covid-19 has forced people to isolate themselves; yet, the power of community has never been more keenly felt.

Ground-up initiatives have appeared online, such as campaigns to help vulnerable businesses and individuals, virtual support platforms, buzzing interest groups and much more.

It is this same power of community that has helped to keep many brands alive and relevant through the years. Instant Pot, the multipurpose pressure cooker brand, spent its dollars on building a cult following of people who share their instant Pot experiences and recipes with each other on Facebook. This community loves its Instant Pots so much, some members knit sweaters for them.

Beloved toy brand Lego was on the verge of bankruptcy in the early 2000s before it turned its fate around and overtook Mattel in 2012 to become the world's most valuable toy company. Lego owed a huge part of its success to a new process that built products based on feedback and inspiration from the community.

When the going gets tough, companies need a team of passionate allies who will show up for them and each other, says Kai Elmer Sotto, co-founder of community-builder People & Company. The consulting firm, which did extensive research into brands like Instant Pot and Lego, has worked with marketing teams at Nike, Porsche, non-profit environmental organisation Surfrider and venture capital firm Wavemaker Partners.

"Almost every company needs a community now more than ever. It helps you identify your most passionate allies and treat them with care and not risk losing them to your competitors," Mr Sotto adds. But as much as communities feel magical, they do not form by magic, he stresses.

When yoga studio chain Yoga Movement started out eight years ago, it built the brand around accessibility and community. Today, every studio has spaces for people to hang out. The company frequently posts articles about members of its community - dubbed the "YM FAM" - to share stories of their yoga journey and their lives outside it.

Yoga Movement was forced to shut all its studios as the virus outbreak worsened. One of the first things it did was to collaborate with other companies to give perks to its members.

As intuitive as it may seem, online live classes were not something that Yoga Movement jumped on immediately. But in its interactions with clients, the idea kept coming up. The company eventually launched live classes on April 25, capping them at 18 students.

"Because of the existing relationship we have with our regular clients, the support was overwhelming... Classes were booked out within 20 minutes of their launch," says Collette Miles, creative and content manager at Yoga Movement. "Given the demand, we didn't see the need for any paid marketing."

This effect happens when companies build products and services together with a trusted community, instead of for them. "Co-owners act differently than standard customers. If you've misjudged trends, co-owners will tell you," says Mr Sotto.

Since the launch of live classes, Yoga Movement has seen over 3,700 virtual attendees and has increased the number of classes from 21 to 75 a week. "Most of our YM Live attendees are current clients, and that's why we stand by the principle of community - these guys always have our backs. We learnt that people want to pay for discipline and community," Ms Miles says.

Small local companies and home-based businesses in Singapore are increasingly discovering the importance of this concept. Though they typically have little or no budget for marketing, the tools of social media have allowed them to build a base of followers who rally around them in times of need.

Features on Instagram such as the re-sharing of posts, quick polls and question-and-answer formats give customers a voice and visibility, as well as the shared experience of helping to lift a fledgling business off the ground.

Be ready for pent-up demand

Even as companies deal with the impact of the pandemic, they should train one eye on consumer trends in a post-Covid-19 era, industry observers say. "It is also important at this point to prime the pump for a recovery, identifying the products, services and audience segments that will benefit from pent-up demand. We have already seen record luxury goods sales for certain Louis Vuitton stores in China as they emerge from certain restrictions," says Ogilvy's Mr Riley.

While this may contradict surveys that indicate a greater consumer awareness of caution, it also demonstrates a bounce back to shopping behaviours that have been suppressed for a period. "If companies are not ready for when the sentiment shifts happen, they will lose out to more agile competitors," adds Mr Riley.

Even in the worst-hit industry of travel, cooped-up consumers are now dreaming of or planning for their next holiday destination when the whole crisis is over. "It is actually a good time for businesses in the travel industry to bear that in mind and plan for when international travel opens up. Doing more digital marketing to keep the brand in consumers' mind is a smart thing to do as well," says First Page Digital's Mr Liuw.

As the pandemic and economic downturn stretch out, significant lessons will be thrown up for marketers. Trends that industry players are keeping a close eye on include building and articulating a company's purpose, and using innovative technology to reach people and connect them.

"There has been a lot of discussion around brands with purpose during the past few years, and this will have helped to distinguish those with enduring, strategically anchored purpose and those who pay lip service," says Mr Riley. "It will be the brands that matter to consumers that will emerge stronger."