As marketers move beyond crisis mode, Kevin O’Farrell explains how to improve brand effectiveness post-pandemic with scenario planning and advanced analytics.
Millions of retail stores closed, the footfall of billions of people missing from the empty high streets, and the colour on last season’s clothes slowly fading away behind smudged glass. Nobody was expecting this in any way. The Spring of 2020 will forever be remembered as the Spring of Corona.
Ever since the outset of the COVID-19 crisis, brands across all verticals have had to quickly adjust their business and marketing plans, revising expectations across the board, which poses unique marketing measurement challenges. Many have managed to adapt to crisis mode, but now that we are moving into recovery, brands are facing new questions: how do we evolve and thrive in the unknown with so many forces at play; how to capture the impact of COVID-19?
Scenario planning can serve as a foundation, especially during the recovery phase, by identifying each of the key drivers of performance, including sales channels, but also operations, competition, and other non-controllable influences, and understanding historical sensitivity to those drivers.
Many marketers will now say that marketing measurement relies on historical data that can’t be used at the moment. And yes, working with historical data only provides so much as these times are so unprecedented. But whilst the future may not perform the same as history, that doesn’t mean we can’t use knowledge and apply reason to create an accurate vision of the future. Use that historical knowledge and expertise as a starting point from which you can flex and adjust, being sure to incorporate the latest data while leveraging your network of experts to help identify what’s likely to change and what can be influenced.
The focus needs to be on brands being agile and – where available – using live data to constantly run simulations/scenarios of where to shift efforts. In most scenarios, we are looking at reductions in spend often accompanied by shifting media channels, or delivery channels in the case of Quick Service Restaurant (QSR) brands.
Overall, brands need to consider consumer mobility and purchase habits, media supply and demand, an economic downturn, and the public health crisis. All of these, to varying degrees, are contributing to behaviour change and differing brand interactions. The economic impact of COVID-19 will continue well into the future – it took four years for the economy to fully rebound from the 2008 recession – so it is imperative brands think longer term, and not just short-term.
To recover quickly and in full force, brands will also need to understand which activities and messages they should push and how they should push them. They will need to stay alert to changes, constantly assessing budget cuts, changing their channel mix, messaging, as well as operational factors such as store closures and consumer demand shifts. A robust model framework with a holistic view on all drivers will help them monitor business performance on an ongoing basis.
In terms of advertising, one campaign may be cancelled while another might be ready to shoot as soon as lockdown restrictions are lifted, so it is only slightly behind schedule. Then scenario planning can help identify the best creative mix and scheduling strategy. Another brand might go with the digital marketing and e-commerce flow because they’re uncovering a massive shift in consumer behaviour. And brands that can afford to invest in brand equity should certainly do this as there is huge potential during times of downturn.
For one of our clients who had to temporarily close their stores, scenario planning has become vital in the current surroundings. With forecasting/simulations, we allowed them to explore the range of media contribution depending on their changing base drivers, in this case: store openings. They can see how any number of stores open, no matter if 5 or 500, will contribute to sales, allowing them to plan strategically better and adapt to the constantly changing environment.
Depending on the company and sector in which it operates, variables will obviously change. But the goal of scenario planning remains for all to identify where the impact of COVID-19 may be and gauge the order of magnitude compared with the expectation. With ongoing updates, brands can quickly identify any external or macro trends that might affect the business, evaluate marketing, messages and channel mix and quantify the impact of both controllable and non-controllable factors on the business. They will also be able to refine their data and prepare for a more data-driven future.
There are many versions of how companies will perform in the future months and years and the key to scenario planning is to consider these multiple sets of possible futures. Every business has been disrupted by COVID-19 to some extent. In this chaotic state, data and analytics become even more important and measurement approaches must adapt. The idea isn’t to simulate a specific forecast number exclusively, but to have a forecast with a sense of upper/lower scenarios such that you can track as time marches on.
The Spring of Corona is almost over, but the Summer of Brand Strength and Potential is ahead of us. Stay agile and start planning in every direction now to emerge stronger for the years to come.