For the past few months the dominant global conversation has been about the coronavirus (Covid-19), and while cool, rational, and informed heads should prevail to provide responses and strategies, the absolute opposite is true. Depending on what you read, or watch, we are headed for an armageddon, the likes of which we have never seen. Not only is that absolutely ludicrous and historically inaccurate, it just one example of the widespread proliferation of panic and fear, that does absolutely nothing but create a negative, reductionist mindset.
The impact of the fear can be clearly seen. Financial markets are taking substantial hits, communities and indeed nations, such as Italy, are going into self-imposed lockdown. Football games in Europe are being played in empty stadiums and there is talk of postponing the upcoming Olympic Games. In New Zealand, where a part of our economy is driven by tourism, dwindling visitor numbers have impacted on Air New Zealand’s mid-term plans for expansion and even their CEO has taken a quarter million dollar pay cut.
It’s important to remember that economies move in cycles – up and down, buoyant and falling, boom and bust. That’s entirely what they have done since their creation. There has not been a global recession for well over a decade and indicators suggested we were due one, even before the rising fears of a global pandemic. While the Global Financial Crisis created economic mayhem in other countries, New Zealand was largely unscathed.
Consumer confidence and sentiment is a huge factor in how economies perform and currently the fog of doom that is the coronavirus is impacting on that. SO what do business owners need to consider when faced with a tightening of the economy based on constricted consumer spending? Well, firstly – they need to make a measured and comprehensive analysis of spending and then plan out where to trim costs, while ensuring that their customer base still grows.
The one cost that deserves absolute attention is marketing, because marketing is the bridge that spans the gap between a business and potential customers. Marketing is the last cost to cut, never the first. Why? Well it’s simple, without customers, a business may as well just close its doors.
Online reputation marketing is the most valuable marketing platform available and those reviews from past customers are like gold dust when growing a business, or coping with an upcoming, or actual recession. Which businesses do you imagine consumers will choose when they are even more careful and discerning about their spending? It is the businesses who have marketed their reputations and continue to do so. When the dust settles after a diminished economic cycle, businesses that have committed to their online reputations will still be trading and will also be in the best position possible for the next stage of the financial journey.
So, panic and ill thought out responses are as unhelpful in business as they are in life, when faced with challenging times. If costs need to be cut, then it’s the new truck (or trucks) the new computer upgrade, the new uniforms. Ensuring that consumers still spend is absolutely essential and they are driven to do that by one thing and one thing alone – online reviews.