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SUMMARY:
These are difficult, unsure times. And I am ill-equipped to comment on the current health crisis. But the economic crisis — this is what we marketers were born to battle. This is your chance, in your career, to really put your skills to use and make an impact for everyone working at your company and your clients’ companies. To spur ideas for how to achieve this seemingly impossible task, in this article we bring you six ways brands, entrepreneurs and marketers are responding to COVID-19’s economic fallout. From booze to bistros, from recruiting platforms to wholesale distributors, marketers and entrepreneurs are fighting back against the mounting economic difficulties. Read on to learn from their early successes. |
by Daniel Burstein, Senior Director, Content & Marketing, MarketingSherpa and MECLABS Institute
(As seen in the MarketingSherpa Marketing newsletter. Click to get a free email subscription to the latest from MarketingSherpa.)
After publishing last week’s 8 Examples of How Business Owners and Marketing Leaders Can Respond to the Coronavirus COVID-19 Pandemic, a MarketingSherpa email subscriber wrote in to say “I/WE APPRECIATE IT! Anything/idea will help right now!”
MarketingSherpa usually focuses our content on a variety of evergreen topics. But since the need is so great, we are going to take another look (through a bit of a different lens) at proactive companies and marketers who are addressing the economic fallout caused by the novel coronavirus outbreak.
As Pablo Picasso said, “Learn the rules like a pro, so you can break them like an artist.”
While many companies seek to respond to COVID-19 and the economic devastation it has wrought by pivoting their value proposition, the first questions you should ask are — what is your company’s current value proposition? And how well is it being communicated?
Many companies have a value prop that is poorly defined. Their employees, agencies, suppliers and partners do not understand what the value prop is. So they don’t communicate it well. And they don’t ensure the customer gets the right value experience through product and service delivery.
Heck, sometimes co-founders don’t even see eye to eye.
Even when marketers, agencies and freelance creatives do understand the value prop, the marketer’s blind spot can prevent them from communicating the value prop clearly through the company’s advertisements, landing pages, emails, etc.
To help you do just that, Flint McGlaughlin, CEO and Managing Director, MECLABS Institute, recently presented a three-part series entitled Use Your Value Prop to Pivot: Conversion optimization examples to help with marketing amid coronavirus. (MECLABS is the parent organization of MarketingSherpa).
We’ve embedded Part 1 below in case your company needs some helpful ideas in this area:
Every product set is made by assembling core building blocks or ingredients to build a final, saleable offering. This is true for physical goods, but services as well. For example, when an ad agency makes a newspaper ad, you could also break it down as strategy + concepting + writing + photography + design + copyediting + media placement + client management + traffic management = print ad.
If the products you’ve made with these building blocks aren’t as in-demand or necessary today, how could you reformulate those ingredients with the same skillsets to create a new product?
Here is a straightforward, physical example. Canadian alcohol company Ripshot normally makes pre-filled, tamperproof shot glasses.
When the company’s leadership heard the World Health Organization (WHO) and Health Canada request more hand sanitizer, Ripshot’s leaders realized they had the fundamental ingredients to make a pivot in their product. So now, they are making hand sanitizer. 
“We are donating a large portion of this product to those in need. On the flip side, we are also working with government organizations and retailers and delivering this product at cost. We truly want to keep our distillery staff employed and not lay them off. Prior to this pivot, we were looking at temporarily shutting our doors. Most of our sales are through on-premise locations such as festivals, weddings and sporting events, which are currently on hold,” said Sarah Konowal, Co-Founder & CEO, Ripshot Enterprises.
The company also updated its homepage to communicate the change to visitors, saying, “In response to the COVID-19 global pandemic and in partnership with Health Canada, we have made a strong pivot to answer a nation-wide and global call for help in hand sanitizer production …”
Creative Sample #3: New website popup messaging for alcohol company
While the company’s motivations seem mostly altruistic, I did ask Konowal the benefit from a business perspective. “We hope that these initiatives expand our core alcohol business in the future. Either by way of brand recognition or from some of our newfound partners,” she told me.
Texas-based BuzzBallz made a similar pivot. After the WHO and the U.S. Center for Disease Control and Prevention (CDC) came out with a hand sanitizer formulation and waived the necessity to have a permit to manufacture it, the company realized it has most raw materials and was vertically integrated with the correct equipment. Once it tracked down 100% glycerin, it made a batch and started by donating to its local community hospitals and other private organizations that were in critical need. Then, batches were sent to the Air Force, Army and COVID-19 first responders.
But since the government isn’t allowed to take freebies, the pivot also helped save the business by bringing in revenue.
“Right now we are donating. However, if in the next couple of weeks there is a bigger demand outside of those 18,000 gallons we made — we will consider shifting our business operations ‘carefully’ to make more. ‘Carefully’ because I totally expect that the big hand sanitizer companies will eventually ramp up and make sanitizer for sale and there won’t be a shortage or need for me to make/sell it. And, I don’t want to get stuck with a bunch of hand sanitizer when my main line of business is making booze,” said Merrilee Kick, CEO, Buzzballz, LLC.
When asked what advice she would give other leaders, Kick said “As for employees — CARE. You have to give them an out — if someone feels sick and doesn’t have PTO, they need to express that hardship to HR and make sure the company can sort it out. It’s better to have one person home sick than the whole company … We have a team for COVID that meets daily, discusses any current illnesses, disburses PPE [personal protective equipment like masks and gloves] and has plans to keep employees safe including social distancing … We are doing little things like making take-out lunches for our crew every day, filling their cars with gas and giving hazard pay.”
Many products and services require actual, physical human interaction or rely on people congregating in a specific area — like at an event or office. Right now, and for an indeterminant amount of time into the future, that is impossible for most of the world’s citizenry.
So how can you pivot your company’s value proposition to still deliver value? Here’s are some examples to spark your thinking.
InternX is a university recruiting platform that connects employers and students at in-person career fairs. “As a startup, we began to feel the real impact of Coronavirus affecting us when universities began closing. A main part of our services is providing a platform for employers to pre-select students to meet with at in-person career fairs, so the concept of no open universities to host career fairs took away part of the foundation of our company's purpose,” said Billie Patterson, Marketing Director, InternX.
The team discussed viable options to pivot its value proposition and decided to shift its focus to providing virtual fairs. It already had the platform to create the employer-student connections; it just needed to build a component to host these virtual meetings once recruiters selected the students they wanted to meet.
"The challenging part of this pivot to a new value prop was evaluating what projects we needed to postpone and which ones we needed to add to continue providing to our clientele. At the end of the day, our focus question on whether we should cater to developing resources for this current state-of-affairs was ‘Is this something we can create that will be beneficial not only now, but will also be significantly useable post-Corona quarantine?’ While we have to be strategic with how we spend our time and money as a startup, we also know universities would be more inclined to work with us in the future if we could adapt to the new demand for ‘virtual career fairs,’” said Nicholas Bachewicz, CEO & Founder, InternX.
“Even when Coronavirus begins to decline, there will most likely be a cap on large gatherings [plus] in the future, the virtual component can be continuously used in case of extreme weather cancellations or any other issue that may unexpectedly arise,” he said.
Sales opportunities had gone down to zero for spring career fairs and fall career fairs with the emergence of COVID-19. With the new value proposition, the company has been able to continue half of the university partnerships and onboard four more university clients they didn’t have before.
“Creativity, flexibility and persistence are crucial in times like this. Our company was centered around in-person connections, and colleagues were commenting on what a terrible time it had to be for InternX. If we had that mindset, we'd still be stuck and worried. Instead, we went from limited business opportunities during this pandemic to a plethora of options for now and the future!” Patterson said.
What happens when your value proposition relies on sending physical packages to business addresses? There’s no point to send the package to an empty building. Sending platform Sendoso pivoted to allow companies to send gifts to home addresses instead of a business address with verification that the home address is the correct address — the sender is now able to select an option to have the recipient confirm their address before anything is shipped. Sendoso handles the outreach through email.
“We understand that data privacy for B2B versus B2C are very different worlds: Just because you have someone’s business address does not mean they would want you to have their personal address. With this in mind, we have included messaging [and] functionality that alerts the recipient that the address is only shared with our sending platform — not with the sender — and the address data is deleted once the transaction is complete. This ensures that personal remains personal, increasing the likelihood of a recipient updating their address,” said Dan Frohnen, CMO, Sendoso.
Initial testing of the feature showed a 63% email open rate, and 60% conversion where the recipient would specify a different address than the one that was on file. The feature has been live for a week now, and customers are reporting anywhere from 30% to 90% conversion rates. “It’s highly dependent on how targeted your approach is and what the offer is,” Frohnen said.
SnackNation pivoted from delivering snacks to the office to offering Work-From-Home Wellness Boxes. The company created a whole new homepage, lead funnel, and lead scoring model, and deployed new PPC campaigns. The value proposition emphasized the need for employees to feel connected, cared for, and appreciated with healthy snacks that would fuel their productivity.
The company has already sold 10,000 Work-From-Home Wellness Boxes to more than 130 companies. The team feels there may be other upsides from this pivot as well, like creating inroads with new customers who might not have considered the office offering but might down the road after discovering the remote offering. In addition, since boxes are going directly to employee homes, it has also increased brand awareness with in-office consumers who may have enjoyed niche brands such as Peeled Snacks, RXBAR, 18 Rabbits, Eat Your Coffee, Pure Organic and more without realizing these snacks were actually being delivered by SnackNation.
“You have to take a customer-centric approach. The first step is to ask yourself, ‘What challenges are my customers facing right now that I can solve?’ We knew there was this sudden, mass migration from the office to the home. Companies suddenly had to solve one big problem — how do I pause the office and set my employees up for remote work success? We developed an offering and stood up a product in just a few days to address this need,” said Sean Kelly, CEO & Co-Founder, SnackNation.
Some forms of product delivery are more than just getting a product physically to a customer, they are a customer experience in and of themselves, vital elements of value delivery. For companies focused around that customer experience, key leaders may have a mental block of sorts when considering a value proposition pivot.
Which brings me to a story from San Francisco, one of the first American cities to get a shelter-in-place order.
RÊVE is a classic French bistro in the San Francisco suburb of Lafayette. “My husband — a classically trained French chef — and I are the owners. We offer sit-down dinner only, Tuesday to Saturday nights. My husband doesn't like the idea of to-go. French enjoy dining ... and that doesn't translate to take out,” said Laura Magu, Owner, RÊVE.
But the week before the official shut down, the French restaurant already saw a 25% decrease in business.
“I had a gut feeling the shut down was coming soon. My husband and I discussed we had to offer take out to survive. When the shut down in California was announced, I had 12 hours to act and re-create our business model,” Magu said.
She jumped on the phone and ordered a large banner with the words "Take out and Delivery" and the restaurant’s phone number that was ready in two hours from a local company.
Creative Sample #4: New take out and delivery sign for French restaurant
Then Magu ordered 600 “nice” takeout containers from the restaurant supply store.
Finally, she turned to a tool many reading this article probably find more valuable than ever during this time — email marketing — to the restaurant’s list of more than 4,000 email subscribers. The email said, “’We're making lemon-aid!’ and announced our new plan of take out, delivery to those who can’t leave, and a message of hope that we will get through this,” according to Magu
Note that this wasn’t just a random one-off email. Magu has been nurturing this list for years and engages them on a weekly basis, a list Magu calls “our tribe of raving fans.”
Typical revenue for the restaurant is about $26,000 to $29,000 per week. The first week of take out, they did $15,000 in business. The second week, they did $20,000 — “$5,000 coming from my husband’s famous cassoulet, which, if we offered again, probably wouldn't generate as much revenue,” Magu said.
“So, yes, revenue is down, but we're making payroll of those who are working,” she said.
When asked if she had advice to share for other marketers and companies, Magu said, “We're entrepreneurs, not victims. No matter what challenge your business is facing, look for a way that you can help your customer solve an issue they're facing — and together you solve a problem.”
Your product may still have a forceful value proposition, but the people who were your ideal customers are no longer able to purchase it.
For example, Cheetah, an e-commerce platform for restaurants and small businesses, has delivered wholesale food and supplies to restaurants using its fleet of 100 refrigerated trucks since 2016. Cheetah carries everything from bakery items to beverages, cleaning products, dairy, meat, poultry, seafood, fresh produce, condiments, snacks and paper supplies.
However, those customers — restaurants and small businesses – just don’t have as strong of demand anymore.
So the San Francisco-based startup pivoted its business model to support consumers by opening up its wholesale services and facilities to give Bay Area communities access to the supplies they need. In response to COVID-19, Cheetah turned its trucks into mobile micro-fulfillment centers. Consumers can now place their order through the mobile app and pick it up the next day from a Cheetah truck parked at one of several locations across the Bay Area. The company has been testing the service — Cheetah For People — with consumers, retirement homes, assisted living facilities, animal shelters and homeless shelters in the San Francisco area.
Customer service agents are available to help when consumers are placing their orders, which are available for next-day pickup. Once the order is completed, each customer is given an order number and can choose a three-hour window for safe, contactless pickup, from a designated pick-up location.
“Absolutely happy with the ease of pickup, the feeling of security in regards to coronavirus protection —nobody came close to my car except to load, everyone was wearing gloves, and nobody was close to each other,” customer Stephanie Firestone said.
Creative Sample #5: Wholesale restaurant distributor delivering food to consumers
In its first week, Cheetah processed $72,000 in consumer sales from 450 new customers. This week, Cheetah is expanding its pick-up locations to Lafayette and San Jose.
“I’m in the camp of people who think this is going to be a massively disruptive event and we all need to be really thoughtful about what the long-term impact is likely to be. My advice for business owners is to take a blank piece of paper and plan forward from scratch. Focus on opportunities in this new environment, rethink your spending, shore up your cash however possible and assume it will be quite a while before you can raise capital from new investors. We’re fortunate we raised funding in our Series B in 2019,” said Na'ama Moran, Co-Founder and CEO, Cheetah.
Danville, California-based Choicelunch had a similar challenge. It used to be in the business of delivering school lunches to thousands of kids around the Bay Area, but business came to an abrupt halt with the coronavirus crisis and the closure of schools.
Choicelunch’s annual revenue is around $27 million. “March was supposed to be our biggest month ever, and biggest of the year. Revenue crashed to zero dollars over 3 days,” said Justin Gagnon, CEO and Co-Founder, Choicelunch.
Gagnon told me relying on marketing fundamentals was key in this crisis for his team.
“A quick and simple SWOT [strengths, weaknesses, opportunities, threats] analysis and customer needs assessment helped us to quickly identify how we could leverage our strengths and assets with the world turned upside down overnight,” said Gagnon.
The team pivoted to work with restaurant food suppliers in order to offer a new contactless drive-through grocery pickup service called Choicelunch Pantry, which receives fresh food earmarked for now-closed restaurants and gets them in the hands of local communities.
“We saw a need in the community, and we worked like hell to fill the need. And we got scrappy where we needed to. When we couldn’t find protective masks anywhere, I sent an article I had seen on ‘how to make protective masks during the COVID-19’ to my mom, who has sewed all her life. By the end of the night, we had 20 masks made for our team,” he said.
The company had $100,000 in the first week of Choicelunch Pantry grocery sales.
“That’s not even CLOSE to what we normally do … but creating a brand a new product from scratch over the weekend and launching with $100,000 in revenue for the first week was still a win, and gave our team something to rally around and be proud of. We’re problem solvers. We thrive when we’re building and creating. If nothing else, the energy boost we got from rallying behind the quick pivot was desperately needed,” he said.
The grocery sales saved 15 jobs, and another project feeding the homeless in Orange County kept another 10 people working.
“When dealing in crisis, you’ve got to get creative, and you’ve just got to make decisions, and make them fast. Probably the biggest key though is you MUST operate with a command-and-control mentality. Crises are no time for management by consensus, or for large project teams ideating together. Leaders need to keep their ears to the ground for ideas, decide quickly on which ones to focus on, and then just GO … and go quickly,” Gagnon advised.
All of the ideas in this article may be great ideas in general. But what works for your unique customer?
Again, it’s that blind spot we all have. We can make an assumption that ideas we have for a pivot in our value proposition will be successful. But what if we are very different from the customer? Are we misreading what they want?
You can use A/B testing to learn which elements of your value prop are most effective at driving customer action. For example, when Consumer Reports engaged in value proposition testing, the organization experienced a 29% drop in clickthrough. Here’s what the organization learned from the test.
While A/B testing will give you data on actual customer choices and actions, if you can’t A/B test, surveys can at least offer some customer opinion that can provide a new perspective. This next story came from a reader who wanted to remain anonymous, but wrote in to tell us: “I also wanted to share something that might be helpful to the MECLABS community.”
When COVID-19 started becoming a serious problem in the US a few weeks ago, he started modifying his brand’s content to try to speak to people who were nervous or upset about what was happening and how it was affecting daily life. Sales started to dip significantly.
Then less than a week ago, he sent out a survey to a list of prospects and people newly interested in the brand’s publications (not established customers) to survey what they needed and wanted
The majority of people wanted this organization to carry on with its regular messaging, to help readers make the most of this time, and provide positivity.
So he adjusted promotions accordingly and has seen a spike in sales higher than most weeks this year prior to the COVID-19 outbreak.
The moral of the story: Ask your customers and prospects what’s needed and wanted, and don’t assume anything. Because in some cases, organizations could be contributing to their own slump like this marketer was.
Marketers Stand Together: 3 powerful ways your marketing can combat coronavirus COVID-19’s impact
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