Covid-19: leading your business through a crisis
A message from Alison Branch, Park Managing Director, to any business facing hardship as a result of Covid 19.
Like many other businesses, Park has spent most of this week troubleshooting Covid-19.
We’re open for business, but working in ways that only last week would have seemed unthinkable.
Staff have agreed to have their temperatures tested on the way into the building, and visitors are being asked to do the same.
Desks have been moved to maintain a safe distance of two metres between colleagues.
Everyone’s keeping to their own pens and pencils. Machine touch points, handrails etc. are being sanitised multiple times a day.
It is, without doubt, a unique set of challenges.
But one challenge is not entirely unprecedented. In 2008 and 2011, almost every business suffered. These economic shocks were less unnerving and sudden than coronavirus, and more protracted, but they still had serious consequences for many.
In those earlier crises, Park particularly noticed the impact on creative industries, as brands shifted budgets to what – then – was perceived as the ‘safe haven’ of digital media.
Many companies did not survive. Those that did, found themselves forced to adapt to an evolved business environment, compared to recent years.
This prompts the question: what learnings are there, in those recent crises, that could be useful for businesses facing hardship as a result of Covid-19?
A question of timing
I gave a second thought to publishing this.
Given that coronavirus poses a direct risk to human life, some may consider it too soon to talk about the business impact.
But as a business owner, it’s impossible to see the business and human risks as separate.
We bear great responsibility to our teams – and further, to their dependents, to our suppliers, and to the clients who rely on our business in order to carry on in theirs.
Client-side, responses have been varied.
One of the interesting things about working at Park has always been the perspective it lends on very many different industries: from cottage-industry indie mags, to global corporations.
Events have been hard hit as public gatherings are curtailed. In financial services, print deadlines must be met for legal reasons.
One response that has stood out is that by creative industries. Marketing professionals mostly continue to work from home, and we’ve already had a few conversations about how print can help brands ‘be there’ without employees actually being there.
In light of news of surging orders at Amazon UK, postal marketing may become a key tactic in the coming months.
The impression is of a business culture, particularly in marcomms, which is now shaped around rapid and far-reaching change.
Everyone has their favourite example of a company which did not adapt quickly enough – or one that radically changed its fortunes by thinking ahead of the curve.
Blockbuster clung on until 2014, at which point, 4,000 jobs were lost; but few remember that Netflix launched as a DVD rental service in 1998, before migrating into online streaming.
Today, these memories, combined with real and rational fears, are stimulating very sensible and timely conversations about the change that may play out over the next few years.
An eye on the trends
The Economist earlier this month said that Covid-19 will have ‘…a lasting effect, accelerating trends in business organisation that were already under way’.
It delves into supply chains which, for sustainability reasons, had been becoming more EU-centric for Park for some time. Our suppliers had also increased UK stocks to prepare for any distruption cause by Brexit. This has shielded Park from global disruption, and this month, it has made it easier for us to stock up on paper, ink and spare parts as a precaution.
But for our clients, the more important trend is the changing role of print media in the marketing mix.
The best decisions, in times of crisis, are those which position a business at the crest of pre-existing trends – so that when the crisis stabilises, the business is optimally placed to operate in the new ‘normal’ market conditions.
At Park, our conversations with clients are currently indicating a different long-term outlook for print, compared to 2008 and 2011.
In those years, the financial crises accelerated an already in-process shift towards offline media.
The rationale, from the financial crises, remains the same:
‘…as the advertising industry begins to recover from the devastating effects of the recession and marketers experiment with a variety of new ways to reach the audience.’
New York Times, 2011
The relative importance of print vs. digital, however, has rebalanced. In 2020, some of the ‘new ways’ of marketing are novel uses of the print format.
Digital is no longer viewed as a safe haven. Fake news, programmatic fraud, and the terrible customer experience of irrelevant unwanted comms have all led to print becoming viewed as the more trusted medium, and an antidote to the noise of mass digital messaging.
The balance remains unsettled; above-the-line slots in newspaper and magazines were still dropping before Covid-19, and many printers were closing as a result.
But some areas of print have grown – corporate mags, for instance.
Two Park clients are cases in point: Courier, a business magazine, recently bought out by Mailchimp, an email technology provider, and Sandwich, launched by Unilever.
The new magazine from dating app Bumble is another example.
In B2B industries and financial services, print designers are becoming increasingly competitive in the stakes to produce the most engaging collateral. Annual reports and shareholder marketing are now more likely to include creative finishes and binding options, and use premium paper stocks.
These are not always cheap investments, and many businesses may shy away from short-term investment in all marketing until greater certainty has been restored.
But thinking, reading, researching and planning all come at no incremental business cost.
As the Economist article notes: ‘the crisis offers a chance to experiment with new ways of doing things—and to question the wisdom of old habits. Chief executives should not be immune to the opportunity.’
The importance of staying switched on
Whatever media formats you work in, one lesson that can be directly imported from 2008-11 is the importance of remaining active in your market.
A lot of research was conducted, at the time, into the outcomes for brands which slashed marketing investment, versus those which maintained present levels.
A report by the Institute of Practitioners in Advertising (IPA) found that:
‘Whilst maintaining or reducing fixed costs was desirable, the opposite was true of marketing costs…Communications, R&D and new product development were all areas where increased expenditure was associated with business success during downturns.’
The report included this graph (not quite up to Park’s standards of design, but there you go) shows that brands which ‘saved’ on their marketing budget in the first year of a crisis eventually forwent profits approximately double that sum.
More worryingly, the impact of these decisions was not evident until too late.
‘Following a budget cut, a brand will continue to benefit from the marketing investment made over the previous few years. This will mitigate any short-term business effects, and will result in a dangerously misleading increase in short-term profitability.’
The word ‘dangerous’ did not have the same connotations in 2008 as it does now.
Indeed, it may even seem an insensitive way to describe a risk to business profits, given that many have already lost loved ones to Covid-19.
But it bears repeating that business failure comes at a human cost.
For those of us fortunate enough to remain operational, in a crisis more so than ever, it would be irresponsible not to be planning the next move.
Stay in touch
We remain open for business, and available by phone and email as usual.
Please don’t hesitate to get in touch – whether that’s about a current print need, or to discuss your strategy for the weeks and months ahead.
Click here to get in touch.