Learning From the Past to Face an Unprecedented Present: Part 1
By: Dan Miers
The current COVID-19 crisis is many things, among them a public health emergency, a capacity and stress test of public and private medical care systems, and an ideological balancing act between economic health and human health. The pandemic has, and continues to, deliver a major shock to the global community, upending families, communities, systems, and society.
There is an adage, “strategy is merely a framework around which to improvise.” And the greater the system shock, the greater the improvisation. Successful improvisation is the product of sound fundamentals and experience—making it look spontaneous takes a lot of preparation and learning.
In many ways, the COVID-19 crisis and system shock resemble the global tumult of the Great Recession of 2007-2009. While certainly not a medical emergency, 2008’s economic strife reshaped businesses globally, transformed ways of living, and left behind valuable lessons.
I’d like to apply some of those Great Recession lessons and spotlight three areas where healthcare strategic marketers can improvise today and take steps for their organization and communities’ long-term benefit:
- The imperative for sustained communications to raise awareness of your brand
- The crisis’ health effects, which will extend beyond the battle with the virus itself, and
- The potential for business transformation and brand revolution
I’ll explore the second two points in other posts—at the moment, the most pertinent issue is the first: the importance of maintaining communications to connect with audiences.
As had been observed in all major recessions preceding it, so it was confirmed again in the Great Recession: “There is strong and consistent evidence that cutting back on advertising during a recession can hurt sales during and after the recession, without generating any substantial increase in profits. Such cutbacks can result in a loss in capitalization. On the other hand, not cutting back on advertising during a recession could increase sales during and after the recession. Moreover, firms that increased advertising during a recession experienced higher sales, market share, or earnings during or after the recession.”
Just as in the Great Recession, experts are now warning that, while marketing strategy must shift to reflect our current situation, the worst thing that brands could do right now is to “go dark.” Instead of trying to drive short-term sales, marketers should focus on building meaningful relationships and equity with consumers.
Additionally, studies on the topic of ad spending and economic downturns consistently show that advertising during a recession delivers benefits that persist for several years afterward. Anecdotal SPM client evidence exists to corroborate that this benefit extends to the healthcare category.
Thoughtful communications throughout the COVID-19 crisis won’t only lead to future benefits—current research demonstrates that a solid portion of consumers want to see messaging at this time: 43% of people surveyed said it’s reassuring to hear from brands they know and trust, while 40% want to hear what brands are doing in response to the pandemic—and only 15% didn’t want to hear from brands at all during the crisis. This data suggests its wise for hospitals and healthcare systems, especially if they have earned a high level of trust from their patients, to continue to communicate as the crisis evolves.
And there’s reason to believe that healthcare organizations have the public’s trust that justifies continued communications; a recent study shows that, currently, 73% of consumers are looking to the healthcare system to handle the crisis. Further, people trust local hospitals and health systems more than the federal government or national news outlets for information about the crisis, and 31% of consumers feel more positive about healthcare organizations since the coronavirus outbreak.
Of course, as health systems contend with the patient influx COVID-19 creates, certainly discretion and sensitivity are the rule. More harm than good can come from creating new demand that interferes with a health system’s ability to treat infected patients or unnecessarily stresses our people and teams.
In the current COVID-19 crisis, hospitals and health systems risk repeating two behaviors that handicapped them during the Great Recession: revenue fear and taking a very short-term financial view. Systems ask, how much will we lose on each COVID-19 patient we treat? When and how will we receive government aid? Will it be enough? When a bear–economic or not–attacks, you only think of surviving until tomorrow, and the instinctive response is to slash costs. Expense cutting should be done strategically, and not all expense dollars are equal.
Health systems should absolutely optimize marketing spend with a long-term return view, but not in the way you might instinctively think—and that will be a topic of a whole other article.
Today, recall a key lesson of the Great Recession: research and analyses show time and time again that the spend required to recover market and brand mind share lost during a period of marketing inactivity exceeds the amount that would have been spent had the health system maintained marketing investment. Further, health system budgeting cycles and conservative financial management amplify this challenge. Once turned off, health systems typically can’t commit to the higher investment level required to “bounce back,” or do so quickly enough to neutralize the negative business impact of the short-term cost-cutting mindset.
Long story short: modify your messages for sensitivity, optimize your tactics, but don’t take your foot off the gas.
The shock—or really, multiple shocks—our system has received on multiple levels due to COVID-19 has demanded swift improvisation from healthcare organizations. Beyond sustained communications, there are two more areas where healthcare strategic marketers can use lessons from the Great Recession to take measures that will benefit their organizations and the community long-term: the crisis’ far-reaching health effects, which will extend beyond the virus itself, and the potential for brand revolution and business transformation, both of which will be covered in upcoming posts.