Consumer behavior in a downturn

Consumer spending accounts for 70% of economic activity in the U.S., so when it diminishes repercussions reverberate widely. That being said, consumer behavior in downturns is by no means homogenous. In an article that appeared in the Harvard Business Review some years ago, authors John Quench and Katherine Jocz identify consumers as falling into one of four groups during a recession:

The slam-on-the-brakes segment

This group feels most vulnerable and hardest hit financially. They reduce all types of spending by eliminating, postponing, decreasing, or substituting purchases. Although lower-income consumers typically fall into this segment, anxious higher-income consumers can as well, particularly if health or income circumstances change for the worse. In other words, segments should be viewed as “mind-sets” not completely defined by financial circumstances.

The pained-but-patient segment

These consumers tend to be resilient and optimistic about the long term, but less confident about the prospects for recovery in the near term, or their ability to maintain their standard of living. They also economize in all areas, though less aggressively than the first group. They constitute the largest segment and include the great majority of households unscathed by unemployment, representing a wide range of income levels. If news gets worse, pained-but-patient consumers increasingly migrate into the slam-on-the-brakes segment.

The comfortably well-off segment

These consumers feel secure about their ability to ride out the downturn and consume at near-pre-recession levels, though they may tend to be a little more selective about their purchases. The segment consists primarily of people in the top 5% income bracket. It also includes those who are less wealthy, but feel confident about the stability of their finances—the comfortably retired, for example, or investors who have their money stashed away in low risk instruments.

The live-for-today segment

This group carries on as usual, and for the most part, remains unconcerned about savings. They respond to the recession mainly by extending their timetables for making major purchases. They are more likely to rent than to own, and they spend on experiences rather than things. They’re unlikely to radically change their consumption behavior unless they lose their jobs. Even then, they may simply turn to credit card debt to maintain their lifestyles.

Movéo believes these behavioral segments work as well for healthcare as they do for the greater economy, with certain caveats:

Temporary effects
The company AnalyticsIQ has identified four “pandemic personalties.” The first two, which account for 28% and 23% of the population respectively, adopt virus protective behaviors (as opposed to the other two groups that do not). Virus fearful people would most likely then be some percentage of half the U.S. public — a considerable sum. The important thing to note here is that not all healthcare consumers will be making healthcare decisions simply based on their economic situations. In a downturn, a comfortably well-off person who is also virus fearful might decline to have an elective surgery — even though they can afford it. This could have implications for health systems adapting to changing healthcare use patterns as the epidemiology of COVID-19 evolves. For example, a COVID-19 spike in the areas where virus fearful people live may result in the delay of needed care (with the accompanying economic consequences for healthcare providers). Conversely, the emergence a vaccine for SARS-CoV-2 or effective therapies for COVID-19 should make these same people feel safe enough to go to the hospital again.

Residual effects
The pandemic is likely to carry with it residual economic effects for healthcare providers that will play out alongside a generalized economic downturn. These effects may cause changes in consumer attitudes — directly traceable to COVID-19 — that will have an impact on healthcare provider revenues. For example, we know that hospitals have made huge efforts for it to be safe for people to return to them for treatment. However, as Biykem Bozkurt, professor of medicine at Baylor said during the height of the outbreak, “I think patients are scared to be exposed. Their perception is that hospitals are hotbeds for exposure and contamination.” A recent article in the JAMA Health Forum on Emergency Department usage notes that ED visits moderated to half of what they were — even in cities hit hard by the fist wave of the coronavirus disease. The article authors opined that this could reflect the prevalence of working-from-home arrangements and people generally staying home, which is leading to a decrease in automobile and other accidents outside the home. More than likely, though, there is also an apprehensiveness to enter a hospital, particularly for lower acuity care.

Our next post in this series will look at how consumer priorities services — particularly healthcare services — in a downturn.

Best practices for healthcare marketing investment during a recession

The COVID-19 recession is the first pandemic-driven downturn of the modern era. It is a healthcare crisis, leading to an economic slump. While the capacity shortages, service mix shifts, and workforce/supply chain disruption that made headlines when the pandemic took root have moderated to the point where the integrity of the healthcare system is no longer threatened, providers must still worry about what’s ahead. In a recession, they will likely see lower patient volumes, unfavorable changes in the revenue mix and diminished levels of philanthropy/governmental support.

While some hospitals have the liquidity to better weather the effects of such revenue storms than others, none are completely safe. The lack of certainty regarding the time frame and magnitude adds further complexity. The possibility that the pandemic may manifest itself in waves, is a huge complicating factor. A return to policy measures adopted to slow the transmission of the disease would again have devastating effect, especially if it curtailed elective procedures again. On the other hand, a vaccine(s) may initiate a rapid turnaround, assuming that it is widely available, efficacious and finds a willing population to be inoculated.

To say we are in uncharted waters is clearly an understatement.

However, even without a clear line of sight, it is possible to identify patterns in consumers’ behaviors that appear to be fundamental in any recession. Likewise, looking at organizations that have navigated other downturns, we can see strategies that tend to either promote or undermine financial performance during them. The important lessons gleaned from both these things can be applied, with some judiciousness, to the current situation. This series of blog posts is designed to help healthcare decision-makers mitigate the expected decline in patient volumes through best practices around marketing investment.

We will start this analysis in our next post by looking at the inflection point of any recession — consumer spending.

Patient experience. Another COVID-19 casualty?

For years, healthcare as an industry was the bête noire of what is known in marketing as “customer experience.”

People waiting months for appointments. Discharge packets as thick as phone books. Confusing bills with surprise charges. Zero pricing transparency and scarce outcomes data. Intake personnel with the charm of postal workers. Doctors well trained in chemistry, but too often unable to develop any with their patients.

A few years ago, this began to change.

With the advent of consumerism and value-based care, healthcare organizations started creating leadership positions solely focused on patient experience. They recognized that great customer service companies earn trust and loyalty during multiple “touch point” interactions, the superb handling of which requires forethought and design that puts the patient’s emotional needs ahead of the health care system’s.

With the internet available, doctors no longer were the sole possessors of sacred knowledge. The thinly disguised paternalism of clinicians of all stripes started to change as patients were treated as more equal partners in their own health decisions. Staff was being trained in hospitality industry techniques to not only satisfy, but to even delight when possible.

Hospitals ramped-up telemedicine and built offices in shopping malls to offer more convenience. Many providers started partnering with ride-hailing companies to fill transportation gaps. Even the intransigent problem of pricing transparency was starting to be addressed.

To be certain, the ability to optimize the patient experience was not distributed equally among all providers. But all were aware of it and, if they wanted to survive in the long term, all were doing something about it.

And then COVID-19 happened.

The novel coronavirus is not only a disaster for the world, but one for the patient experience movement in particular. The relentless climb in infections has pushed the priority of patient experience to the back of the line. After all, in large cities, where patients are being treated in temporary facilities, ambulances are being diverted and rising fatality rates, the last thing an overworked and highly stressed healthcare worker is thinking about is if they wore a big enough smile during their rounds. And rightly so.

But on the consumer side of the equation, even during a pandemic, people still need to deliver babies and get medical care for pre-existing conditions. Many face difficult choices as elective procedures have been postponed. But even if they could get in, who wants to go to a hospital now? Your medical needs may draw you straight to the place where where healthcare workers are treating COVID-19 patients. Biykem Bozkurt, professor of medicine at Baylor recently said, “I think patients are scared to be exposed. Their perception is that hospitals are hotbeds for exposure and contamination.” Some people will likely be shying away from hospitals long after it is prudent to do so.

The fact of the matter is hospitals are working to make sure their facilities are as accessible and safer for patients as possible, whether they’re seeking care for COVID-19 or in need of some other medical treatment. Also, many of the accoutrements of a better patient experience are still in place. In fact, some like telemedicine, are seeing a greater adoption across specialties and higher usage among patients.

That being said, perceptions of care and the safety of receiving that care have been altered, sometimes for the worse. What can hospitals do to repair patient experience after the crisis has subsided? Movéo sees three things:

Determine the extent of the problem

For patients who were processed during the crisis, try to take their (mental) temperature. Did they have a positive or negative experience? Are they understanding of the unique circumstances and incalculable stress the facility was under during the surge of COVID-19 cases? Did this affect their expectations or their experience? If a mea culpa is in order with these patients, this is a place to start.

Also, developing a plan to mitigate people’s fears and concerns about going to the hospital again should be a top priority. They are justifiably worried about their personal health and the health of those they care about, so tell them what your facility has done to create a healthy and safe environment. Then tell them again. Consider using a wide range of communication channels and materials— email, your web site, text messages, video, out-of-home, digital displays and others.

Keep in mind the patient experience when re-designing the hospital one

Hospitals will be different in the very near future. Already many, including Mount Sinai in New York and Seattle Children’s Hospital, have implemented new, COVID-19-specific policies and practices such as limiting patient visitors to two. Some are permitting only partners and grandparents in the labor and delivery ward. The list goes on.

Physically, there will be changes too, and well beyond providing more disinfectant sprays or wipes at frequently touched places. Social distancing dictates, such as staggered seating in waiting areas, will need to be enacted. This will require hospitals to consider how to control building ingress and egress, so that space use and density can be monitored. The use of digital signage or posters to remind people to maintain social distancing will likely proliferate.

Clearly space planning solutions can be used to reduce transmission of contagious diseases at healthcare facilities, and not only COVID-19. However, before you rush to implement the “6 feet hospital,” keep in mind the patient experience. When people go to the hospital, their anxiety is already high, while they simultaneously feel a loss of control. As you think about designing the new normal, give patients more control so that they are less vulnerable. It will help them feel more like people and less like pariahs.

Recognize that a good patient experience is made possible through your people

This is a great quote from Thomas Lee, MD, Press Ganey’s chief medical officer:

“Patients want a good experience. It’s not about parking, it’s not about something as simple as waiting time. It’s about how they feel. Do they feel peace of mind? Do they feel like everyone is doing all they can for them and working well together? These are the big drivers of patient’s likelihood to recommend. Do patients feel the teamwork is good, the communication is good, the empathy is real?”

The genuine engagement of your entire team is critical to patient experience. How are they feeling about working? Are they happy? Do they intend to stay on? Obviously, COVID-19 is testing these organizational bonds on a daily basis. It’s critical to understand how the pandemic has impacted your workers personal connection to your culture. It’s also important to understand if they feel their organization is caring for them, as well as understand how to improve and advance that care once the pandemic subsides.

In any industry that offers a service, there are moments when the long-term relationship between a business and its customers can change significantly—for better or for worse. COVID-19 is undoubtedly one of those moments. By keeping an eye on the foundational aspects discussed here, healthcare systems can better ensure a future with more patient experiences that have positive outcomes.

Movéo makes best agency list

Movéo is proud to have been named to Growth Marketing Pro’s list of Best Design, Branding and Creative Agencies. Growth Marketing Pro is the largest growth marketing blog on the internet, according to its site.

Growth Marketing Pro recently conducted a “best of” review of agencies around the country, and 25 made the final cut. Movéo earned a spot on the list, receiving a 4 rating out of 5 possible stars. The ranking was based on on client roster, domain authority of our site and Growth Marketing Pro’s experience/knowledge.

It’s always great when we win an award or rank in a round-up list, but it’s especially nice in this instance since our mantra — just like Growth Marketing Pro’s — is all about growth!

Learn more

Tips for marketers during COVID-19

Building brand trust has never been more important, and brands should use this time as an opportunity to re-establish trust through customer-centric actions.

Listen.
Now more than ever, it’s important to know what customers feel and why. Increase voice of the customer (VoC) programs and social listening efforts to better understand customer concerns and needs relevant to your brand. Ask sales and account management teams what they hear from the front lines and monitor customer service emails, calls, and chats for changes in concerns or sentiment.

Adapt.
The next few months will no doubt bring many challenges; brands must anticipate these challenges and take alternative actions. For example:

• Create compelling content. With more people spending more time at home, brands should look to provide informative, educational, and encouraging content.
• Develop alternative marketing ideas now for physical events planned for late spring and summer, don’t wait until they are canceled.
• Secure future media now. Competition for ad space will be fierce as things return to normal, and both brand and political campaigns start ramping up their ad spendings. Brands should work with their media planners to secure placements now before they get crowded out.

Help.
Support customers and protect customer relationships while staying honest about what your brand can and cannot deliver at this time. Focus on keeping the bonds of trust strong, and avoid actions that provide short-term gains at the expense of customer trust.

Marketing wisely with email in today’s environment

In a down economy, email marketing can be both a B2B marketer’s friend and enemy. As cuts are being made and marketers look for ways to increase sales, they must not lose sight of the fact that while price and selling are important, value — or the perception of value — is equally important.

On the B2C side, marketers can deliver value in the form of discounts and loyalty rewards — keep in mind, a $200 camera sold at $150 is still valued in the customer’s mind at $200. On the B2B side, the same principles hold true. B2B companies can deliver value through free consulting services, knowledge sharing, priority/VIP company event access, and relevance. Yes, relevance. Your customers and prospects are getting bombarded with offers from companies trying to win their business — and that’s where email could work for or against you. On average, each customer receives 121 emails every day! That means, if you don’t take the time to develop a relevance strategy, your emails will get lost in the inbox.

Marketers know email is a cost-effective means for getting their message in front of customers and prospects quickly and easily. According to the DMA, for every $1 you spend on email marketing, you can expect an average return of $42.

The temptation in a down economy is to increase the frequency of email in the hope of increasing response. However, the reality is that relevancy outperforms frequency, and the more relevant the email, the more value it holds for the recipient.

DID YOU KNOW?

The average email open rate is 20.81%, but emails with personalized subject lines generate 50% higher open rates?
(Yes Lifecycle Marketing)

And that by adding videos to your email you can increase click rates by 300%.
(Martech Advisor)

The e-mail industry has proven that targeted, relevant emails deliver better initial response and engagement over the long term. At the same time, customers have little patience with irrelevant emails and will quickly become disengaged. Marketers who embrace the targeting power email affords will realize greater returns and avoid falling into a sea of white noise with all the other marketers out there who are bombarding those same customers with irrelevant offers and messages.

So how do you improve your relevance?

Segment your lists

There are many ways marketers can segment their lists to increase the relevance of their emails.

Here are some examples:

• Industry
• Role/title
• Sales cycle
• Interest/behavior

Behavioral segments offer a lot of options, from insights into interest to understanding who your most engaged subscribers are and inversely who the dormant subscribers. Sending to a list full of subscribers who never respond will not only drag down your response metrics, it can also hurt your sender reputation, so you’re going to want to address those non-responders. At Movéo, we work with our clients to implement automation programs built on dynamic lists that look for dormant subscribers, attempt to re-engage them, and move those who do not reengage out of the subscriber list and into a suppression list.

Use automation to trigger emails based on behavior

According to Epsilon, open rates for trigger emails can be as high as 49% (95% higher than traditional email open rates), and the average click-through rate (CTR) for triggered emails is more than double that of traditional blast email. Additionally, emails that are triggered by an action perform 3X better than timebased emails. By combining segments and behavioral triggers, you automate delivery of emails that deliver your most relevant content exactly when it’s most needed.

Personalize your messages

A study by Experian found that personalized emails deliver 6X higher transaction rates, and according to LiveClicker, personalization can increase ROI by $20 for every $1 invested. Personalization can be created in a number of ways; here are a few:

• Insert the customer’s first name into the subject line
• Use dynamic content functions to insert relevant creative into your message based on subscriber profile or behavior
• Send targeted promotions, such as cross-sells of products and services that are related to purchases made

Preference Centers

One of the best ways to create a more relevant and personalized experience is to use Preference Centers. Preference Centers let your customers and subscribers dictate the terms of communication, allowing them to tell you how often they would like to be contacted and what content is most relevant to them.

Don’t forget creative relevance is also key.

The aforementioned segmentation drivers help define the audience and the topic of “conversation,” but it’s the offer and the message that drives action. The more specific marketers can be with their subject lines, the higher the open rate. Similarly, the more compelling the offer, the higher the conversion rate.

BE A CONSTANT:

The more specific marketers can be with their subject lines, the higher the open rate.

This may seem obvious, but in this economy, marketers should take nothing for granted, and focusing on relevance will help you cut through the clutter, deliver more value, and ultimately strengthen the bond between your customer and your brand.

After the shock — one scenario for business

Predictions about a post-pandemic future are premature to be sure, especially this early on in the crisis. However, people need to look ahead, if not for certainty then for preparedness’ sake.

One possible scenario has five stages. Let’s call it the “whip” curve:

1. Old Normal
   Business activity as it was prior to the pandemic (i.e., U.S. economy growing, stock market booming, low unemployment, etc.).
2. Shock
   The pandemic strikes, and people are more worried about staying healthy than buying things. Business activity and employment nose dive. Note during this period, the pandemic will peak and a decline in infections will begin.
3. Adapt
   After the initial shock, businesses will find creative ways to carry on. Some may even view this as a period of opportunity to position themselves for what comes next.
4. Re-entry
   Doors re-open. The hiring switch turns back on. A sharp jump in activity occurs as businesses scramble to fulfill backlog and meet pent-up demand after a period of stagnation.
5. New Normal
   Once pent-up demand is met, a new level of “normal” business activity will be reached — likely lower than the old normal, at least in the short term — but by how much? At this point, the “whip” turns into a “cat of nine tails.” Resilience will depend on many factors. Is the virus still a recurring threat? Has the hard-wired psychology of people changed (e.g., will there be more saving than spending)? Will the momentum from the re-entry stage carry through to this stage as well? Will debt from the stimulus create a drag on businesses?

The “whip” is just one scenario among many that are possible, but what is for sure is that the earlier we focus on planning and preparing the less frenzied our futures will be.

Demand generation in a time of social distancing

There is an old Latin proverb — “If there is no wind, row.”

As the COVID-19 virus sets in and we all hunker down, many businesses have realized they have to be their own wind. No one will create opportunities for them. If they want to succeed, they have no choice but to muster the will to make things happen.

Many of our clients’ tradeshows are being postponed, canceled or shifted to virtual-only. Their choice is simple — throw up their hands and say it is out of their control, or reallocate those dollars to have a meaningful impact.

There are strong business reasons to do the latter.

Events are essential drivers in a company’s sales and communication strategies, driving awareness, leads, sales, new product launches and press. According to SiriusDecisions 2019 B-to-B Buying Study, 23% of respondents attended a conference, trade show, forum or seminar. While events may be postponed, our clients were counting on the outputs from these events to meet their yearly goals.

A quick worksheet can help you quantify those outputs.

Loss Worksheet

After you’ve calculated what they would have been, why not start developing a plan to replace the opportunity with other approaches? Such a plan may include:

Creating New Thought Leadership

Many of those tough-to-nail-down subject matter experts at your company, or even outside your company, may finally have some time to be interviewed now. Let’s use the technology we already have in place to engage our audiences with their knowledge. Start by publishing relevant and timely communications — Q&As, video interviews, podcasts, etc. — to fill the gap of what they would have seen at your trade show exhibit and what they would have heard from your keynote speakers. Use an omnichannel approach to reach your audiences with this valued content.

Generate New Business Virtually

Need to fill the sales pipeline with leads? Offer one-on-one demos between your experts and would-be show attendees. Virtual meeting scheduling can automate this task and put your SMEs in front of your customers all over the world to engage in genuine 1:1 conversations. Use your social channels and event email lists to promote scheduling a demo.

Focus On Customer Retention

Trade shows are not all about new business — they offer the opportunity to personally meet with existing customers to strengthen brand loyalty and achieve other selling objectives as well (see table below). In the absence of shows, retention marketing campaigns focused on your existing customer base can fill this gap. The goal is to create repeat customers and increase both their frequency of purchase and the average order volume per purchase.

According to Bain & Company (in conjunction with Harvard Business School), a 5% increase in retention can improve profitability by as much as 55%. Similarly, utilizing reactivation campaigns can help deliver new messages to past customers who are no longer engaging with your products or service.

Now Is The Time To Row Together

Movéo is 100% operational and has the production capacity to support our clients. We may run off the cloud for now, but that doesn’t mean our head has been in it — we’ve invested significant resources over the last few years to ensure business continuity from both a process and technology standpoint.

We’ve always been nimble, and this enables us to pivot quickly on the dynamics of this marketplace change — including the rapid reallocation of funds and resources from in-person to digital, from old priorities to new.

Things have changed, but marketing is still about making smart investments in channels and tactics that customers are consuming at a growing rate. Movéo is both prepared and committed to helping our current clients and new ones adapt and deliver on marketing’s mission, virus or no virus.

Contact Movéo to develop a custom demand generation plan.

The cookie is going away. What happens next?

Cookies — or third-party tracking codes — have evolved to be a central component of digital advertising. Yet for various reasons, from privacy concerns to ineffectiveness across devices and mobile apps, cookies have outlived their usefulness. Firefox and Safari currently block them and Chrome will do so by 2022.

How will B2B marketers cope without cookies? There are three possibilities:

Replacement

• A new identifier, like email address or phone numbers, will be used. Such “people-based advertising” would target actual users rather than their devices.

More of the same

• Increased reliance on “walled garden” platform companies like Facebook and LinkedIn which control their first-party data.
• Programmatic guaranteed deals, whereby brands work with publishers directly to get their first-party data, which can be then fine-tuned into audience segments.

What’s old is new

• Ad networks, which were replaced by supply-side platforms that used cookies to aggregate inventory on small publisher sites, could return and sell inventory on behalf of “the long tail.”
• Dusting off old school methods, such as research companies that interview users through interviews or online surveys to track audiences.

Movéo insight

One thing will be certain in this coming cookie-less phase of digital advertising — first party data will reign. Where brands acquire it will be up to them, however, getting their own will be the best and (in the long run) least expensive strategy. This will require companies to generate large volumes of quality content and have a high amount of onsite interactions. Site visitors will need to be identified at an individual level, but once this happens their unique business needs and likely intent can be discovered. This means marketing can provide greater personalization and optimized nurture programs, which will lead to a more relevant onsite experience and actionable insights for Sales.

B2B and B2C buyer journeys converging in new ways

A study by Forrester commissioned by Adobe finds that B2C and B2B buyer journeys now share more similarities than differences.

While certain aspects of the B2B sale will likely always be unique (e.g., team buying, longer buying journeys, etc.), in a number of other ways the two have started to mirror each other. Specifically:

• Rising expectations for a frictionless, “B2C-like” buying experience in B2B (e.g., e-commerce)
• The B2B customer becoming more fickle — like a consumer — as barriers are removed to customer movement
• Younger B2B buyers doing online research, seeking opinions, and being mobile-centric
• The B2C buyer infusing more data-driven, rational behavior into even simple buying decisions (e.g., movies, restaurants, etc.).

Movéo insight

One of the convergence areas most likely to impact B2B marketers is the increasing desire of B2B buyers to remain anonymous longer into the buyer journey — again echoing consumer preference. This may mean delaying certain questions until prospects have indicated greater readiness to provide qualifying information through their digital behavior. However, when they do want to be known, these same prospects expect to be recognized with personalized content. These new hybrid buyers want it both ways — and they will increasingly get it.