How is This Pandemic COVID-19 Affecting Start-up Marketing Industry Badly?
Covid-19 has been all over the news for all the right reasons. From being quarantined within our homes to social distancing, the pandemic has changed the way the world works. The rising number of cases due to the pandemic has put a halt on business activities for months. Companies have shut down, businesses are suffering, employees are laid off, and the job market is in shambles. The corporate sector has taken a huge hit in the past couple of months, but the ones profoundly affected by the pandemic are the startups.
Startups Survival During COVID-19
The marketing industry for startups is consequently struggling to build a consumer-driven brand from the ground up. A global crisis pushed entrepreneurs to put a halt or re-evaluate their marketing strategies. Adapting to an agile methodology to engage with the audience in such critical times is necessary to prevent marketing from immobilizing.
Let’s take a look at some startups which took a different route in the pandemic to survive.
- ClassPass hosts multiple studios and gyms across the world, which closed down within 10 days of the crisis because 95% of the revenue evaporated. They cut down on spending, stopped hiring, and created a video streaming platform to help members out with virtual guides and workouts.
- Another example is the Malaysian startup called StoreHub, a cloud-based POS system digitizing business for retailers and restaurants. They wanted to expand with the capital they earned from serving 12,000+ customers; however, due to sudden lockdowns countrywide, they adapted quickly to food delivery to maintain their customer base. They’re offering flexible payment modes, and they’re saving up on paying commission to food delivery companies.
These examples emphasize the importance of adaptation and agility in startups. The economy surely collapsed because of a pandemic, but it never shut down. Startups in such critical times have less margin of error and limited cash funds.
While the tech startup sector is immune to the pandemic to some extent because software developers, designers, and marketers can work remotely during lockdowns. However, what about the market conditions despite these adjustments that affect the marketing and sales of the startup?
The Impact Of COVID-19 On the Startup Marketing Industry
There are a lot of factors that play in the survival of a startup. Many Top firms cut down on marketing budgets during a global economic crisis. However, in this specific case, governments and higher management leapt in to help spread health awareness messages and promote health journalism.
COVID-19 has a direct impact on consumer behaviour, which inevitably transforms marketing strategies for startups. Growing in the corporate sector requires you to prioritize digital marketing according to consumer behaviour. When we talk about adaptation in the marketing industry, the main focus of any campaign is always the target audience. As a response, the marketing budget adjusts to changes in consumer behaviour accordingly.
Every startup survival pack includes a marketing plan which is made of previous consumer data, behaviour, time, quarter revenues, methodology, and consumer purchases. It’s hard to determine consumer consumption and spending patterns during such times, which is why previous data isn’t as useful. Reanalyzing and recording updated data are necessary to thrive in the marketing industry.
With the whole world going digital, digital consumption of information and data has increased significantly in the past few months. An average consumer now spends an average of 10 hours on social media platforms. Where and how you deliver your message matters a lot.
For instance, the travel and hospitality media is suffering to get any recognition in the pandemic due to lockdowns imposed globally. In contrast, e-commerce and social media platforms are in full bloom during the pandemic. For any startup to think like a brand, they must first prioritize acquiring customers. The startup marketing industry was slow to realize the importance of engagement channels and digital adoption in the early stages of the pandemic.
Everyone has different reasons for advertising, but the purpose remains the same; to attract the target audience. Global brands aim to create an association with consumers and run value-based marketing campaigns while local brands aim to boost sales, spread awareness, and employ consumer-centric marketing methods. These brands depend entirely on consumer-driven engagement channels.
Specific media channels shift focus to purpose-led businesses to analyze ROI on platforms, devices, and media. Previously, marketers strongly valued consumer-driven response on given platforms. Now, however, things have changed dramatically. The reformed advertising circuit focuses more on ad spend. With limited cash funds in the account, startups struggle with planning a media budget.
The Survival Guide Every Startup Needs in The Pandemic
There’s no playbook for marketing. There’s no specific answer to ‘how to fight all this successfully,’ but there are many examples of what you ‘shouldn’t’ do in marketing. As a startup, you must evaluate some necessary factors before you think about ‘plan B.’
Think about your burn rate
Figure out how much cash is spent every month, what fixed expenses you have and what variable expenses you have. To get your burn (loss) rate, subtract the monthly gross burn rate from your actual revenue per month to get an average burn rate. The amount of money lost by your company per month is known as ‘burns’.
Think about your business model
Times have changed, and situations have changed. Your business model cannot possibly look the same as it did the past month. Figure out what parameters and metrics you factor in to measure your business’s growth. What financial metrics do you look up to? What is your sales cycle forecast for this month? Is the assumption of your market and consumers accurate? Have your sales reduced? Did your customer base reduce in size? All these questions help you evaluate the position of your startup in the current market.
What if this is the new normal?
Are you ready to adapt to the new normal if this problem stretches for more than a year? 2 years? Breakdown business activities and processes to identify possible loopholes to reconfigure your startup.
Plan the Perfect Marketing Strategy Now!
Learn and identify the loopholes in your marketing strategy and transform your marketing strategy now.
Covid-19 has surely hit almost all the industries(advertisement industry, tech startups etc) , But the worst hit is taken by the startups in the marketing industry. Surely doctors along with computer science(AI) are fighting against it. Till the time situation becomes normal, the industry should follow the survival guideline.
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