Brands, take a stand

CMOs must rise to the challenge in these turbulent times 

Consumer behavior has always been dynamic in a changing landscape, but introduce a health pandemic, economic uncertainty and social unrest, and most bets are off. The only certain bet is that we must invest in understanding human behavior and how it will change as a result of these turbulent times – so we can help our businesses survive and thrive not only during, but after, the crisis.

There is no question that the COVID-19 pandemic is changing how humans think about consumption across the globe. The EY Future Consumer Index (FCI) is tracking this transition every four weeks across nearly 5,000 consumers in thirteen countries around the world. Keeping our fingers on the pulse of this behavior is mission critical so we can better understand the future and how to intersect with it. 

Key findings from our most recent data (May 2020) illuminate critical insights and help us examine how brands and marketers can respond.

Personas

First, companies must understand the mentality of consumers as they think about their approach to the crisis. The FCI unearths a spectrum of personas for us to consider around spending habits and economic decisions:

• A sizable majority (41%) of respondents describe their habits as either “keep cutting” or “stay frugal.”  Their decisions are being overwhelmingly driven by economics.
• Nearly a quarter (22%) of FCI respondents are “cautiously extravagant” consumers and believe we will shortly be entering a global recession. This segment is financially conservative now but expects to increase its spend after the crisis.
• One fifth (20%) have adopted a “get to normal” mindset and they don’t think much will change once the crisis settles. In fact, 24% do not anticipate any changes to their spending and behaviors.
• And a small minority (16%) of younger, more optimistic respondents identify with the “back with a bang” category and are confident about spending more despite current concerns about the shifting landscape.

Behavioral shifts

Across the board, the FCI highlights some significant shifts in behavioral attitudes and mentality, calling for brands to rethink some of the fundamentals around how they craft experiences and reach consumers:

• More than half of those surveyed do not expect to feel comfortable at restaurants (62%) or movies (64%) for months to come.
• More than half (52%) of respondents said that they would change the way they shop, 70% of which expect to be more focused on cleanliness while shopping in person.
• A quarter (25%) said it will take years before they will fly again, and one fifth (20%) said they will never be comfortable attending a public gym.

Brand affinities

Finally, the FCI shows that brand purpose truly influences consumer choice and loyalty in the current environment.

• A large contingent (66%) would be more likely to buy from companies that are transparent in all they do.
• Similarly, 63% say they are more likely to buy from companies that do good for society.
• One third (33%) are even willing to pay a premium for brands that contribute to the community.

Leading brands in this moment

Given these findings – and what they say about today’s consumer – what should a CMO do now to reframe a brand's future? Here are five takeaways for CMOs:

1. Elevate accountability for the brand. Brands create long-term value for companies, but this cannot be the sole responsibility of the CMO – the full C-suite needs to have this on these goals on their scorecard. The growth agenda goes beyond demand-gen and brand building – it is about the end-to-end customer journey, requiring deeper collaboration across functional silos and leaders.
2. Determine your stance. If purpose matters even more now, the company cannot feign heart, the effort must be authentic and at scale. Start purpose transformation at the top and drive it all the way through the business – from brand ambition, to vision, values and activation. And to make it real, be sure to communicate your objectives to every employee.
3. Build marketing agility. If we know how rapidly circumstances can change, we don’t want to be perpetually in reactive triage mode. It is critical to wire the operating model for agility, not only across marketing and communications, but across the entire customer journey, including internal teams and external vendors.
4. Drive the digital mandate. The pandemic accelerated the need to use digital experiences to connect with consumers more effectively than ever, and things that would have taken years on a roadmap suddenly materialized in a matter of months. Channel that new mandate, speed and energy into permanent momentum for brand and experience transformation.
5. Engender trust. Brands need to contemplate the role they play as leaders in broader society. Overall, only one third (33%) of consumers say they are confident they can trust the institutions they interact with, including government (42%), financial institutions (25%) and media (23%). In this environment, CMOs have an opportunity to really challenge their companies to fill a leadership gap and strengthen customer loyalty.

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In this era of change and challenge, it’s not enough to drive incrementally from where a business is today to improve performance relative to the current state. The FCI proves that behavioral shifts are even faster moving than before, so organizations must visualize where customers and consumers will be in the future. If we drive meaningful innovation in the business model and experience sufficient to intersect with the future customer with a human-centric and technology-forward approach, we can drive growth and create value. We must always operate in a duality, thinking from the future back to the present, while also driving performance improvement in the current business.

If you’re a marketer, how are you leading through this crisis? Which of the ideas for CMO leadership above resonate with you? I hope you'll share your comments below.