Throughout 2020 we saw an avalanche of articles and tips directed at the online businesses, suggesting what to do to survive the COVID-19 crisis, how to keep growing despite the limitations, etc.
Many of these recommendations were good insights and practices — or, at least, could be seen as good intentions. Unfortunately, too many were written following the “one size fits all” approach — and weren’t necessarily tested in the wild.
Tribe47 itself has published quite a few studies, sharing only the proven strategies, tested out with and on our clients’ businesses.
And so, what we want to give you in this article is a more detailed roadmap, adjusted to *your* business’ case — instead of giving you yet another zoomed out and blurry “big picture”.
It all boils down to an important factor – how the COVID-19 crisis influenced the market demand for your product.
As you’ll keep scrolling, you’ll see the businesses grouped into 4 categories — following the BCG Matrix analogy of Cash Cows, Stars, Question Marks, and Dogs (it will be used in relation to the whole market, not just your company’s product portfolio). You’ll get a real-life case study for each category, based on the projects we’ve been consulting or working closely with for the past 6 months or more.
I am sure you will be able to place your business within one of these four groups.
If you are not able to immediately find your place on the list, here are five questions to help you determine your business’ position after the 2020 whirlwind:
4 Digital Business Segments — based on the BCG Matrix — in times of COVID-19
COVID CASH COWS
Growth stage before the pandemic: rather stagnant, developed market, with a stable increase in terms of online purchases (purchases moving from offline to online);
Demand during the pandemic: an increase in demand for some products and/or increase in online purchases; but it can be a phase, not a lasting change of customers’ behavior;
Market position before the pandemic: Strong. A well-known brand in its category.
Online presence before the pandemic: Well developed, with a well-structured online funnel, with a specialized digital marketing team; and at least 30% of customers purchasing online.
Ability to scale product delivery: Easy to scale.
The main focus here is your brand strength and the level of your e-commerce infrastructure development. If you have both plus the ability to scale product delivery, you can really leverage this new market situation. Just don’t be too aggressive (details below).
Examples of COVID CASH COWS
- Well established multi-brand e-commerce stores with all sorts of physical FMCG products – from cosmetics to food. Also, smaller ones targeted at local markets (some products might have experienced higher, some lower demand during the pandemic, but in general the demand is increasing slightly via the online channels, mostly due to the lockdowns).
- Very well established mono-brand e-commerce with strong, well-known brands, in many product categories like food, cosmetics, electronics, home decor, hygienic products. Even such difficult categories during the pandemic (like jewelry or fashion) can fall in here if they have a really solid online presence
I would say that the majority of physical, well-known e-commerce products fall here.
There are EXCEPTIONs though – and important ones!
The e-commerce businesses selling supplements and health-supporting products were showing slight growth trends even before the pandemic – think mainly of all sorts of innovative, new products in health and wellness. These will be moved to the STARS category.
General advice for COVID CASH COW businesses
Focus on your current clients and leads more than on new leads and client acquisition.
Your market is established. You are known. Instead of trying to win your competitors’ clients, pamper yours. Make sure to create for them the best shopping opportunities and the most convenient experience in your online stores.
Tactics to use
- Don’t scale advertising budgets too much. Try to spend the budget you were using so far in a more effective way. Focus on nurturing your current audiences and increasing sales in groups that already know and want your products.
- Adjust your offer to match new demands:
- New product bundles for products in higher demand
- Create new bundles of products
- If possible, add new products that are in demand right now and can be a great treat for your existing customers.
- Adjust your content to the new reality.
Don’t treat pandemic like “an elephant in the room”, make sure you address its dangers and opportunities, and show how your offer was adjusted to match these new needs:
- Create lead magnets, like e-books, for your lead database.
- Adjust product descriptions to match new potential usage or requirements for products.
- Create excellent seasonal campaigns that combine special offers and content.
This is your chance to really maximize seasonal revenue and satisfy current clients.
Here is a case study showing how we worked with one of the COVID CASH COW businesses during the first wave of the pandemic.
Growth stage before the pandemic: growing consistently year after year; new, leading-edge segments; innovative approach to the health and wellness industry through digital and physical goods.
Demand during the pandemic: a massive increase due to the changes in reality and the way of living; possibly a lasting transformation of customers’ behavior;
Market position before the pandemic: Strong. A well-known brand in its category.
Online presence before the pandemic: Well developed, with a well-structured online funnel, and a specialized digital marketing team;
Ability to scale product delivery: Easy to scale.
The focal points here are a well-established brand and a solid e-commerce infrastructure. If you have both, plus the ability to scale the product delivery, you can really leverage this new market situation.
Examples of COVID STARS
- B2C VOD and apps with entertainment, fitness, wellness and education. From Netflix to Masterclass, Udemy, but also the more local Fitness and Yoga Online TVs.
- Online Food Deliveries like Uber Eats, Deliveroo, Wolt, Glovo etc.
- Online communication platforms for business, education institutions etc like Zoom, but also more niche ones like Explain Everything.
- Online productivity platforms, facilitating remote work, like Asana, Trello, Monday etc.
- Health and Wellness related brands and shops like, mentioned above iHerb and many, many more.
These are just some of the examples of groups in this category. During the first lockdown we had a chance to work with companies from the 3 first groups:
– Fitness VOD platform, yoga VOD platform
– a well-founded food delivery app
– 3 different B2B and B2C Education platforms, enabling better communication.
General advice for COVID STAR businesses
This is your time —go get them!
Expand the new user acquisition and remember to retain users who are joining you. Hire the best people you can afford and fight for your market share. The time is now.
Tactics to use
- Scale your advertising budgets. Yes – no one else should do it, but you. Just do it the smart way – go for both old and new audiences, experiment, and split tests. But *please*, do scale.
- Adjust content and ads to the new reality – this applies to all segments here.
- Reach out to influencers, pay for their support if you need to. Now is the time when influencer marketing, if done well, can deliver great results.
- Make sure you track influencer campaign results, for example by always attaching a unique promo code to each influencer campaign.
- Introduce new products, launch new initiatives – all eyes are on you. Show your best. If there are new target personas that you never went for before, now is the time.
- Don’t ignore RETENTION – if there is one thing you should not ignore when hustling for new customers. You have a chance to acquire a massive amount of new buyers now, potentially at the lowest cost you ever could. It would be a massive loss if you didn’t retain them after the market corrects itself, and your acquisition’s speed goes back to “normal”.
- Build a strong email sequence for new buyers – the “Welcome Sequence”. Include in it your brand’s story, your mission, and an appetizing discount for the next purchase, too.
- If you have a digital product, make sure to optimize your new customer onboarding – in-app (product tours, welcome videos, in-app notifications) and outside of the app (emails, remarketing, etc). In this article under the “Churn” section, you will find more tips.
Here are some Case Studies of COVID STARS businesses we worked with during the first stage of the pandemic:
COVID QUESTION MARKS
This is probably the most interesting category. During the first lockdown in 2020 and right after it (in summer), several businesses approached our agency for help. In a few cases, we jumped in.
At the end of the day, we marketers are a bit of “gamers” – it was a blast to do marketing for CASH COWS and STARS in 2020, but if you want a bit of a thrill, you should kick off marketing for QUESTION MARKS (and if your company is one of them, get ready for a ride).
Growth stage before the pandemic: growing year after year; new, leading-edge segments; mostly digital and physical goods in the innovative health and wellness categories;
Demand during the pandemic: a massive increase due to changes in the reality and the way of living; possibly a lasting transformation of customers’ behavior;
Market position before the pandemic: New players, or fresh players.
Online presence before the pandemic: Almost non-existent, with an underdeveloped online marketing ecosystem for the new product or brand trying to emerge on the market.
Ability to scale product delivery: Easy to scale to a certain extent (if you see the ceiling it's still ok, you are starting out so you need to be able to scale easily to at least a certain point)
We are essentially talking about the same business examples as in the STARS category, but they don’t have any digital marketing infrastructure built yet and are starting almost from scratch.
When can it fly?
For some business owners, the pandemic meant getting out of their current business. In their case being able to quickly shift gears and refocus resources on the new, more hopeful ventures is definitely a great skill, absolutely worth admiration. Similarly, I admire entrepreneurs who quickly sniffed an opportunity and decided to launch a new prospective business when the global shift happened.
Yet, I do have my personal, subjective opinion on when it’s a good idea to jump into a new business with a full digital marketing force — and when not.
To me it all comes down to one question:
Do you have some essential ASSETS or other types of LEVERAGE that can help you out at the start?
Under ASSETS and LEVERAGE I would place the following:
- A strong position in a related field that comes with access to a potential client list. For example:
- A professional training company that used to deliver off-site courses and now wants to enter the online courses category.
- A new fitness app launched by the company that was previously connecting gym trainers with clients for 1-1 training.
- Other sources of access to a potential client list — that is not paid ads 🙂 For example:
- Being an influencer in the field with a substantial following (100k +) that could be leveraged.
- Having easy access to influencers who are willing to jump in to help promote the product.
- Having partners or investors who can make a list of potential clients for you to reach out to (for example via a connected business that is willing to collaborate).
- Exceptional product. Plus an ability to easily prove its uniqueness and superiority over competitors.
- Super strong know-how in the field, that makes it easy for you to create really powerful content that can attract potential customers on different platforms via both paid and organic reach outs. This however is a tricky one... I rarely see this happening.
- Build up team and infrastructure ready for digital marketing execution (it could be coming from other businesses that you have).
On top of that, you should, of course, have a solid budget to fund your team and advertising 🙂 So you can actually use this opportunity to build up your position in the market.
General advice for COVID QUESTION MARKS businesses
Execute fast — focus first on the middle of the funnel (lead generation and offer presentation) and the bottom of the funnel (closing sales) of the funnel.
You are targeting a market segment with high demand. Don’t start with a brand awareness campaign now. Leave it for after. First, prove that your product can satisfy the needs of those searching for solutions.
Tactics to use
- Take the time to clearly define your Unique Selling Proposition:
- Who are you competing with and what are your strong differentiation points? Especially towards the strong players in the market.
- Who are you targeting (who is your Persona) and why would they choose you over competitors? Perhaps you are planning to target “category newbies” (customers who never considered products from this category but the pandemic changed their needs) – if this is the case, make sure you clearly define why they should choose you and not a more settled brand in the category.
- Focus on producing really strong creative assets for your product presentation – they will become a base of your advertising; they need to clearly communicate your Unique Selling Point, but also be attractive enough to attract the attention of customers bombarded with lots of communication nowadays:
- Product Sales Page.
- Product Video.
- Other types of creative assets representing products, like photos.
- Start campaigns by reaching out to lists and target databases you have access to with your offer (like influencers, email lists of your related business, etc).
- Be brave to skip Top of Funnel and use proven Middle of Funnel tactics right away — like Webinars — if it applies to your business:
- If you are launching an education business with a relatively expensive product, go ahead and try Webinars – they will have a real chance to work if your content is truly good and unique. Normally, I wouldn’t recommend promoting Webinar campaigns to cold audiences – yet lockdown makes it possible and even profitable for many.
- Just focus on the high quality of the campaign itself. If Webinar is what you are planning, read our article on how to execute Webinars flawlessly.
- Don’t ignore Top of the Funnel (brand awareness) forever – get ready to jump into the execution mode when the lockdown eases and the demand in your category starts flattening out. Don’t expect that you can endlessly scale an online business without a strong Top of the Funnel campaign.
I will not devote much space to this category, because there are not that many opportunities in it.
Growth stage before the pandemic: stagnant, passed the growth stage;
Demand during the pandemic: no major increase or a small increase in online purchases;
Market position before the pandemic: Old players with nothing fresh or exciting to offer. Or companies that are about to start.
Online presence before the pandemic: Almost non-existent, with an underdeveloped online marketing ecosystem for the new product or brand.
Ability to scale product delivery: Difficult to scale or scalable to a certain extent
We are talking here about starting out fresh, in the categories that are not booming during the pandemic and were pretty stagnant even before it started. My general advice here is – wait and don’t launch or invest in digital marketing during the crisis. The world can shift again after it’s over (if it ever is).
I would put here new fashion projects, apps, or software for gyms and restaurants, as well as machinery, equipment, and durable goods — like cars.
Every global shift is an interesting time for business owners and for marketers, too. I hope this article inspires you to pause and place your business (or the one you are helping to run) on the roadmap to growth, instead of following the pixelized path of the “one size fits all” marketing advice.
If you have more questions or even better – if you disagree with these business recommendations (that are based on our agency’s experience but, still, are subjective) — please reach out to us in the comment section below or contact us here. We would love to discuss it further — and hopefully learn something new! We live in pretty interesting times indeed 🙂