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Jed Wylie 0:12
I’m Jed Wylie marketing consultant at digitalROAR and I'm joined today by my co-host Ed Marshall Marshall, chartered financial planner. Welcome to Episode One Mindset Marketing Money. If you're a business owner, or if you're just fascinated by business, then you've tuned in to the right podcast because today we're going to be talking about the global financial picture, the impacts on business, and what you can do to help protect yourself from the effects.
Hi Ed, how are you doing,
Ed Marshall 0:38
Jed, great to be with you again.
Jed Wylie 0:40
It's fabulous, isn't it? Well, let's start with the money of mindset, marketing and money, because the financial picture has kind of changed pretty radically in just a few short months, hasn't it?
Ed Marshall 0:54
It has indeed we're in an entirely new world in the fact that we've got uncertainty in the marketplace like we've never had before. I mean, it's fascinating to see how governments have had to put lives ahead of money. There is more money being printed being creative right now, in order to make sure we've got economies to come back to. And all of this is off the back of the huge amount of uncertainty that this pandemic is caused and the paralysis, if you like, within economies that we've seen businesses, it's not as if business doesn't want to make money. But now a lot of businesses are finding it very challenging to make money.
Jed Wylie 1:36
Yeah, I mean, it's, it's fascinating actually to see humanitarianism breaking into economics and that governments have stepped up and looking after their populace. And, you know, as a by-product looking after the economy too, but yeah that's been, that's been heartening and warming to see I think.
Ed Marshall 1:59
That's right because capitalism needs a helping hand. And capitalism, if left unchecked, can put you in a dangerous position where economies can grow too quickly if not regulated correctly. The human cost to that can be really quite substantial, and where we are right now, we've seen capitalism's sort of a massive stumbling block, because if money can't be made, then people can't be paid, and the impact but the human impact of that is phenomenal. So yeah, governments occasionally have to step in, in order to help the path of capitalism, along these lakes, which is what we saw in 2008 of course in the global financial crisis as well.
Jed Wylie 2:50
And none of us wants to hear a repeat performance of that, but the, ‘R’ word – “recession” has kind of hoved into view once again, hasn't it so are we definitely in a recession and is this a global recession as well?
Ed Marshall 3:06
This is a global recession, absolutely because the world if you when you came into the beginning of 2020, you know the expectation that will by the 31st of December 2020, the global economy will be bigger than it was on the first of January. So, you know, that is capitalism for you, wealth is created as the global economy continues to grow yeah that was. Yeah, that's represented in the markets, and that's why you see stock markets going up by more than they go down. So when all of a sudden you've got a whole new loaded data coming in, that's saying whoa hang on a minute, the global economy is going to be smaller. At the end of the year than it was at the beginning because people can't do business because of a pandemic. Well, that does two things. First of all that knocks confidence in the markets. So the short term investors speculators sell and prices go down. But the bottom line is that yeah, the economy has hit a recession because you get two quarters without growth, you're technically in a recession. We're not talking here about economy's kind of flatlining or maybe shrinking by 1% or some sort of nominal figure like that puts you technically in a recession, these are gonna be big falls in economic numbers that we're seeing.
Jed Wylie 4:26
I think that any business owner probably wants to know two things about the recession, how deep will it be and how long will it last. And is there any indication out there in the markets that gives us any kind of clue to answering those two questions?
Ed Marshall 4:41
Probably every country is going to be different and that's based upon their infection rates, the resource that they've got available to them, how quickly they can get on top of the pandemic in their country and how quickly they can get their economies back up and running again. But if you're looking at the global economy, I don't know how you can put a number on how much smaller the global economy will be at the end of this year than it was at the beginning, but what I do notice is that the markets are already pricing in everything that they do. But, also there's a level of uncertainty priced into the markets as well because, you know, news that comes out from here and then could be good. Alternatively, there could be another curveball that nobody's anticipated that causes a bigger shock, you know, you get a second wave of infections or mutations, big governments defaulting on debt. So you've always got an uncertainty that is priced into the markets as well and what impact it has on you and your business is influenced on two things, what the support the government is going to give you, but also what opportunities, you're going to take in order to be able to trade your way out of this.
Jed Wylie 5:56
Yeah, I mean it's so much of a guessing game isn't it you know we just, we don't have enough information just yet to be able to make kind of coherent judgments. But the effects of this pandemic have had been very visible economically, very quickly and I think that's taken a lot of people by surprise.
Ed Marshall 6:19
What’s helped the markets and therefore, the business community as a whole is the fact that the Central Bank has stepped up to the plate to plate with the Bank of England, so they've said we'll create money in order to make sure that the financial markets and systems continue to operate. And the government has stepped up to the plate by saying that we're going to help a lot of people out by making the grants available by providing additional support with the furlough scheme, and with the business interruption loan schemes. So they're making a huge amount of financial support available and the Bank of England's actually making sure that the money is there. And so all of that is about making sure that we've got an economy to return as soon as we get towards a point where we can actually understand what the new normal actually looks like. And in the meantime, there's a whole lot of businesses out there who are saying why is this happening to me? And there are others thinking, well, how are we going to be able to take advantage and take the and seize the opportunity, the new normal represents but going back to your point, Jed, you're right. there is so much that we still don't know.
Jed Wylie 7:50
It's great that governments and the World Bank have stepped up to the plate and they're providing an assist of businesses. But I think that one of the really sad elements about this is that not all businesses are going to come out of this and certainly they're not going to come out of it unscathed and some of them aren't going to come out of it at all. And that's going to put pressure on the marketplace and on the job market. And depending I guess, on how many companies struggle or fail, then here there's going to be an implication really for how long the recession lasts as well.
Ed Marshall 8:28
And the economy and governments are relying upon business owners to be entrepreneurial. And to think about how they are going to trade the way out of this. I mean this is either about survival, and not everybody's going to survive, or it's about being able to thrive. People are still consuming services, people are still shopping, people are wanting things in different ways. You got to make sure that you've got a bigger market share, within your industry within your sector coming out of this than you have going in because you're absolutely right Jed, not all businesses are going to survive. It's all very well making loans available but if you don't have a business plan to trade your way out of this, the business interruption loan is not going to be a lot of points.
Jed Wylie 9:24
Yeah, it's interesting isn't it to see how businesses have to innovate and adapt. And I think some of this is reflected in the way in which Google searches have changed over the last couple of months, just as a couple of examples, searches for things like “iPhones” have dropped off by 50%, searches for “restaurants” or “cheap holidays” have dropped by 33% and 63% respectively, but you've had some other searches which have suddenly rocketed up so like the “Nintendo Switch” up by 48 times. Unsurprisingly “grocery deliveries” up by 57 times, “Dulux paint” up by 129 times. So it's an indication that there's still money in the system and there's still money to be spent. It's not disappeared.
Ed Marshall 10:17
But there are different directions which that money is now taking. And are you going to be a business that's going to identify all of these changes and how many of them are going to be short term. It's not simply based upon the physical lockdown, but how much of this is actually going to be a change that we see for the longer term. I even think once we're able to move around more freely again some habits and preferences are going to remain changed for the long term or maybe permanently. I mean if you look at the investments that supermarkets are putting into home delivery at the moment. This isn't with the expectation that within three or four months, they're going to be making all of those additional drivers redundant and getting rid of the vans, the expectation is that these trends are going to be here for a long time, or permanently because people aren't going to want to go back to doing things how they used to do it.
Jed Wylie 11:13
No that's right you've got this term, the ‘new normal’. And we’re just trying to get a grip on what the new normal actually means in practical terms; how are our restaurants going to innovate around, what is quite a tricky model to enact when you have social distancing enforced - you know there are some serious difficulties around this, and how they're going to innovate and respond to this is going to be an indication of their capacity to be successful.
You know when we go back to the 2008 crisis which you mentioned, there were some strange winners in all of this, you know, I remember that the UK box office, for example, took a record amount of money I think it was about £1 billion. Champagne sales soared because, well, I think, Stuart rose put it – he was the boss of M&S at the time, he said: “We're fed up of being fed up”. So, you know, it's not necessarily the obvious things that will kind of float to the surface of the new normal like antibacterial wipes and toilet paper. It's got to be other things that maybe we’re not necessarily expecting.
Ed Marshall 12:38
Yeah, if we think we think about how the new normal looks and how you as a business are going to make sure that you are present, to be able to capitalise on that, this is about providing to people what they want, when they want it securely and safely, making sure that their fears, if you like, are addressed well and so that actually they've got a level 10 confidence in dealing with you. I mean one of the concerns that people have at the moment would be perhaps going into a store where they feel that perhaps social distancing might be an issue - you know that experience isn't going to be one that they would enjoy, but they still want the items that are that store sell. And if you look at how businesses have been working on say ‘click and collect’ the simplicity of it, and some businesses here did even have an eCommerce website before the coronavirus but within a few weeks they've managed to build it. Then there's home delivery, and businesses have been able to do that in order to protect their existing customer base. But then they're also to able to take market share from those that haven't been able to pivot and adjust and adapt and move forward. And what I find fascinating with all of this Jed, is history is fast-forwarding. Businesses have created more in terms of technological capability and advancements over the last three months than they have in the last few years, you know we're literally going back to the future. And those technological capabilities and improvements that have been made, they are here to stay. Not only that, I absolutely believe that business owners and their clients are going to want more.
Jed Wylie 14:33
And the evidence of this is actually showing itself in the way in which advertising has changed over the last few months in terms of demand. Mitesix have done some research on this as they track about half a billion in advertising spend across quite a few different vertical markets, and what they've noticed is the consumer spending is increasing in quite a few key markets. I mean there's always the bomb-proof market of health and beauty, tech, groceries, you know anything that has a home setting those products or services are doing really well. But there’s a peculiar quirk in the numbers and that is that as you see that the increase in consumer spending, you also see also a drop off of the number of advertisers, It's partly to do with some of the natural mentality that business owners have when they're placed in an unknown situation where they don't know what is going to be happening to their money. They don't know how long they've got to subsist on the money that they have. And they can't see how things are going to change and improve and so very often you find that advertising and marketing are two things which get cut quite quickly quite early on because they're seen as a spend, which is a little bit crazy really because advertising and marketing are the things that get you customers so you know you're sort of cutting off that the head of the system there that brings you in business and income.
Ed Marshall 16:28
And so what you're saying Jed, is that this is the time, more than ever, that you need to be communicating with your clients, and at the same time, people are more receptive - there are more people listening right now than ever before. Actually, communication marketplaces are less crowded, there are fewer people saying anything at the moment.
Jed Wylie 16:50
That's exactly it. I mean in some, some of these markets, you can see conversion rates increasing by over 34%, you know and that's not because the marketers have suddenly become brilliant at marketing in the last few months what's happened is, you've got fewer advertisers out there competing for that space, and so consumers have effectively less choice so that means that with the fewer number of businesses that are advertising so they're going to acquire a greater market share of, of those customers.
Ed Marshall 17:22
So this is the time to be investing like never before. Yeah, one thing that fascinates me, advertising is just one small part of an overall marketing plan. And so is it fair to say that if your goal as a business, remains to prosper, and to thrive and to be able to deal with whatever curveballs come in along the way, you've got plan to be able to achieve that. Communication is going to be a part of that right? Those who are just simply throwing money at it, hoping that he's going to give them the answer are probably not going to make the same kind of progress. So how do you go about adapting your plan or creating a plan in the first place if you don't have one?
Jed Wylie 18:10
Well that's a very interesting question actually you know because if you are thinking about doing any kind of advertising and you're starting from scratch and the first thing that you've really got to do is crystallise the message that you're going to send out to your customers. That's the most important thing. And this can really trip a lot of business owners up because it's actually quite a tricky thing to do. We see advertising that's highly sophisticated. We see a lot of brand advertising which is not necessarily the right thing for certainly for small businesses and we can't necessarily distinguish between what is a good advert, and a bad advert. So, I've got a really simple framework which you can apply here which actually kind of gets you into the space where you can create a decent looking and sounding ad. This structure you can apply to pretty much every piece of marketing collateral that you've got; everything from emails through to social media communication - just literally everything. This is actually proposed by a guy called John Carlton who's a terrific copywriter over in America, and this is the simplest framework, you can possibly imagine. Here we go.
Number one, say, “Here's what I've got”. So this is what you're selling. So start off with something which is an interesting way of engaging your marketplace, like, like for example, you might say, “Do you find that you start your marketing with the best of intentions but find that it peters out” or, “Did you know only 2% of people will convert from your website is how you can convert the other 98%”. Or “What to do if your child isn't settling at school”, “The one thing you should never eat on an aeroplane” (which is absolutely everything). So what you're doing here is you're doing a call out to your prospects out there and you're saying, Hey, this is what I've got. This is what I'm selling. You don't need to overthink this just keep it really simple and straightforward. So that's the first thing.
And the second thing is, “Here's how it will help you”. All you have to do here is just describe the benefits of your product or service. People get a little bit confused over features and benefits, but very simply, if you were selling a car the feature of it might be that it has a GPS but the benefits to the customer are that it kind of gets you to where you want to be on time, unflustered and even if you've never done the journey before. The feature of a lawnmower might be that it has a 1200 watt motor but the benefit is that it cuts through tall damp grass effortlessly. Okay, so what you're doing is you're just listing out the benefits that help your customer.
And then the final section is, “Here's what to do next” and this the call to action. So it could be; click on this download that, watch this, get in touch, whatever it is you tell your reader what it is that you want them to do. So it's a dead-simple structure “Here's what I've got”, “Here's how it will help you”, “Here's what to do next.”
Ed Marshall 21:32
Your customer is going to be savvy, you know, people are, and as a result of that, this has got to be something that is authentic right? It's got to be a good representation of your business and what's important to you for your business. I mean, it goes back to say, Simon Sinek, when you look at everything that he talks about starting with ‘why’. So, you've got to make sure that you've got that consistency going through your communications as well. Right?
Jed Wylie 22:13
Yeah, that's true. I mean, if you get the opportunity to please go and have a look at Simon Sinek’ Golden Circles on YouTube. It's a brilliant - 10 minutes of your life well spent. He explains it so well and its a great place to start.
Ed Marshall 22:51
So right now, in the new marketplace that we find ourselves needing to communicate, like never before.
Jed Wylie 22:59
Yeah, absolutely. So, don’t roll back on advertising and marketing but push on with it. And test lots of different techniques that you can use out there, anything from Facebook ads which are, by the way, incredibly cheap at the moment, because there are fewer advertisers. But also try things like, email marketing, Google Ads even conventional direct mail pieces, and you can use that framework: “Here's what I've got”, “Here’s how it can help you,”, Here’s what to do next”. As an easy means of structuring your communication, It’s dead simple but the key thing is don't overthink it. Just do it.
Ed Marshall 23:53
And so here we are developing a plan to make sure that you're going to thrive, not just survive, so that you come out with a greater market share, than you had, going into the pandemic your business is going to be fitter than it's ever been. And this is all on the basis that there's never been more money in the economy than there is right now. The amount of money that has been printed, the amount of money that is being put out there to support businesses, to support employees, is like nothing we've ever seen. I mean this has been known as a sort of ‘quantitative easing infinity’ right, so the money is out there, and it is waiting to be spent. And so when we come out of this the economy is going to bounce back exactly how quickly, and exactly over what time period, you know, we have to wait and see. But one thing's for sure. The longer the time horizon you stretch out for the greater the certainty becomes - and this money isn't going anywhere, right now, but it will be going somewhere, so you've got to make sure that you are ready to continue to trade your way out of this and to capture every single opportunity that exists for you in your marketplace as we really start to see a resurgence in the economy over the next few months.
Jed Wylie 25:10
That's a terrific summing up actually what we've just discussed, and it's optimistic as well, you know, I mean that's one of the nice things about, about what about what's happening in a fairly, fairly dark time in the world that there is some optimism here and, and, you know, that's a good place for us to end episode number one.
We'll be back in a couple of weeks with another Mindset Marketing Money podcast, but in the meantime, everybody. Have a great couple of weeks and take care of yourselves and look after each other.
So, from us both, until next time take care and see you again soon.