The 3-Horizon Approach to Recovery and Shaping the Next Normal
Massive changes in customer behavior and business outlook have put marketing executives on the spot for making key decisions quickly and appropriately. Responding to the new demands of the current climate, marketers need to manage the crisis quickly and pragmatically, while maintaining a clear strategy on how best to approach recovery.
McKinsey’s Global Consumer Sentiment Surveys, which monitor how consumer behaviors are changing during the crisis, show consumers are turning to online consumption in record numbers (though for many businesses, this boom has not offset the deep losses offline). We’re also seeing an uptick in first-time users and in established customers’ usage across several categories, such as entertainment streaming, personal and professional video conferencing, e-sports, restaurant and grocery delivery, online education, and online fitness. Confinement is driving significant trial of new online and reduced contact ways of shopping. More importantly, 40% to 60% of consumers showing these new and intensified behaviors say they will continue them even after the effects of coronavirus subsides.
How are marketing executives supposed to respond to all of this, answering to their companies, employees, and customers? A three-horizon approach can help.
The Three-Horizon Approach
To achieve this, marketers need to take on a three-horizon approach, simultaneously executing the following steps to the same high standard:
Navigate the Now
Now more than ever, managing the human element is critical, especially during the crisis, and they need to show that they are there for their people and customers.
The current crisis has brought into stark reality the importance of brands meeting the moment with authenticity. To do this, marketers will need to put even more focus and rigor around their value propositions and customer experience through purpose-driven customer decision journeys that create trust, confidence, loyalty and differentiated experience.
Plan for Recovery
Marketers need to be ready to address demand in the future by considering if and how to re-architect their current marketing models, approaches, and tools to get ready for the turnaround.
What this crisis has shown us is that the need for speed, agility and adaptability has increased. Marketing leaders should keep their main marketing strategies and tools at their disposal while putting a greater emphasis on speed and agility to be able to quickly pivot.
Agility is the core of any success now and in the future. You need to be taking in signals each day. If you’re not doing this, then you’re not able to get past first gear. As you get to second gear, then you are able to get a better understanding of what the signals mean and how they will impact your line of business. From there, you can begin to plan for the new hallmark moments that emerge from this and have properly trained the agile “muscle” in the marketing body to react when consumers are ready.
As such, an agile operating model is more critical than ever. Shorter cycles will allow for more immediate course correction and adaption. Furthermore, a regular cadence of ceremonies including daily stand-ups and sprint planning allow for cross functional teams to work in lock step with one another. The COVID-19 pandemic is creating new realities on a daily basis, and there is no single recovery approach that will ensure your brand is communicating in a relevant and appropriate manner.
Shape the Next Normal
Marketers have a unique opportunity to work with the senior leadership team to start reimagining the future using deeper insight and foresight that can help inform longer-term recovery strategy. While it’s too early to tell what the “next normal” will look like, understanding what is driving consumer change and specific needs particular consumers have will help sharpen our understanding. Pace of speed and adoption are forcing a rethink, and it’s important that marketers have an understanding of their changing value proposition and how they can win back customers post-coronavirus.
For example, according to the findings of our surveys, Chinese shoppers were doing the bulk of their shopping online while the country was in lock down. Since restrictions have been lifted, online shopping has remained elevated, suggesting that many of these behaviors are here to stay. In addition to this, Chinese consumers have continued to buy certain product categories at elevated levels while others have declined, suggesting their fundamental purchasing patterns have changed.
COVID-19 also has been a forcing mechanism for businesses to more deeply adopt digital technology. At the core of this shift will not only be adoption; the shift will require a deeper, data-driven understanding of the customer. In order to serve customers better, some businesses are onboarding Customer Data Platforms (CDPs), which allow for more personalized interactions at scale. As businesses rush to satisfy customers’ needs in the short term, the impact of these new levels of service will become the next norm as expectations for personalized digital experiences will be greater than ever.
One thing is certain, we’ve never had an experience like this before. However, much of the experience has been shared globally, meaning we can learn from markets farther along in the process. In a time when there are so many unknowns, marketers should use that learning to better plan their responses going forward — carefully striking the right balance between short-term adjustments, preparing for recovery, and shaping the “next normal.”
The author would like to thank co-authors Tamara Charm, senior expert, and Adam Broitman, senior expert, from McKinsey & Company for their contributions to the article.
Kelsey Robinson is a partner at McKinsey & Company. She partners with industry leading, consumer-facing companies to drive top-line growth through ideation and implementation of strategies, including customer analytics and insights, e-commerce and omnichannel, digital marketing and customer acquisition, CRM personalization, category strategy, and store productivity.