How businesses and brands responded in the German market
The COVID-19 pandemic challenged businesses along the value chain as well as their employees and customers, writes Nicole Wilhelm
It showed up how essential it is for corporates to have the ability to react to changes rapidly and act fast in order to be successful within as well as beyond the crisis. Companies fit for the digital era were in the better position. They quickly found new ways to meet modified customer demands or reach new clients and markets.
Although restrictions had begun to be lifted, a second wave of Covid infections is now bringing the pandemic lockdown back again.
So how have businesses fared so far?
Online presence allows fast customer information and communication through different channels, alternative order and distribution processes as well as the ability to give digital advice and consultation. The list of opportunities for businesses to adapt to the crisis is long, ranging from leveraging their manufacturing capacities to produce hygienic equipment, partnering with businesses from other industries, implementing new digital offerings, free online access to products and services, and using digital communication channels in order to stay in touch with their customers.
Knowing what customers need at any given time proved essential and responding with the right content and care, was crucial to establish a long-lasting relationship through this pandemic crisis and beyond. The focus should be to support customers in a meaningful, human and relevant manner.
But it is important to keep in mind that customers are also experiencing disruption within their daily lives, like having restricted access to goods and services, anxiety and frustration in their work life or at home. They are struggling to navigate through these many friction points and need to adapt to the new way of interacting with companies.
In these uncertain times, people want to be understood, experience commitment and communication from the brands they love. Customers are now craving for comfort and connection and there is need for an adapted customer experience which is more human across virtual channels. Businesses need to consider, that their actions today influence the present business results, but also define customers loyalty in the future.
How German companies reacted
It is clear, that the German market has undergone a similar development as other parts of the world and likewise experiences the same challenges. But how do companies, brands and industries in Germany react? How do they stay connected to their customers? COVID-19 affects businesses differently and each one needs to find solutions to counter steer the development.
Those industries which are being hit extremely hard – such as the tourism industry – need to become creative in order to generate revenues. The German wide hotel chain Achat Hotel (www.achat.de) is just one example of those offering their vacant rooms for home office purposes. Smaller hotelsare offering special wine and service packages online. The online travel platform Urlaubspiraten (www.urlaubspiraten.de) offers a special deal for streaming Disney movies as travelling currently is not allowed and the online travel agency Fit Reisen (www.fitreisen.de) uses their blog to inform visitors about wellness & beauty, healthy nutrition or travel destinations. “The communication strategy and its focus need to be adapted to the actual situation, as in this case Fit Reisen did. It allows them to keep interest and awareness of their loyal customers and build a long-lasting relationship” says Cecilia Floridi, Managing Director of DataLab from Duesseldorf.
Others suffering from the pandemic are the entertainment, sports and lifestyle industry. They are obliged to close their service completely but stay in touch with their customers through digital solutions. The fitness companies McFit (www.mcfit.de) or Fitness First (www.fitnessfirst.de) grant their members more flexibility by changing the terms & conditions and stream online courses to train at home.
Museums, such as the German Museumin Munich (www.deutsches-museum.de) are offering podcasts or smaller museums like the Mühlhäuser Museen (www.mhl-museen.de) are displaying online videos as a walk-through and an educational way to stay in touch with visitors. Same goes for eventim (www.eventim.de) offering videos, life streams and interviews with musicians to watch at home or regional providers like Rausgegangen(www.rausgegangen.de) meaning „going out“ changed its name to Dringeblieben (www.dringeblieben.de) meaning „staying inside“ in order to adapt to the restrictions by bringing culture and concerts into the living rooms.
Manufacturers, mostly living off direct and personal sales, need to rethink their way of distribution, such as the German family-owned business Vorwerk (www.vorwerk.de). Vorwerk is a manufacturer for home products such as vacuum cleaners, kitchenware or flooring. For the crisis they changed their way of personal distribution and direct sales into digital sales and engagement.
Extending of customer contact points into digital and social media
Other companies extended their customer contact points into digital and social media in order to inform about COVID-19 itself, their services during lockdown and increased security, to ‘Thank’their employees for all the effort they are putting into their work, promoting to help each other during the crisis and competitors even cooperating with each other. This was done by the three biggest drug stores in Germany dm, Rossmannand Müller (www.dm.de, www.rossmann.de, www.mueller.de). They sent out a joint newsletter asking their customers to stay safe, avoid hoarding and support solidarity. The same goes for the automotive manufacturer Daimler (www.daimler.de) which uses social media channels to communicate official information on safety with the Corona virus. They further called out for solidarity, power of endurance and social distancing. Bofrost (www.bofrost.de) an international food brand offering home delivery for deep frozen food, uses Facebook to inform about their service offerings and enhanced security during the pandemic. The discounter Lidl (www.lidl.de) uses social media to promote its app which includes a functionality to create different shopping lists. This is useful for volunteers who want to support the elderly by going shopping for them.
Good examples are brands that are offering additional services or enhanced product features to their customers, such as the GermanTelekom (www.telekom.de) or Aldi (www.aldi.de). Both grant additional data volume for free to their customers to stay connected with their loved ones. The online photo shop Cewe (www.cewe.de) executed a „Thank you campaign“ by giving away 100.000 post cards (incl. postage) for free. These communication campaigns stay close to the core business and are relevant and emotional for its customers. The German media company Gruner + Jahr is giving free access to their magazines for people staying at home (https://aktion.grunerundjahr.de/deutschland-bleibt-zuhause), whereas the German basketball team Alba Berlin (www.albaberlin.de) is offering a daily online sports lecture for kids.
Those retailers with an online presence are in a good position. “We observed a significant sales shift towards digital channels, especially in March, decreasing media spendings and an accelerating trend towards personal consultation and live sales streaming offers through digital media” says Jens Bäuml, Managing Partner of Hanse Executives in Munich.
The offer and communication strategy has changed as many people are working from home. The online retailer MisterLady (www.mister-lady.de) for example started to promote its leisure wear more prominent, showing that cosy clothing can be fashionable, too. The optometrist chain Brille24 (www.brille24.de) is offering an personal online counselling and the online market place Westwing (www.westwing.de) created different segments called „home product worlds“, which they asked their customers to categorize themselves into. The sports chain Intersport (www.intersport.de) informed via its newsletter, that it is supporting the independent retailers by allocating a part of its online sales to the stationary budget which is very relevant for their franchisees.
Small local retailers, that have no online shop, no CRM or customer data available, must be even more creative. How are they able to stay in touch with their customer during the crisis? How can they continue their service and reduce the economic effect?
It is key to quickly change the way of engaging with customers by offering digital communication (e.g. WhatsApp), setting up an own online shop, co-operating through regional platforms such as www.lozouka, or offering products by partnering with other local stores (e.g. grocery store). Restaurants for example offer daily food at local grocery stores to heat up at home. Local hairdressers deliver personalized hair colour to do yourself at home. And of course, in order to keep up the cash flow, retailers and shops are in need for their customers to buy gift cards and vouchers for any purchases.
All these examples show, that communicating with and refocusing on the customer base is a key defence strategy during this crisis. And those businesses running a loyalty program are in possession of the best asset in order to stay in touch with their most loyal customers. In comparison to businesses owning base customer data only, a loyalty program allows you to segment customers for an enhanced and emotional communication approach. The importance of loyalty programs can be observed in the reaction of the aviation and hotel industry. As their members cannot collect points or miles and have limited options to redeem them, they are prolonging the status as well as skipping points expiry in order to keep their most customers happy. “Airline and hotel programs secure their customers´ loyalty by immediately taking away the threat of status and mileage expiry. Communication should be early, clear and unconditioned”, says Andreas Koch, Trusted Advisor of CRM & Loyalty and former Head of Lufthansa Miles & More program from Frankfurt.
So, for me, it is obvious, that companies and brands investing in effective loyalty strategies and emotional customer communication will be the winner of this crisis.
Nicole Wilhelm is a loyalty specialist based in Munich, Germany bringing more than 15 years experience in the area of Loyalty Program Management, Campaign Management (digital/mobile/offline), Customer Insights and supporting IT solutions to the table. Industry experience in Retail and FMCG, Travel Hospitality and Aviation, Online and E-Commerce, Media and Logistics, focusing on data driven and result-oriented marketing activities in order to increase sales profitability and to guarantee effective usage of marketing and sales budget.