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Don’t let a poor economy stop you from starting a business

startup Image

DILLON LOUW, Digital Content Creator at Digital Content Lab reviews what Netflix, Microsoft and Disney have in common and if its advisable to start a business in a recession.

Netflix, Microsoft and Disney and other highly successful brands were all founded in poor economic times. This goes to show that even though we find ourselves in a shrinking economy, there are feasible business opportunities for savvy entrepreneurs.

Need more evidence? The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years. More than 50% of all companies on the Fortune 500 list right now were founded during a recession, or under poor economic conditions.

A closer look at great businesses born during recessions
Uber

Garrett Camp and Travis Kalanick originally founded the ride-hailing company as Ubercab in March 2009. The idea itself came after they could not find a taxi ride one night in Paris.
Fast forward a few years and in December 2015, Uber had reached its 1 billionth trip and by June 2018 its 10 billionth trip.
Аѕ of Јаnuаrу 2021, the аррrохіmаtе еѕtіmаtіоn of Ubеr’ѕ net worth іѕ $100 bіllіоn. Furthermore, one of Ubеr’ѕ іnvеѕtоrѕ, Веnсhmаrk, ѕауѕ thе firm іѕ соnfіdеnt аbоut Ubеr’ѕ орtіmіѕtіс future.

Airbnb

Airbnb is a community that was born in 2008 when two hosts welcomed three guests to their San Francisco home. The idea was initially conceptualised during the Industrial Design Conference, where the founders initially focused on providing short-term living quarters, breakfast, and business networking opportunities to persons who were unable to find a hotel during the conference.

Airbnb has since grown to 4 million hosts who have welcomed over 800 million guest arrivals to about 100,000 cities in almost every country and region across the globe.

WhatsApp

Former Yahoo! employees Jan Koum and Brian Acton created the encrypted messaging platform WhatsApp in 2009 as a means for people around the world to message each other quickly. The platform rapidly gained traction in regions that do not have access to the same network capabilities as the U.S.A. because of its ability to operate via Wi-Fi.

In 2014 Facebook purchased the app, which now has more than 2 billion users globally, for a staggering $19 billion.

Netflix

Legend has it that Netflix founder Reed Hastings was motivated to start an online DVD rental by mail service after incurring a $40 fine from Blockbuster for a DVD that was returned late. Ironically, the new-born company nearly crumbled when Blockbuster made the fatal mistake of refusing to buy it out during the dot-com bubble burst of the early 2000s.

Netflix weathered the storm caused by the dot-com bubble by means of its incredible innovative spirit to spearhead the streaming on-demand video service we know today, leaving Blockbuster permanently in the dust. Today, Netflix is worth nearly $34 billion and growing, thanks to the current demand for home-based entertainment.

Three recession-proof sectors
There are three business sectors that appear to be ‘recession-proof’. While the first may seem a little morbid, especially given current times, they all make sense and are worth noting. A start-up supplying innovative solutions to these types of businesses in a recession are likely to succeed as they will benefit from derived demand in these industries. These include:

Death-care services

Businesses offering services related to death, including funerals, cremation, burial, and memorials, tend to be some of the most recession-proof operations. The reason for this is that death-care services will always have a steady stream of business regardless of economic conditions. According to Business Insider, South Africa’s funeral industry is estimated to be valued between R7.5 billion and R10 billion.

Education

South Africa’s education system is under massive pressure to upskill individuals and get them ready for the job market. South Africa is experiencing a skills shortage in several of its business sectors which emphasises the need for service providers that offer efficient, affordable and accessible adult education. The education industry has faced massive challenges as a result of COVID-19 lockdown and has had to adapt processes in order to survive. Industry Leaders like the IMM Graduate School where students have experienced no disruption to their academic year and have seen increasing interest in South Africa and the rest of the African continent for their online distance learning education offering.

Security

Despite poor economic conditions, the private security sector has also been booming of late. Private security is an estimated R45 billion industry showing a growth rate of 15% per year. There has been an alarming increase in the crime rate over the years and private security firms are taking advantage of this to expand their operations.

Services industry in the spotlight
What appears to be clear from the above examples of recession proof businesses is that each of these fulfil a basic need; the need to bury our dead, the need for education to increase our earning potential and the need to keep ourselves safe. All of these as well as the many businesses that were founded in a recession appear to have one other thing in common – they are all services businesses. And furthermore, those least impacted by COVID-19 are delivering an online service; Netflix offering low-cost entertainment from the safety of your home and WhatsApp offering low-cost communication via their platform no matter where you are.

It could therefore be concluded that businesses that start up in this current economic climate must consider offering a low cost, online service that is easy and safe to access while fulfilling one or more basic needs. If you can figure that out, perhaps you will be the next big brand that started up in the 2021 recession.

In the meantime, prepare yourself and sign up for one of IMM’s programmes in Marketing, Business or Supply Chain. Start topping up on your knowledge and skills so that when that big idea comes along, you are ready to act.

If you would like more information on what the IMM Graduate School has to offer you, follow the link to our website https://imm.ac.za/.

Top 7 marketing trends in 2021

marketing trends in 2021

Today’s marketing world travels at breakneck speed, and in order to succeed in this industry, you have to stay ahead of the game. Throughout 2020, and the COVID-19 pandemic, we saw consumers shift their shopping habits from in-person to online. This shift in consumer behaviour has led to a substantial change in the way marketers reach consumers.

The pandemic has significantly impacted the way consumers search for, access, and utilise goods and services. It is important that marketers stay with the times. In this blog we review and discuss the top trends in marketing for 2021.

 

 

Inclusive marketing image

 

1. Inclusive marketing

Inclusivity has never been as significant as it is today. HubSpot (2021) defines Inclusive marketing as “campaigns that embrace diversity by including people from different backgrounds or stories that unique audiences can relate to”.

While some inclusive campaigns try to break stereotypes, others simply aim to reflect or embrace people in the real world.

In 2021, we will see more marketing campaigns that include media and subject matters that cover a variety of cultural backgrounds, religions, race, etc., as well as representation for people with physical and learning disabilities.

 

 

 

Increase in brand-to-brand collaborations2. Increase in brand-to-brand collaborations

Other successes like McDonalds’ collaboration with Travis Scott have encouraged some deep-pocketed organisations to have their marketing departments put a renewed focus on brand collaborations with celebrities in 2021.

Collaborations like this between corporate brands have proven to be largely beneficial to both parties, as these types of unexpected partnerships create a social buzz and allow for cross marketing by both brands to their customer bases which is a big advantage in today’s world where customer attention is more difficult to grab than ever.

These types of celebrity and brand collaborations often do not require celebrity endorsement fees, which is an additional advantage in an era of tightened marketing budgets.

 

Content is still king3. Content is still king

Content marketing has become the marketer’s main tool for attracting customers and boosting sales. The marketing landscape is likely to remain this way for years to come.

Today, most businesses pay for content-related ads and invest to generate unique content or publish blogs. According to the Content Marketing Institute (2021), content marketing has helped 96% of top brands in building trust and credibility with their audience.

In the current marketing sphere, content should form the core of your marketing strategy. With a vast amount of information freely available everywhere, and to everyone, most businesses already know how to attract their customers. However, what is crucial is the actions they take. The main goal should not be to just provide people with content and hope for a positive reaction. Instead, it should aim to encourage prospects to share and engage with your content.

The content you generate unlocks the key that connects your brand to your audience. This connection is important to generate trust which will lead to loyalty.

 

Video advertising4. Video advertising

n 2020 we saw an overnight obsession with TikTok amongst Millennial and Generaton Z users, video has truly taken marketing by storm. According to a study by Microsoft (2020), the average human being has an attention span of eight seconds. This makes it extremely difficult for marketers to capture the attention of their audiences.

Various other Social Media platforms also allow you to create short videos, for example, Facebook and Instagram. These videos can be anything from 10-seconds to three minutes, providing you with a sufficient amount of time to respond to questions, demo a product and more. Not only are videos informative and engaging, but they can also provide large chunks of information in a short time. Therefore, video advertising helps in demonstrating your offering in a better way than other ad formats, in turn leading to a higher conversion rate.

Furthermore, app developers have been updating their features and are focused on driving and creating customer loyalty by reducing the number of times consumers switch between various applications, especially where video is concerned. A great examples of this is Instagram’s new ‘reels’ feature. As these companies begin to promote these features, users get hooked on them, which makes it a great option for marketers to showcase their offering.

 

eCommerce will continue to boom5. eCommerce will continue to boom

Due to the COVID-19 pandemic, many retailers and brands have transitioned to a permanent online operation. According to Forbes.com (2020), online spending in 2020 was up 77%. Another example of this is international ecommerce giant, Amazon, who according to businessinsider.com (2020) have recorded their highest eCommerce growth in more than 3 years.

There have always been several benefits to shopping online, with the convenience of it being the biggest drawcard for consumers. In 2020, though with the COVID-19 pandemic, shopping online is not only convenient but also the safest way to do your shopping. Consumers today have become very used to this way of life, and many of them only now realise the benefits to online shopping including the excellent customer experience. This only means one thing for 2021, eCommerce will continue to boom.

 

 

Social commerce 6. Social commerce 

Similar to the popular omnichannel approach, social media marketing now offers users the opportunity to shop ‘in-app’. This in-app shopping has turned into a major trend among millennials mainly due to the convenience of it. Consumers today are becoming opposed to continue their search or purchase products when they have to switch between applications to make their payment. This is because users do not want to be disrupted, they want to engage with a brand and shop online all in one place.

It is a well-known fact that social media today is the largest and most beneficial platform for marketing online. Now, with the launch of Facebook Shops, Instagram Shopping and Pinterest Shopping Ads and Catalogues, social commerce will become one of the most influential marketing and commerce trends of 2021.

According to Smart Insights (2020), 55% of online shoppers now make their purchases via social media platforms like Facebook, Instagram and Pinterest, and 71% of users turn to their social media for inspiration for shopping. Therefore, it is now of essence to offer your products and services and make them ‘shoppable’ on social media. As we see more organisations make the switch to digital to adjust to the COVID-19 pandemic, this will be an essential tactic if you wish to remain competitive.

 

Voice search7. Voice search

The CEO of Google, Sundar Pichai, revealed that out of the five searches conducted on an Android app, one is always a voice search.

Voice search is becoming so popular because it provides consumers with information at any given moment: while traveling and they do not have much free time, or when they can’t type, or even when they’re just too lazy to type. For consumers today, it is all about convenience.

Therefore, marketers need to start optimising their content for voice search. The best way to optimise content for voice search is to firstly, focus on phrases and longtail keywords. This makes sense since voice searches make use of a more natural language. The way we talk is completely different to the way we type.

Secondly it is to anticipate specific questions that are asked in a conversational tone, as people are inclined to ask their devices questions. A great example of optimising your content for voice is to start some of your paragraphs by asking questions such as why, what, where, and when.

While none of these trends are completely new to digital marketers, they are all gaining momentum and as the marketing world continues to transform in 2021, these trends will become critical to organisations that wish to remain competitive in their respective industries.

As the world continues to experience the lasting repercussions of the COVID-19 pandemic, the business world will continue to transform digitally. It is now more crucial than ever to keep your marketing strategies current and focused on the changing behaviour of your target audience.

Big things often have small beginnings

The role of social media in content marketing

By Wendy Monkley

CEO Digital Content Lab

Attention with a Capital ‘A’ is what every marketer wants for their brand, especially online. But what makes people follow or unfollow a brand? Much research has been done in this area. Time and time again we are told what we probably already knew – that people follow brands that are interesting and entertaining. The term interesting not only refers to the products and services that are on offer or their relevant promotions and discounts, but also the content associated with that brand. This should make sense, since people (in general) do know what they want, right?

When I first began my transition from ‘traditional marketer’ to ‘digital marketer’ some 6 years ago, I wondered what the point of this endless and seemingly useless supply of content was that brands seemed to produce faster than consumers could read. How does an inspirational quote like “Big things often have small beginnings” contribute at all to the marketing strategy and objectives? Quite honestly it all seemed like a massive waste of time and resource. It took me years of learning and on-the-job practice to fully grasp the power of content. Now, when asked the questions “What is the point of all this content?” and “What does social media actually do?” by brand managers, marketers and CEO’s alike, I answer with this simplified three stage explanation:

First, as with any promotional strategy, the objective for your social pages should be to build awareness of your brand and your product or service offering. In social media speak, your efforts of raising awareness builds a community of like-minded people. Unlike traditional marketing, this effort is extremely measurable by the number of likes/loves and followers you collect along the way. The content that you create for this purpose needs to appeal to your ‘perfect customer’ so that when the time comes for them to consider purchasing, your brand is already top of mind. If fact, eighty percent of social marketers say increasing brand awareness is their primary goal on social (Sprout Social Index, 2019). And for many, this is where it stops.

But, building a community is just the beginning. You now get to speak to your followers – your captive audience. Again, unlike traditional channels of marketing social media provides you with the incredible opportunity to engage with your future customers and have them speak back to you. At this stage of the game, it’s got to be all about them. You need to be listening, observing, learning what they like and love so that you can give them more of the types of content that appeals to them. Now is not the time for hard-selling offers – that will come later. You rather want to be educating your followers about your brand, what you stand for, your company culture and you want to introduce them to and educate them about your products and services. Essentially, you are building trust. If you do this part well, the magic starts to happen – increased traffic from your social pages to your website. After all, isn’t this really where you want your customer to be? If you need further convincing, know that when asked what content type they want from brands on social, the majority (thirty percent) of consumers surveyed said they wanted links to more information (Sprout Social Index, 2019).

And now the unveiling! Because your future customer visited your website, you have the privilege of getting to know them better. Through Google Analytics you can delve deep into several visitor insights; Who are they? What are they interested in? What technology do they use? Where do they live? How old are they? What media to they read? Where do they spend their time when online? And more. It’s here where the true power of content marketing is unleashed. It’s time for those great offers and hard-working ads. Here’s the thing, with all this information about your prospect, you have the power to create an offer that truly resonates with them – and with remarketing technology you can show them your offer in the online spaces that they frequent (outside of your social pages and website). And since they already know you and trust your brand, it’s an easy step for them to click back to your website and make a purchase. None of which would have happened if not for the small beginnings of an inspirational quote.

The three stages above do not necessarily happen in sequence. That would be far too easy. This means that at any time social marketers should be creating three types of content; content that builds communities, content that engages and educates and content that sells. All of which should be aligned to the needs of the customer you want to visit your website and buy your products or services.

The above three stage approach to social content is a sure way to drive real, measurable returns, but it takes time and persistence.