27 Oct Covid-19 Business Impact Survey – the results are in
We asked – and you answered! Our Business Impact Survey, carried out in lieu of our cancelled 2020 Summit, gave SMP members a chance to air their thoughts and concerns to enable us to better understand what matters most right now.
With a response rate of 40%, the survey certainly wasn’t all doom and gloom. Almost three quarters of respondents believing working from home presented a huge opportunity for direct mail while others reported a raft of new business wins.
Just 2% felt that the pandemic was the death knell for letters; the overwhelming majority saw it as a tragic but short-term occurrence. Even at the height of the pandemic, 83% of those who responded believed their businesses would survive.
Impact on the workforce
Not that times haven’t been tough. Although introducing new working practices to become COVID-compliant in itself was not too bad for most (72%), almost all businesses had to furlough staff (96%) with respondents furloughing an average of 39% of their workforce. Almost one fifth (19%) still had staff on furlough.
Members have also had to let staff go – a total of 62% of respondents had to make redundancies, losing on average 12% of their workforce. The majority had asked employees to work from home – 86% – with almost a third (33%) intending to continue with the policy.
Two thirds of respondents had planned some form of capital expenditure during 2020, whether that be switching premises or investing in equipment. Of these, half had delayed their plans and 43% had cancelled them altogether.
Impact on mail production and future planning
Mail production was down 46% on the same period last year and by quarter four this year, 63% predicted production to be reduced compared with 2019. 68% expected turnover to have fallen by an average of 41% this year.
The predominant reason for a reduction in volume was customers not being open for business. Next, was companies cutting budgets with customers ceasing trading being only the third most cited reason. Equally, some reported that their volumes had been boosted both through producing COVID messaging and winning new customers, as businesses looked to advertise a change in services or opening hours.
Members had already factored in a predicted decline in letters of 5-7% across this year but more than half (57%) reported that those volume forecasts had been hit by between 10-20%.
Most believed recovery to predicted pre-COVID levels would not be in the second half of 2020 but during 2021 (65%).
What does recovery look like?
The vast majority – 91% – believed recovery would be by sector, with retail closely followed by e-commerce. Over half (60%) said customers were focusing on a mixture of client acquisition and retention; 63% were looking for innovation and 17% planned to design and produce new types of packs to reflect this.
With so many people still working from home, this was regarded as a huge opportunity, with 73% saying they would be persuaded to slow or even stop moving budget from physical mail to digital. More than half – 55% – a believed that data from JICMail could make a difference and nine out of 10 stating they thought Royal Mail could help.
For instance, figures from JICMail found the engagement rate of mail had increased to a record 96 per cent in Q2 2020 – a five per cent gain on the same period the year before. All mail was interacted with 4.5 times in the same period and is significantly higher than the average frequency in Q2 2018.
SMP Chair Judith Donovan commented: “Our sincere thanks go to all members who took the time and trouble to complete the survey. Our annual summit is usually the time when we get together to exchange ideas and news so we wanted to give you the opportunity to interact with us despite the event itself being cancelled.
“While it’s extremely sad that more than 60% of respondents had to make staff redundant, it’s heartening to see that the vast majority see the pandemic as a tragic but short-term occurrence and even when COVID was at its height, you believed you would survive the storm.
“Direct mail has always been a trusted way to communicate and with so many people now working from home it’s having an even bigger impact; people are at home to pick it up read it and digest it rather than stepping over it on the doormat as they fly out of the door to get to the office.
“It’s also great to hear that members have reported a positive impact on volumes and have won new business with clients looking to tell their customers they’re open for business or have changed their offering. Despite all the gloomy national news headlines, it’s clear that the current circumstances present opportunities for direct mail.”