Tuesday, April 14, 2020
Not long ago, business owners were setting ambitious goals for the new year - and the new decade.
This would be the year you launched your business or new lines of product.
This is the year you would set a record for annual revenue.
Or maybe, this was the year you decided to take an idea and build a business around it.
Instead, the harsh reality at present is that many small businesses around the world are grappling with the impacts of COVID-19.
And as we learn about the virus in real time, it’s hard to predict how long the pandemic will last and the effect it will have on businesses.
It’s deeply saddening to see what this virus has done to our communities, our lifestyle and business.
I know the amount of hard work, diligence and passion business owners dedicate to bring an idea into fruition - and turn that into a successful thriving business.
However, Covid-19 has quickly bought on a whirlpool of uncertainty in both our personal and professional lives.
Many of us may be wondering..
‘where do I even start?’
‘My luck has run out. How will I pay my mortgage?’
‘How do I afford to pay salaries?’
‘How do I keep my business afloat. I’m not far from filing for bankruptcy’
These fear-based narratives, when combined with being stuck in isolation can weave some pretty negative thoughts. It’s important to realize that panicking and going into distress is not going to help. You must rise up to the challenge and adapt.
Being naive with what’s happening and assuming things will go back to normal is not the mindset to lean on right now.
The economy is never going to be the same. We are going through a period that hasn’t been experienced in this lifetime.
As business owners, you have the skill set to think on your feet. This allows you to pivot fast and reposition your business to where there is demand. Those that are realistic and adapt to this game will see massive opportunities to reduce friction in their business.
Netflix didn’t lead to the closure of blockbuster. The video rental’s failure to adapt to market demands is what caused them to go out of business.
Even during a crisis, people want to maintain their lifestyle and regular routines as much as possible. Netflix provided the perfect product at the ideal price.
Their affordable streaming services and access to a wide range of content from the living room, saw Netflix’s revenue jump to $83 million.
This is in stark contrast to the Blockbuster video rental chain, which saw a $374 million loss and had to close hundreds of stores in that same period.
It is a proven fact - Brands that disrupt the way customers normally behave and provide a fitting solution are the ones that perform well.
Another excellent example is the web-conferencing platform, Zoom. As countries go into lockdown to enforce social distancing, millions of people worldwide are working from home and need to connect over the internet with their peers.
The virus caused Zoom downloads to double along with a 20% increase in their share price.
As you navigate through these temporary disruptions, having a business continuity plan is going to be indispensable.
It’s going to be easy to think that the rules of running a successful business have suddenly changed. But business continuity is all about building a resilient framework that enables us to respond effectively in times of crisis.
Keeping your customers at the center of your business strategy is more important than ever. That means finding creative ways to engage with them and think deeply about what they need as the world changes before their eyes.
So rather than having your head in the sand, hoping this will all go away, you can return to business quickly and build confidence.
Staying connected is what loyal customers will remember when we return to some semblance of normalcy.
When you hear from leaders of the world’s most successful companies, they all push their organizations to put the customer first.
At Amazon, that manifests itself in their company motto since Day 1. That motto means they can never become complacent and should always place the customer first.
In his first 2016 letter to shareholders, Bezos described what he meant:
“There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”
While you don't want to appear like you’re taking advantage of the situation, there are always ways you can help your customers in difficult times.
Ensuring your messages are relevant will humanize your brand and foster long lasting relationships with your customers. Usefulness of personalization tools here, that are usually used to drive sales shouldn’t be underestimated.
While it’s understood that some customers simply won’t have money to spend in the coming months, those that do will have different needs than before and you have to be ready to address them, whatever that means to your business.
It is likely you will have employees who won’t be able to perform their daily tasks outside of the office.
In such cases, it is best to reallocate work to such employees. They can be involved in work that contributes to building your brand.
For example, the chinese cosmetics company Lin Qingxuan was forced to close 40% of its stores during the outbreak. By moving their beauty advisors from these stores to become online influencers, they achieved 200% growth compared to the previous year.
Don’t add to customer disappointment by having to refund orders because you’ve run out of stock.
With the outbreak of corona virus, it has become clear that a diversified sourcing base is critical to success. Many businesses have become dependent on China and are now paying for this.
Sourcing from countries like India, Bangladesh and Indonesia are viable options to consider as they too have robust manufacturing infrastructures.
Just in time sourcing is a high risk logistics strategy and that has been made all too evident by Covid-19.
Ditching ‘just in time’ sourcing and understanding when demand will spike will allow you to forecast properly and stock inventory well in advance.
You should always strive for inventory efficiency for multiple reasons. Consolidating stock helps avoid overselling, gives you a clear visibility of all your inventory and keeps everything easier to manage. This makes fulfilling orders faster and prevents buyers from getting angry due to longer shipping times.
It’s important to offer buyers the same level of service and speed as always. Customers will have more questions than answers.
Inform customers how you are keeping employees safe and how you’re handling and shipping products. For example, Walgreens implemented several policy changes including delivery free waivers for prescriptions.
This is especially important if you sell healthcare products, food and other important items that people quarantined at home may need as soon as possible.
At present, there’s no end date for this pandemic so you need to discount strategically. Uncertainty and delays in supplies could mean that you’d be less likely to want to clear past stock.
What you can do is align your discounting strategy with the current crisis and help lessen its impact on the community. For example, Allbirds introduced a ‘buy-one-give-one’ model - allowing customers to purchase a shoe for themselves and automatically supplying a pair to someone in the healthcare community.
Online marketplaces are constantly changing. Successful high-volume e-commerce sellers are well aware of the fact that new competitors and products can threaten stability. The only way to keep pace with these changes is to be flexible yourself.
Cosmo Lady, which is the largest underwear and lingerie company in China, shifted its focus to selling on WeChat. Brands can leverage WeChat’s user base and use its integrated payment system to complete ecommerce transactions. In doing so, they place less pressure in selling from one area and are able to stay relevant to where the market shifts.
Customers will expect your business to change during the pandemic and will look for updates to confirm whether you’re still open.
Some will turn to google your website, but many others will try to find your most recent post on Facebook and Twitter. If they can’t find you on social, they’re less likely to trust you’re still open.
Be sure to regularly update your Facebook page so your customers know you’re still open for business.
Investing in paid marketing can drive plenty of extra traffic, sales and loyal customers for small budgets.
With over 70% of the US population on Facebook, Instagram and Messenger, Facebook ads is the largest opportunity to get in front of and reach your audiences on social media.
As I write this, Facebook advertising costs have dropped significantly allowing brands to reach diverse audiences at low costs.
While corona virus is affecting everyone, how you respond and adapt to it is the name of the game. Brands only need to know how to stand out from the crowd. While most businesses are panicking, smart ones are taking advantage of changing customer behaviors and doing whatever they can to minimize losses.
As everyone pulls through this difficult time, it’s important to remember this is all temporary. The team at scarlet sieiro hopes you stay safe and healthy.
Are you tired of reading the same regurgitated information? Do you want to learn fresh, new marketing tactics your competition doesn’t know about?