New customers aren’t calling; current customers look for help, a fragile supply chain, the bailout like a deflating parachute, and free-falling income. Have we hit bottom because of COVID-19? Businesses face unknown territory and few answers, but can soften the blow with strategic moves.
We’ve asked over a dozen business leaders and here are some the answers to the following questions:
What business areas were the most affected?
“Services, optimization, HR”comments Bruce Dalton CEO of Royal Advisors
“Sales as some customers decided to postpone their programas, and sales to new customers as some of them were reluctant to start a new program” Victor Manuel Anaya Bourgoing Managing Partner of ActionCoach
“Investments. Because we are a integrated energy solution for companies, this crisis made them to stop projects and investments so we are stopped. Even though that, we didn’t fire anyone and we are paying full salary.” Commented Luis Landeros CEO of Triple Transducer
How did you adapted your business differently?
“We are heavily investing in technology, as our clients are adapting permanently, on utilizing technology for services. We are also changing our views on resource utilization, to provide more flexible and financially viable services to our clients after this pandemic is over. Lastly, we are implementing an aggressive cost reduction exercise, to remain financially viable during this crisis.” Said Saad Ilyas CEO of ASLPM
“We dramatically increased our outbound sales & marketing efforts. We focused on low hanging opportunities to upgrade existing customers. We increased our content marketing on social media to raise brand awareness for when the market rebounds. We also told our prospective customers that now is the best time to review products like our's since they aren't as busy as usual.” Commented Yukon Palmer CEO FieldLogix
“We have pivoted to market needs pushing ahead on products that focus on immunity, stress and energy/focus.” Said Tyler Malin CEO RDCL Superfoods
“We are conducting remote meetings and having great success since our services are 100% Covid - Free” Mentioned Jorge A. Ortiz CEO of Tan Tan
“Took everything to Zoom and telephone, offered more prepaid packages to reduce cost, hired marketing team to better position me in front of those who need my services” Said Sage Breslin, PhD CEO of Sage Wisdom Institute
“We have expanded our distribution of free licenses as people get to know our product. We also created a partnership with a Boston company to distribute a Crisis Assessment and Action Canvas, so we now have a specific canvas model that runs in our software that helps other companies to understand the moment we are and to plan short, mid and long term actions to readjust their business too.” Said Peter Berndt de Souza Mello CEO of Dyress Corp
“I have always said CASH is King & LOW BURN RATE is Queen. Some businesses are burning 1.1 million a month some over $20 million but some have a nest egg for 20 years & can continue to pay staff. What I see changes is everyone will finally listen. It’s time to thrive! “ Commented Mark Hamade Partner at Stealth LLC
“Our clients were living rapid change in real-time, and in response we as the Northwest Harbor Team had to do the same. We immediately increased our communication cadence internally three-fold to ensure we could manage the changing landscape together. We established goals of protecting our people and flexing to our client’s emergent needs. We prioritized issues, both internally and client-facing, and assigned leads and feedback loops for each. Lastly, we canvased current and former clients to better understand their most-pressing challenges, then adapted our service offerings to best support them.” said Jason Booher CEO of Northwest Harbor Solutions
“I took the position that it was better to be early and extra cautious than late and scrambling for liquidity, or worse. I'm not sure a situation like this offers up much of a choice. To that end, we unfortunately had to furlough some employees and reduce the hours of many others. The most important thing is for the business to be here and for everyone to be gainfully employed as soon as possible. To ensure that, we all have had to make some very difficult decisions. And it's early yet. We expect these next few months COVID will bear it's teeth a bit more. We're updating our modeling weekly and I spend nearly every morning speaking with peers and trying to gather as much data I can to try and forecast what is ultimately still a very uncertain environment “ Commented Matthew Gaffney CEO of Branded Research
“Arranged for 90% of employees to work from home, increased online marketing budget, paused outbound B2B Biz Dev.” Commented Noah Wieder CEO of Searchbug, Inc
“Instructed local dealers to plan for when things open back up, focused efforts towards online education and offering our dealers SBA loan advice.” Said Noah Wieder the CEO of ATMDepot
Here are some takeaways points:
Supporting & Protecting Vulnerable Workers
Insist on work-from-home for those who can, and discourage travel as long as needed. Consider reduced hours over lay-offs. Provide protective gear, protect jobs, and guide assistance for vulnerable workers,
Adapting Your Offer
Negotiating rates/offerings provides continuity for struggling businesses and customers. Because customers fear buying at this time, offer less expensive virtual experiences and/or flexible payment options, all with the goal of retaining current customers and clients.
Strategic diversification of offerings is positive adaptation during change or crisis. Reassure customers by reaching out often and messaging your dedication to keeping their needs front and center. Diversify the manner in which they, too, can communicate by offering live chat and greater ease with e-commerce transactions.
Live chat improves loyalty and ascertains clients’ pain points, it’s convenient and provides a competitive advantage, enables quick resolutions to problems, reduces cost, and expands your reach, ultimately increasing sales. Be certain, though, that the system is user-friendly and provides helpful information.
E-commerce naturally gains importance due to distancing and crowd restraint,.Take advantage of this new norm with prudence and wherewithal.
If you didn’t already create a business continuity plan, it’s time to revisit your supply chain design. You may find you’re too dependent on countries where trade disputes further exacerbate the pipeline, as well as locations where supply is difficult to predict. Worse yet is counting on sources limited to just one location.
Looking at multiple sourcing enables businesses to expand options. But there are trade-offs. You'll incur higher costs, risks working with entities you don’t know, and unknown supply dynamics and disruptions.
Overcome concerns by sourcing locally. The strategy can be optimized for multiple production facilities in each of a company’s major markets, but it spreads your risk because the sources are dispersed. Lower transportation costs can help offset higher product costs. Whatever your sourcing design, develop relationships and hold longtime and new sources close and with value.
Pivot To New Products Related To Market Trends
Careful and broad market research can lead to discovering new opportunities. Consumers need basic survival products, but they’re also looking for experiences, hence the increase in media of late. But there is need, as well. The G.W. Bush Administration’s 2006 National Strategy for Pandemic Influenza plan stressed, “The private sector should be prepared to support Federal, State, local, and tribal efforts to ensure that critical infrastructure is sustained.” This should be part of your entity’s contingency plan..
Flexible Payment Options
Spending is tight for both sellers and consumers. Prospective and current clients might defer on making commitments—a reflection of consumer uncertainties. SBA debt relief, payment extensions, waiving late fees, deferred payment, and CARE plans are possible; remember, virtually every aspect of business and personal life has been affected. Easing the pain is appreciated.
Aggressive Cost Reduction
Short-term reductions targeting perks, hours, benefit and compensation packages, salary (beginning with upper-management), and travel go a long way toward demonstrating concern to employees and clients. Consider cutting/transforming initiatives, discretionary spending, work time (and location) initiatives, and consulting. Plan frequent monitoring and assessment using strategy over cost goals.
The US is experiencing its 3rd severe disruption in a span of twenty years—reason to keep your contingency plans updated and within a moment’s reach. Continuous revisits ensure appropriate revisions and a “best plan of action” to meet disruption.
Hugo Cen - Co-founder Digital Lab a digital marketing agency in San Diego