One thing is true is that this economic slowdown is being driven more by health policy than pure weakness of the economy. The natural marketplace did not initiate this slowdown, but we intentially (or not) created this by telling people not to go to work, to stay home and mandated the closing of certain “non-essential” businesses. This was endorsed by all parties to “slow the curve” of viral infection and death of our citizens. It seems to be working, but…
The impact on businesses has been dramatic, especially small business. Now that we are slowly returning to open stores amid this “new normal”, with spacing, masks and pent up demand, how should your small business respond?
Realizing that consumer spending will most likely be soft for the coming months, your expenditures must be reviewed to reduce “non-essential” spending. Fixed expenses have no option but “nice to have” should be postponed until revenues recover.
However, with reduced customer spending it is truly a battle for market share. You will need a greater share of a smaller pie to maintain your sales volume. So the last thing you should do is completely stop marketing spending. You SHOULD be smarter and more strategic with your dollars, but please do not stop spending. Cutting your marketing is committing suicide in a down market.
Now, you must be smart with your marketing bucks, for sure. Start by understanding where your business stands in the context of this new marketplace.
Let’s look at some of the changes that have affected us short term and should continue to remain as we progress (crisis speeds disruption).
- Cash Flow is challenged. While the business has slowed, non-variable costs have continued. Money is tight!
- Consumers are cautious – spending is up on home staples, most other spending is ended or slowed. People are being very subjective with their spending.
- Online spending is booming. The Stay Home, Stay Safe campaign drove online volume up, and moved some light e-com users to loyalists.
- Remote work is a real thing. As companies moved to work-at-home, many realized that productivity has not suffered. Will commercial real estate be impacted as companies move to more remote work? Most likely, yes.
- Entrepreneurship through e-commerce will grow. As employees are displaced, software such as Shopify allows start up of an e-com easily. However, many will fail due to lack of a strong strategic platform and lack of proper branding in this more competitive landscape.
Now let’s project some vital things you must do to win in this changed environment
- Understand your customer – their motivations, desires and challenges regarding your category. The better you satisfy their needs (ease the pain) the more you impact their loyalty and reinforce your brand.
- Love your customer! Creation of customer loyalty is vital in a slowing/competitive marketplace. We’ve spoken about the necessity of improving your customer experience. Review your model from sales to fulfillment to find out ways to create a WOW factor that outshines any competitor. Remember that it does not have to be an expensive feature. It’s emotion that creates a brand evangelist. Create memorable experiences and love your customer – even if it hurts sometimes.
- Upgrade your digital channel. Do you have a direct to customer web capability? While it used to be a secondary focus it is vital now. Especially for manufacturing/distribution industries. You directly control the entire experience and reap the lost margins lost to middlemen.
- Open your eyes, and ears. Change can be difficult but those who refuse to evolve go extinct. It’s the law of nature and the law of commerce. THINK DIFFERENT was a slogan for Apple years ago, it is very appropriate for today’s world. Embrace change.
Be Smart – A few of my favorite sayings are appropriate here
- Use SMART Goals – Write out you vision of where you are and where you want to be
- Start with Strategy – your plan to success with why me, why me now?
- Then define creative tactics that ALIGN and REINFORCE the strategic direction. Don’t get caught up with a “cool idea” that sounds great but doesn’t help you along the path to your goals. This creates wasted cash flow.
- Use your support team. Every business should have a smart CPA to save on taxes and a proven advisor to run your ideas by. An advisory board, formal or informal, sole person or team, will help you refine your plans and help refine your limited funds. Find someone who has already made the mistakes once so you don’t have to.
- Be brave. There is already a winnowing out of weaker brands who did not/are not evolving. Standing put is simply not sustainable.
Now a plug. We are here with our years of experience, strategic training and yes, scars from some miscues and are ready to help…if you are ready. It’s time to take this challenge on and be a brand champion. I wish you well.