The global pandemic that is COVID-19 has upended normal business practices and trends. Small businesses, in particular, have been impacted by the rapid change in consumer behaviour.
There’s no easy answer in terms of how to respond to this. But there are some practical steps that all businesses can take to adapt, and possibly even thrive, in a time of crisis and looming recession.
Step 1. Audit your products for consumer perceptions
Start auditing your main product or service offerings, in the context of the new market reality. This will help you to predict how heavily your business will be impacted over the coming months.
In a crisis, all products essentially fall into one of two categories:
- Essential purchases; or
- Discretionary purchases.
It’s important for businesses to take a cold hard look at where they really sit on this axis.
Here are some questions that leadership teams should be asking themselves right now:
- Which of our products are essential purchases during this time of crisis?
- Which products are discretionary?
- Which discretionary products are significant revenue sources (and therefore a risk)?
- Which essential products can be more heavily promoted (an opportunity)?
Those businesses who sell mostly products which are perceived to be “essential” in the current environment, such as grocers and health insurance, for instance, are well-placed. But those businesses with a high exposure to ‘discretionary spending’ such as travel or luxury goods, especially those who sell “big ticket items”, are most at risk.
Step 2: Revise advertising messages or suspend campaigns
If you find that most of your products fall into the discretionary category, then start reviewing all your advertising messages to reflect how people are thinking and feeling.
Remember, there is a lot of fear out there. If your messages are obviously not suited to the current mood, you need to change them – fast.
Ideally, new messaging should:
- Be “on-brand”.
- Reflect current consumer behaviour and anxieties.
- Not be sensationalist.
- Aspire for a “we’re all in this together” tone.
Some old messages may have become inappropriate and could now be perceived as ‘tone-deaf’ Focus on these ads first. They are high-risk for becoming ineffective. At worst, you will offend the very customers you need more than ever right now.
If you can’t fix the messaging then it might be best to suspend your campaigns altogether.
Step 3. Develop new product or service offerings
If your business is heavily exposed to discretionary spending, it’s time for decisive action. You might need to develop entirely new products or services.
Make a list of the following:
- The skills of your team.
- Industry or product knowledge.
- Raw materials.
- Equipment you use to deliver services or product.
- Intellectual property (IP).
- Contacts and networks.
- Financial resources.
Now think about how you can use these to craft a new offering that consumers will regard as essential in this market. To be successful, you will need to harness market insight into the ‘problems’ your customers have right now.
This is a real challenge. Particularly those who have been operating for years in placid, favourable trading conditions. But, in a crisis environment, it can be essential to develop & release new products quickly – simply to keep cash flowing.
For those with some balance sheet capacity, “buy now pay later” offers could work. Anything to mitigate “loss avoidance”.
This is all very challenging. And yes, it will be stressful. But right now decisiveness, and speed, might be the difference.
Darren Moffatt, Director of Digital Marketing Services, Webbuzz
