Consumer confidence is waning, with 78% of Americans living paycheck to paycheck before the health crisis began, confidence was already pretty low. Unfortunately, fundamental problems facing the labor force have gotten worse: The pandemic has caused 30 million Americans to file for unemployment in March and April. And a 2019 survey by Capital One found that 68% of small business owners feel unprepared for a recession.
Businesses must diversify revenue streams, reduce risk, get financing, and retain existing customers—many of whom will have different expectations in a new-normal world.
Find And Keep Customers
Legendary football coach Lou Holtz says, “Show people you care.” Because that’s when people give their best effort. We have overwhelmed citizens: 30% of apartment tenants did not pay rent in April, and among homeowners, 23% made partial payment or did not pay their mortgage. You may want to consider offering discounts, as well as let customers join a rewards program that allows them save on repeat and bulk purchases. That’s good for cash flow, anyway. Your margins may get squeezed but so are everyone else’s.
“If you focus on the client and their goals, then the money will follow. There is no better marketing than a completely satisfied customer,” says Joseph Nazarian, a managing attorney at Accident Lawyers Firm in Newport Beach, California. “If a customer feels like you are treating them like a paycheck, then they won’t recommend you to anyone. At my firm, we make it clear that the client’s health and well-being are most important.
“If your company is only focused on maximizing profit, then your business will suffer because the client will feel ignored,” says Nazarian. “You risk losing clients to competitors after fighting so hard to get their business. In a COVID-19 economy, it’s your job to adapt or be left behind.”
For establishments that have a digital footprint, conversions are crucial for growing revenue. Without conversions, a business owner would be wasting precious marketing dollars.
Local businesses need to optimize advertisements on social platforms like Facebook and Instagram to boost traffic and conversions, says Allie Bloyd, an award-winning marketing expert from Louisville, Kentucky. “Local entrepreneurs need to test these in the following order: the offer; audience; creative and copy; and destination. Tweak these and follow up.”
According to Bloyd, fixing an ad means to capture an audience’s attention and to make it compelling enough for readers to click. “Why are you sending them to the place you’re sending them? Figure out how you’ll optimize when you generate traffic.”
Adapt To The New Normal
Business owners should diversify revenue streams and de-risk their organization. Would it make sense to offer aftermarket services or new products? Diversifying also means reaching out to new prospects abroad. The key is to avoid putting all eggs in one basket during precarious times.
An April survey by Gartner found that 41% of employees will partially work from home after the pandemic ends. And 74% of CFOs plan to permanently shift some employees to remote work. This tectonic shift is creating opportunities for companies that make online conferences, events and parties possible, like Fiesta. The video app lets fitness trainers, musicians and speakers engage with customers through a digital platform where users see and hear each other. Celebrants can also throw epic parties in an increasingly common trend where high school proms, college commencements, and even marriage celebrations are broadcast on the web.
Virtual services are growing rapidly in a world where audiences must follow social distancing protocols and minimize travel.
Clients Realize The Value Of Money
In this economy, clients will appreciate your concern for their well-being: It shows that you put people ahead of spreadsheets. Today’s patrons will also be grateful for exceptional service. Thus, encourage employees to go the extra mile and you’ll distinguish yourself from competitors. Many of whom are too focused on financials.
In the case of Access Jet Group, the high-end private aviation company grew its business by offering outstanding charter flight services to companies and high-net-worth individuals. According to the founder, the Florida-based company was founded on a phone and email, and nothing else. So he’s experienced in leading teams to provide the highest level of client service at every point of a traveller’s private-jet journey.
“We have maintained a steadfast approach to providing a seamless travel solution to current private flyers and a new wave of first-time users,” says CEO and founder Adam Hasiak. “We have taken the proper actions to safeguard the company by providing partner aircraft that has been thoroughly sanitized according to government protocols, but also in the form of specific health declarations requested of every passenger traveling via private charter.”
Some entrepreneurs delegate sales to employees and prefer to run operations behind the scenes. However, in this recession it’s best for an owner to help the sales team and extend a welcoming hand to buyers. “A good salesperson believes in him or herself to effectively engage consumers,” says Bobbi Awad, an expert beauty consultant and former sales leader at fashion giant Chanel. “People are too dependent on phone screens for engagement when a simple smile and old-school handshake can win over customers. Get out of the office, and meet and greet with shoppers. Show a pleasant personality, and truly help people find the solutions they’re seeking. Doing so will increase your sales pipeline through a positive impression, referrals and word-of-mouth.”
Flexibility Is A Strategic Advantage
When lockdowns are lifted, employees will find themselves in an emptier office, because many friends and colleagues will have received pink slips. Those who are lucky to have a job will need to carry a heavier load. Employees should do everything in their power to maximize productivity and ensure their company stays competitive. That means using flex work like telecommuting and videoconferencing; eliminating wasteful costs; and helping the organization drive value in an uncertain market.
Moreover, business owners should have emergency financing in place. Talk to your banker and look at stimulus loans and alternative lenders. “Alternative lending was created during recessionary times as a substitute for bank lending,” says Oz Konar, founder of Business Lending Blueprint, a training firm for business loan brokers. “During an economic downturn, banks reject more loan applications at a time when businesses are facing financial hardship. Therefore, alternative lending is recession-proof because many companies urgently need debt capital during this period.”
During the 1930s, infrastructure, basic supplies and government services began to see strong demand as the nation’s leaders shifted resources toward those sectors. Financial institutions like JPMorgan seized the chance to cheaply buy bankrupt banks (i.e., competitors), and hence consolidated an industry they now dominate.
Flexibility is the ultimate tool in an unpredictable world. As this generation will realize, the end of a matter is what matters most.