Who could have seen it coming?
A great majority of the world did not. By several hundred miles. And while running a business is all about managing risks, no business could have foreseen a risk so outrageous and rare.
As one would expect, a global catastrophe sent the global economy through a lot of ups and downs. Owing to government bailouts and having the opportunity to work from home, we might not have witnessed another Great Depression. But millions of jobs were lost; many, in fact, quit them on purpose, reevaluating their goals; supply chains were disrupted, leading to an increase in prices; and US inflation reached a 13-year high (NPR).
Modern markets are tremendously complex and it is tremendously difficult to anticipate what will come next. Economists, in fact, estimate that it will take a few years before the pandemic’s deeper impact on the market becomes apparent.
In other words, the future is uncertain.
But hey, running a business is all about managing risks. Instead of standing by until the dust settles, if you own a business, you can take positive actions, to not eliminate, but certainly reduce risks.
Here are four changes you can make to your business strategy that can help you make the most of the coming uncertainty.
The first thing to do is accept the uncertainty.
Governments imposed nationwide lockdowns which forced businesses to remain open for only a few hours, if at all. Moreover, social distancing rules limited the inflow of customers.
The two phenomena and what more is to come are out of your control, and you can do nothing about them. What is in your control is your response to the setbacks.
Okay, so you can only open shop for a few hours, and even then, customers are limited. What if you could take the shop to them?
Last year, deliveries, of goods or food, shot up to staggering proportions. But to speed up the process, to maximize the efficiency of ordering and delivering, businesses must go online. They must adopt business intelligence.
You can also create value in other ways. How about improving your marketing strategy, finding new methods and channels to make new customer connections, or deepen existing ones?
Or spending time to think outside the box and explore new markets?
Diversification is one of the most fundamental solutions to managing risks. By exploring new opportunities, you avoid putting all your eggs in one basket.
The point is to cultivate an active approach to combating uncertainty, instead of handling it passively.
Go beyond selling products
Let’s understand value-creation in greater detail.
It may seem otherwise, but executed well, the extra investment is certainly worthwhile. In fact, the returns could be more than your investments’ worth when things go back to normal.
One way is to leverage big data and business intelligence solutions.
According to Accenture, 91% of consumers are willing to pay more for products offered to them as personally recommended. Data analytics solutions enable you to collect customer data and make personalized recommendations based on it. The more the data, the more accurate the recommendations, and therefore, the more likely your revenue will increase.
In fact, using data analytics can further increase revenue. You can use the very data to cross-sell or up-sell products. Consumer insights can inform recommendations that complement what is already in the cart.
Another proven way to make customers happy, especially in a time of uncertainty, is to become generous: free, timely deliveries; hefty discounts; free goodies like branded masks.
The third way is to create meaningful content that engages them on a deeper level. When content strikes a deeper chord, you are more likely to be remembered, especially if it is funny, positive, and heartwarming, something to dispel the pandemic’s gloom.
The three undoubtedly come at a cost. But a happy customer is a loyal customer. The cost can very well pay off when the restrictions are finally lifted.
Think outside the box
Every strategic decision has an opportunity cost — the cost of the next-best alternative.
Marketing is not any different.
When you market your products or services on one channel, you forgo marketing them on other channels. Marketers, therefore, have to always be on their toes, monitoring campaign data, identifying target demographics, their channels of choice, and ways to maximize engagement.
But data is not enough; one needs the creativity to connect the dots, no matter how different and far off they seem.
Take National Geographic, for example.
Game downloads, across Google’s and Apple’s Stores, reached record heights last year. More than 13 billion downloads in the first quarter of 2020 were reported by Sensor Tower — 2 billion more than the previous record quarter.
Clearly, people, home-bound, were looking for new ways to get entertained.
National Geographic saw the opportunity and promoted its second season of Mars on games and apps designed for Virtual Reality (VR), like Jurassic VR. The ads were immersive and spellbinding, narrowed to a specific, tech-savvy age group (24-35), and generated more than 240,000 impressions (Media Post).
The television network put data analytics and creativity to good use and saved perhaps thousands of dollars.
That said, another, rather simpler way to cut down on expenditure is to invest in process automation.
Automation “bots”, or software that acts as your virtual assistant, automate manual, repetitive tasks like updating records, saving you time, money, and work dissatisfaction (KPMG).
Like value-creation, the financial returns on process automation are immense, but can only be realized in the long term.
Make backup plans
Managing risks is an exercise in preparation. And given the uncertainty, one must be prepared for everything.
While that is an exaggeration, businesses can certainly develop a business strategy for at least two to three alternative scenarios.
How will you cope with increasing costs, as the world faces a shortage of semiconductor chips? Or as factories remain shut?
How will marketing differ in the two scenarios, if at all?
How are your competitors coping?
The least one can do is stay resilient.
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