The world has been turned upside down. The ability to adapt is a matter of life or death for many businesses, because even when we are past the chaos, things won’t likely be the same again. For most businesses to survive the storm, they need a new game plan.
Survival depends on adaption. As Mike Tyson famously quipped, “Everybody has a plan until they get punched in the mouth.” The sooner we figure that out, the sooner we can get up off the mat and start fighting back.
The world has punched us in the mouth. For some businesses, it may be a knockout punch. But it doesn’t have to be. Take a page out of the Silicon Valley playbook… The pivot.
Remember that you exist to solve problems for your customers. And just because their problems have changed doesn’t mean you can’t still solve them. You just need to think of new, innovative ways to do so.
Read on for 5 things you can do right now to pivot your business and survive this pandemic.
1. Offer More
For some businesses, survival will require offering more than you ever have before.
Take the fancy restaurant down the street (we’ve all got one). With their dining room closed for the foreseeable future, their go-to solution is likely to offer takeout and delivery, keeping their fingers crossed that things will go back to normal soon. Sure, by offering takeout and delivery, they can continue to serve delicious food to hungry people, but their average order value is taking a huge hit. No in-person dining means no alcohol sales, no appetizer and dessert up-sells, and of course, no tips for their staff.
So, what can a business like this do to overcome these unexpected challenges? Offer more. To survive an extended hit to their traditional business model, they need to think of ways to offer more to their customers, driving average order values back up to what they were when guests dined in-person.
The restaurant could offer a White Glove Date Night Service. Partnering with other local shops, they could put together a special bundle that includes a full takeout meal, a bottle of wine, a white tablecloth, homemade candles, an invite-only romantic Spotify playlist curated by the restaurant’s Hostess, a list of staff favorite romance movies streaming on Netflix, etc.
Now this restaurant’s takeout meal has turned into an experience. Something to look forward to. Something to keep the romance alive during the quarantine. And something that goes from a $35 takeout bill to a $99 package that local couples will happily pay in order to bring some happiness and excitement into their homes.
All this, just by offering a little bit more.
2. Offer Less
Of course, sometimes less is more.
For some businesses, the best way to survive these troubled times is pare-down their product or service, and focus exclusively on the customer segments that drive the most profit.
Take a typical SaaS company that offers both entry-level and enterprise-level versions of its product. Sure, when times were good, it made sense to staff up and serve both of these segments. But now? Probably not.
A company like this would need to take a long, hard look at which of the two segments drives more to the bottom line, and is most likely to continue growing (or at least maintain) during the impending recession. Based on what they discover, the business will have a game plan as to which segment (and corresponding product features) become the priority, and where they can offer less.
Now, that’s not to say that they need to (or should) fire a bunch of customers from the less valuable segment. It just means that they should reevaluate the time and money invested in areas such as product development, marketing, and customer service related to this segment. This group doesn’t need a whole bunch of extra features right now, nor can you afford to develop them. Now is the time to focus, and the best way to do that is to offer less.
3. Solve a New Problem
Though it’s easy to forget, the core reason businesses exist is to solve problems for their customers. But what happens when the problem you solve is no longer relevant?
Take Airbnb for example. With people not traveling, their customers no longer have the problem of finding unique, comfortable lodging while away from home. But many of their customers have a new problem: a desperate need for a quiet space to work remotely.
So, what should Airbnb do? Pivot, of course (at least temporarily)!
The company could adjust their platform so that hosts can offer reduced “daytime-only” rates to rent out their home office/bedroom with a desk (one that’s deep cleaned nightly). Customers with a less than ideal work-from-home situation would now have the option to head down the street to an empty, quiet Airbnb listing to work for the day. And hosts would have an opportunity to still bring in some much-needed revenue.
Same business. Same product. Different customer problems solved. Not necessarily quarantine approved.
4. Redefine Your Market
When there’s an overnight shift in the global economy, it’s not uncommon for businesses to see a shift in their target markets as well. Your core customer base might disappear overnight. But, there may be one waiting in the wings…a market you previous would have never expected to serve.
And for those businesses paying attention and acting swiftly, this spells opportunity…not only to stay afloat during the crisis but to perhaps emerge stronger than ever.
For example, take Instacart. This on-demand delivery service has traditionally focused its efforts on acquiring urban-dwelling Gen Z’ers and Millennials. These groups are early tech adopters and heavy eCommerce shoppers, making them ideal candidates for the service. But with nearly everyone forced to stay home, millions of Baby Boomers across the U.S. are suddenly signing up for Instacart. What a huge opportunity for the company! Baby Boomers comprise a massive share of the nation’s buying power but have traditionally shunned online retail in favor of shopping in physical locations. As Baby Boomers are forced to adopt the service en masse, this might be a turning point for the entire generation. And for Instacart, a chance to redefine their market. Hopefully, the company is already strategizing as to how they can retain this valuable customer segment once the pandemic subsides. Because if they can keep the Boomers coming back long term, they will unlock a massive opportunity to grow.
5. Update Your Business Model
For some entrepreneurs, the changes brought on by coronavirus will prompt a necessary change in their business model. Are you doing large corporate events? Think about the long-term outlook of the previous business model. Not a great place to be… Customers may no longer be willing to put the same amount of time and dollars when things go back to “normal” but they may be open to smaller events with an extended online experience that integrates opportunities for serendipitous connections.
So, what can you do? Don’t hanker down and wait for this to pass. Test a new model. Today!
Explore ways you can help customers create meaningful connections that go beyond video meetings on Zoom. What you learn may pay off in passionate, loyal customers that stay with you into well into the future.
While it may be stressful to have change forced upon you, the ultimate expansion can be a positive outcome from an otherwise terrible situation.