The Great Depression. The Wall Street crash in 1929. The September 11th attacks. Katrina. The recession. COVID-19. There are many examples of major global crises that have taken their toll on businesses. Several companies have also thrived because they were prepared to weather the storm and take advantage of the opportunities provided by the crisis.
Should you be concerned about sales during a crisis? Absolutely. But while it’s instinctive to move this process to the backburner when confronted with dwindling customer numbers and business closures, doing so will only slow down the rate of picking up the pace once the economy rebounds.
The COVID-19 pandemic is a good case in point. As reported by The World Bank, one-fourth of companies saw sales drop by 50% between October 2020 and January 2021, with about 25% experiencing declines of up to 72%. In contrast, a third experienced an increase or no change in sales.
Amazon’s first-quarter sales, for instance, exceeded Wall Street’s expectations by 44% to a whopping $108.5 billion, sending its shares up by 5%. If that isn’t a prime example of never letting a good crisis go to waste, then I don’t know what is.
Let’s face it, you’re in business for the money as it sustains its existence. But should you be tempted to milk an ill-fated global-scale event such as the COVID-19 crisis for all it’s worth? In truth, you might get to enjoy the extra cash, but you may also end up with a customer base that’s completely turned off by your business practices. Then again, there are two sides to this coin.
It’s been claimed that Amazon profited hand over fist from the pandemic while many businesses folded. However, based on facts, the company leveraged the increased online shopping popularity, as well as innovation and automation. From a humane standpoint, the tech giant had spent over $4 billion on incremental COVID-19-related costs, regarding employee safety and product delivery.
As part of its proactive efforts to combat price gouging, the company had also implemented fair pricing practices, as well as fought against pandemic-profiteering entities. And if you thought that was all, the founder and other stakeholders had prepared for a potential loss in the second quarter. Given these measures, it’s no surprise that Amazon’s sales figures were off the charts.
The moral of the story here is that in times of economic turmoil, some brands are quick to take advantage of their customers’ needs, while others, like Amazon, focus on providing a valuable solution that meets them halfway. While it’s crucial to fire at all cylinders, going the extra mile can also mean providing long-term, meaningful value — not exploiting the misfortune of others for an increased profit margin.
At this point, you might be wondering how to strike a balance between making sales during a crisis and maintaining customer trust. Here are five simple tips.
“If you don’t take care of your customers, your competitor will” — Bob Hooey
These words are to live by during a crisis as customers want some level of stability and reassurance. As a result, timely and constant communication with consumers, both online and offline, is essential. One way to accomplish this is to be proactive in your response to queries, issues, and feedback.
Update your customers and partners on the happenings in your business, whether that’s hiring new staff, introducing new initiatives, adding new products, revamping your services, or employing more efficient business systems and practices. Even if you can’t meet all their demands on time, let them know that you are there for them.
Share what you are doing to make their lives easier. They will appreciate the fact that you keep them informed and engaged. Although It’s easy to make assumptions about what your customers need during a crisis, the most effective and meaningful response is to find out for yourself — a lesson many companies have learned through experience.
Many now make it a point to engage in crisis preparedness, whether by setting up crisis management teams or by monitoring social media for brand mentions.
During an economic recession, it may be tempting to cut back on marketing, advertising, operations, and other sales-generating processes — a common strategy among businesses. However, a time like this calls for you to be more vocal about your brand value proposition. There is no ruling out the hurdles in selling but bear in mind that some products and services will always be in demand, no matter the situation.
If your company provides any of these, be smart and innovative in identifying new ways to increase sales and fulfil market expectations. During the early 90’s recession, McDonald held back on its advertising and promotion, which prompted competitors like Taco Bell and Pizza Hut to ramp up their campaigns. By doing so, they increased their market share, drove customer traffic, and boosted sales by 40% and 61%, respectively. On the other hand, the “I’m Lovin It” fast food chain saw sales plummet by 28%.
Another idea would be to implement alternative sales models, such as selling your product or service in bulk, on a subscription basis, or even pro-bono. This will get customers hooked on your brand, allowing them to purchase your product or service even when times are ugly. After all, a satisfied customer is a repeat customer.
If there is one thing that business owners can be proud of in the face of uncertainty, it is their long-term vision and unwavering commitment to doing what they do best. The only way they can do that is by keeping up with the times by consistently upgrading and improving their product or service, even when all signs seem to point to the contrary.
If you’re worried about lost sales during a crisis, take comfort in knowing that your current clients may stick with you through it all. It might sound counterintuitive, but it’s true. The most resilient brands during a recession are the ones that have strong customer loyalty, something that cannot be shaken just because times are tough.
With that in mind, your best opportunity is to improve your conversion rate by identifying your best customers — the ones who provide the highest ROI. These customers should have a higher average order size and greater customer lifetime value than others, as well as a higher likelihood of recommending your product or service.
Identify their needs and develop loyalty programs or special promotions to provide a better experience. For example, if you are a car dealer, your top-performing customers will likely be owners of expensive brands or those who are in a high-income bracket. You can offer them freebies, such as free oil changes or car washes, or reward them for referring your service to other people.
A word of caution, though: don’t let your current clients become your only clients. Even in a recession, there will always be new businesses willing to do business with you.
Crises are an excellent time to connect with your community, especially when its members may now have more needs than before. Don’t miss out on the chance to do good and make a positive impact on your stakeholders, especially consumers as not all of them are in the same position. One of the biggest challenges in the case of the pandemic was the lack of cash in hand due to staff layoffs, wage cuts, and the closure of businesses.
You can lend a helping hand by offering flexible payment plans, discounted rates, coupons, and other incentives that will help increase conversion rates and drive sales. For example, if you are in the food and beverage business, consider running a coupon campaign, where all existing customers will be given a small discount, while prospects are given a free offer to try your service.
You might even try something more out-of-the-box. What about extending support to other like-minded companies whose products or services complement yours, or even non-profit organizations. One example of this is Coca-Cola’s partnership with the American Red Cross. The beverage giant donated £12 million to support the latter’s relief efforts for the victims of the September 11 attacks at the World Trade Centre.
Doing any of such will demonstrate your community-focused attitude and foster loyalty and goodwill in the process. And remember to add a “call to action” to your offer — it could be a deadline, a specific giveaway product or service, or an offer to sign up for regular updates from you or your company.
In the fast-changing and unpredictable business environment, it is essential to keep yourself updated on market trends and new opportunities. To keep on top of the game, make it a point to read industry-related blogs regularly, follow industry leaders on social media, and engage in online discussions. Understand your buyers’ behaviour, especially their needs and pain points, and determine if you need to update your offers to better meet them.
Make it a point to study your competitors’ sales strategies and improve on them. The more insight you have into your market, the more informed decisions you can make. Finally, create a comprehensive business continuity plan. Include contingencies for operations during a crisis or economic downturn, as well as possible disruptions in the supply chain.
Now, I know what you’re probably thinking — it can be hard to keep up with the changing market dynamics when you are stuck in a crisis. No, not if you know where to look for the answers. This requires research, which can be accomplished using a variety of online tools and resources. According to the Yahoo News, college papers are increasingly available online for free or at a minimal cost, with their top sites highlighted.
The internet has also become the primary source of business-related information, allowing you to easily find the resources required to maintain corporate development during crises.
Economic recession or not, businesses ought to prepare themselves for crises in advance, regardless of how unlikely they might be. Whether a natural disaster, political instability, or security breach, it’s best to assume the worst and be ready to act accordingly so you do not lose valuable clients. Remember, no amount of business insurance coverage can replace your customers’ trust.
For all its success, Amazon started from humble beginnings — and that too in the age of the internet — as a small bookseller that struggled to survive. However, it grew thanks to its innovative and aggressive approach to sales, marketing, and brand building, which ultimately helped the multi-billion-dollar corporation create its own market space.
It is the same reason why Starbucks had to reinvent itself from being just a coffee shop to owning an iconic lifestyle brand that transcends its physical stores, as attested to by its success in expanding into new markets and sectors. It is why Apple transformed itself from being a niche player to the world’s largest technology company. If their stories teach us anything, it’s the fact that great brands evolve with time or die.
The good news is that the tools you need to survive any kind of crisis are within your grasp. All you need to do is be proactive and put in the effort. If you do that, there’s no doubt that your business will be able to weather any storm.