“If it feels hard right now, it’s because it is.” This is perhaps the most accurate quote of 2020.
If we go back in time to just 12 months ago, if anyone had of told you New Zealand would close its borders, GDP in the United States would drop by more than 30% and more than 1.5 million kiwis would be claiming a wage subsidy from the New Zealand Government, you would of said they are crazy, right?
But, here we are, our country currently at Alert Level 2 after a second round of Alert Level 3 lockdown for Auckland and a pandemic death toll that continues to rise around the globe.
So again, if it feels hard right now, it’s because it is for most of us business owners. And we do expect the balance of 2020 to be a ‘grind’, where we do our utmost to get through to the end of the year in the best shape possible.
A perspective I encourage you take however, is to view 2020 as a year of learning. Some lessons might be brand new, while others we are dusting off after conveniently forgetting about them during NZ’s economic boom. Regardless, our broad advice for kiwi companies remains the same; 2020 is about ‘surviving’ and positioning your business to thrive when the economy rebounds, which it is guaranteed to do at some stage. The challenging thing for all of us is not knowing when.
Of course, it’s not just business owners navigating their way through our ‘new normal’, our customers are too and, alongside all the stress this pandemic and its associated restrictions have brought, we also have a fresh opportunity to engage or re-engage target customers by leveraging unprecedented levels of common ground…we’re all in this together right?!
And forget about trendy buzz words like “pivot” and “agile” – these are for businesses that stopped listening to their customers and didn’t respond to changing market dynamics. The most important lesson out of this crisis is to understand your customers; What to do they want? What will they pay? How do they want to interact?
So, why not take some time to walk in your customers’ shoes. They could lead you to great places…
Where will your customers’ shoes take you?
First thing is first, if you’re going to spend the time getting to grips with your target customers’ new needs and wants by taking a walk in their shoes, you need to take your own off first. What does that mean?
It means finding out what it’s like to call your business for support.
It means walking into your store and browsing your shelves/purchasing a product and thinking about how the experience makes you feel.
It means browsing your website for information about your services.
Experience your company from the outside, and then get busy on the inside.
I’m a little happy and a little sad…
Over the past few months I’ve had a significant amount of contact with kiwi businesses, some thriving in these conditions and others doing it tough. After countless conversations, Skype sessions and face-to-face coffees (none of which are taken for granted these days!), I’ve observed some common themes which leave me with mixed emotions.
I’m thrilled to see the majority of businesses using the learnings of the past few months to get back to focussing on what matters most; their customers. There’s been a clear surge in efforts to find new, more convenient routes to customers and investment in necessary marketing tools to get brands and products front and centre of people’s minds.
There has equally been a deepening in the general understanding of the importance of cash flow and, more importantly, what drives profitable cash flow. Sadly, we saw many businesses caught out here during Alert Level 4 lockdown, but the silver lining is many others ensuring they don’t fall prey to the same issue moving forward.
There are some great examples of businesses responding to the changing markets and customer behaviours. One of these is a business that has both a physical store and online shop. By leveraging a solid understanding of the market, how lockdowns have changed consumer behaviour and what drives profitability, this business owner has increased profit over the last 90 days by more than 22%. Does your website traffic look like this and is it converting into sales?
Firstly, I am sad to acknowledge that some business have had their markets so severely disrupted there is little they can do right now; this is really tough and hard to accept. But in some other industries, such as tourism, there is a lot of missed opportunity by businesses relying on ‘gut’ feel, rather than data-driven insights. In today’s digital world, this is honestly unacceptable, no matter how seasoned you are.
Then there are those businesses who do try to get insightful support, but sadly still experience ‘the invisible loss’ by dealing with so called ‘Google experts’, who I prefer to call ‘one trick ponies’, where the level of expertise is sadly highly varied. If you are going to get digital support, do your research first.
Capturing and stimulating demand
The two things we all need to keep in mind is that marketing is about ‘capturing demand’ and ‘stimulating demand’ and must generate profitable cashflow – otherwise don’t do it!
Below is a real-life example.
This chart shows what the share a kiwi business was getting from ‘capturing demand’ marketing strategies – the good news is around 85% of the demand was not yet being captured by the business (not that their marketing agency had ever showed them this). After doing the math to make sure the strategy’s promised growth could be captured profitably, this business grew revenue by 12% over the past 90 days compared to the same time last year and increased profit by 22%. There is growth for the taking if you get close enough to your customers!
So, in summary, be prepared for the balance of 2020 to be a bit of a grind, but use the time to keep getting closer to your customers, especially your potential customers. And ask yourself some hard questions too. Do you know your market share? Is your marketing generating profitable cashflow? Is your marketing strategy about ‘demand capture’, ‘demand creation’ or a combo of both?
The businesses already asking themselves these questions are surviving the best and are best positioned to thrive in 2021 and beyond. So, sharpen your focus and go take walk in your customer’s shoes.
A friendly reminder
Your business may be eligible for 100% subsided marketing strategy support and we would love to help. Learn more.