We are still in the early stages of what is going to become a series of cascading crises and we’re not about to get to anything resembling normal life unless major powers in the world can find some way to corporate and manage this crisis together.
The first phase has been the health care challenge and how best we can prevent the disease from escalating. The lockdown has certainly created the biggest disruptions of our times across our life chain.
What we all know is that this pandemic was largely escalated by trade and travel. The real hope globally stands in cooperation between key economies of the world. Since containment strategy is heavily around travel, it would be far more effective if travel advisories and bans are coordinated; countries can come together and share information on how best we can work together to fight the pandemic.
So when time to re-open the economy comes coordinated actions on trade and travel will give us the biggest advantages for the problems to end. The problem we’re facing is global but unfortunately the responses are so narrow that looks like we’re still in the maze for long.
The 2nd phase is the economic disruptions, the magnitude of which we are only trying to comprehend and understand the new way of doing things.
We are really uncertain on what is coming ahead. If you ask an average CEO, they can’t paint a concrete picture of how the future would look like. But it’s really our duty to react as a commercial organisation. Broadly speaking, what we see in the Business world is:
• Significant reduction of mobility affecting supply chain and suppliers are struggling to meet their commercial commitments.
• Reduced ability to service or meet customers especially businesses involved in direct sales outreaches and most customers don’t have time for meetings because they’re in crisis mode. Reduced traffic in major stores but also supermarkets.
• Fear and anxiety
• Rapid changing demand profiles and Market disruptions. We see large shifts in demand in businesses like in HORECAs ( Hotel Restaurants and Cafes)
• Surge in demand of other services- Medical supplies, sanitizers, musks, general drugs, Toilet paper
• Lifestyle changes brought by these issues of social distancing, no hugging, stay at home
• As a Climate Enthusiast I see a sharp reduction in carbon emissions as the main polluters China and USA are not producing to market capacity. The Earth can now breathe.
For Businesses, the first quarter was not very far from the ordinary and we notice that this happened towards the end of quarter one and majority of businesses were concluding projects for the first period of the year.
The second quarter has started but let’s all agree, it will be a disaster for a number of businesses. We expect:
• A Zero- 2% growth that if we don’t slide into recession.
• Loss of Jobs as key sectors are on their knees (Airlines, tourism, oil and Gas, construction and real estates, sports and events, transportation.
In the last two weeks for instance US has lost 10 million jobs exceeding the 8.8 Million total jobs lost in 106 weeks of 2008-2010 economic crisis.
• Business closures particularly SMEs as cash flow issues will set in really soon.
As business leaders and management teams, this period requires a sober mind-set. We are told that in the time of crises, often people classify themselves into two groups: Panic Group which entails negative minded individuals and I am sure you have seen them on social media sharing all sorts of negative information, and Moment Group which entails people who are looking out for opportunities to grab and how to reshape organisations to the better after the crisis. I would love to stay with the latter group that will be crafting a series of actions that will produce positive impact after.
The sober survival- mind-set requires you to understand key critical factor, that is;
• Temporary- It will come to an end, much as God is still angry
• It could be worse
• We also need to learn from it and pick lessons at personal level, Business and country
• We are in it together Europe, US, Asia and Africa
The ability to survive and bounce back from COVID-19 crisis will obviously depend on several factors that must be crafted in your commercial response strategy.
First as a business leader, you need to review the existing internal capabilities. We must take a look at the immediate need to stop the bleeding.
• As a business, cash flow will be critical in this period. You ought to review and take a closer look at your cash pipeline engine, new forms of income, cost reduction measures, floating payments (delay payment), pre-selling for future services, and cancellation of any of your unnecessary expenses. The rationale is stay liquid so you can survive this period.
• As an entity you may have to review how you manage existing contracts. This may also require to sit down with the clients and agree on the roadmap as market changes are happening on both your side but also on client side
• Review your level of business debt if you have one and have a dialogue with your bankers to see if you can benefit from debt restricting regime with financial institutions
• There could be a possibility of resizing the organisation to reflect the new realities. In management it’s believed the best talents you use to recruit a good employee is the same skill and talent you use to fire a bad one. These are times you have to make a tough decisions.
• Scenario Planning efforts for futures- Set up a Commercial Response team to look at key aspects like revenue models, cost cutting frameworks, debt management, sales channels, working capital, diversification in certain areas)
Secondly businesses ought to rethink value and being close to the customer.
There is no better time to being close to customer as now. The main goal here is protect revenues. We must take into consideration that customer preferences are going to change. Adapt to changing customer needs. Ensure you change the offering to reflect new demands.
Technology will be at the forefront of managing business so having a good technological infrastructure like online systems will support your capacity service customers well. These may include; online ordering, on demand services, redesign the service models.
Leveraging on partnership can also help some firms achieve their goals. A person of legal service can ably partner with an auditor or an accountant to provide a buddle service and charge a single fee to a customer.
Restaurants after covid-19 lockdown can choose to provide additional products like frozen foods, vegetable packs and chefs for hire services.
Gyms can start online fitness classes or start on demand video services which they can sell on subscription basis. The whole game plan is to do internal changes to help the revenue curve stay moving positively.
You may also look at shifting your revenue models, for instance;
a) From monthly subscription model to pay per view like DSTV and giving customers to select the channels
b) For a Car rental instead of charging per day, may be you charge per KM
So the questions after covid-19 should be;
• Will I be able to solve people’s problems? How do we make our business more accessible and convenient to customers?
• What opportunities are there to serve customers better?
Thirdly, consider sharpening your brand. The goal of marketer at this time is not make claims but to foster conclusions which should help customers make purchase decisions. Sharpening your brand will also be critical.
At any one time, you have to keep communicationing everyday- reassure all your stakeholders – customers, suppliers, shareholders, regulators, distributors- that you’re still in the game. You can’t afford to sit on the sidelines.
Create helpful campaigns that support health advice. Your customers need to see the human side of brands. You can see how telecoms have pulled out all product related messages and instead focusing on providing health information advice.
Additionally, you need to revisit content marketing strategy. What promises are you going to make and reassurances and new service operations structures? How will you communicate – Channels: Radio, TV deals, social media are communication mediums you can use.
Finally a build-up of your Customer Base Growth.
To be honest you have to keep the revenue pipeline active. The only way to lift and secure revenue is to double key deals in your sales pipeline and existing customers. So the Questions will be:
• How do we increase the win rate and how do we reduce the sales cycle. How do we ensure clients get to the purchase decision a little quicker?
• How we ensure we take away concerns and bottleneck that prevent customers from arriving at the purchase decisions.
• What strategy do you have for customer base growth- Do we have Emailing list, Online Community, active phone line system, welcome campaigns, can your business sell online. Can we do executive selling, or thought leadership, and conduct daily customer touch bases
• Do we have a sales leads generation engine?
• Identifying revenue opportunities within existing customers.
In summary the five key tools to manage business with in the COVID-19 era could be:
• Staying close to Customer and aligning value offering to meet the changing realities.
• Sharpening your brand and communicating well to the market
• Building your customer base growth and to keep the revenue pipeline active
• Overall organisation efficiency with a lean and smart team
Again truth to be told, there will be winners and losers depending on what type of business and how far this problem will stretch.
David Sempala is Chief Executive officer of Royalway Media Ltd