When there is a crisis it’s really hard for everybody. Inadequate resources often result in hard times, laying off employees, closing down stores, and a lot of panic. When customers are uncertain, they are reluctant to buy things, and of course, they are ‘trying’ to survive. Every single company is affected (and will be affected) by Coronavirus. But there are two things we can do during a crisis; do nothing (retreat), or do whatever it takes.
We can all agree that we have a choice of how we respond to uncertain times. Anxiety is high, but these choices will make a big impact on whether we continue to thrive or see a decline in business. In this article I decided to lean on my past experience and look at historical research to make a decision about what we as small business owners can do. The short answer is to keep our foot on the gas!
In the past 30 days, I’ve spoken to companies that want to pause all their activities and I’ve spoken to companies that are thinking of how they can overcome this and come back thriving by going all in. Laura Ashley filed for administration yesterday and is blaming Coronavirus for it. Look, we don’t get fat in one day or 30 days, it takes time, we get fat because we have bad daily habits that have been going on for years.
We can learn a lot from the past. We had huge market pullbacks in the ’70s, 80’s, 90’s and 2000’s (approximately every 6-10 years) and the research is crystal clear and conclusive; companies who continued investing in their advertising and marketing during these downtimes fared better during market pullbacks and ultimately gained market share. Companies don’t gain market share when things are good; they gain market share when times are bad and competition is pulling back/or failing.
It’s really important to remember that despite sales getting harder to come by during uncertain times, we still need things – products. Okay, hotels and travel are not a must-buy product today because it’s not mandatory you might think, a lot of hotels are turning their properties into hospitals. A hotel can promote their property and say self-isolate in their hotel by working remotely in the hotel if they have a lot of family members or if they have roommates that are loud. Hotels can focus on other aspects of their business, which we will talk about during another article.
A side note, there is a very deep and interesting study from Cornell University School of Hotel Administration about Winners and Losers during the Great Recession. One of the factors that separated winning hotels and losers in the recession was the hotels’ management of marketing expenses. You can read the research here.
The sales cycle may become a little longer or you will have to pay a little more to acquire a new customer but Google searches are still happening, people visit your website, and people are still researching. Do you think people just sit at home and do nothing? Of course not. Some are planning their next holiday(s), they might be researching a new destination to travel to. They are looking for ideas. Because of so much fear and being self-isolated people will actually ‘go crazy’ once everything goes back to normal. Some are planning holidays, and weekends away.
I was really bad in history classes but I had to do a lot of research these days to learn and see what history can teach us. In 1918-1919 the world had the Spanish Flu, a lot of people are comparing Coronavirus situation with the Spanish Flu, which wreaked havoc on the markets throughout 1918. Once the final wave of Spanish flu subsided the market began a 50% climb which lasted into 1919.
People still need products and services, and the market is still driving demand. Companies that invest in securing this demand, companies that are investing in these times are increasing brand recognition, brand awareness and will emerge the strongest.
Now is the time to adapt and think of a creative strategy to add value to people. You might want to consider your website, you might want to create a separate blog, you might want to become more of a media company, you might want to create an eBook, you might want to start promoting on social ads and google ads your new content and asking people to sign up to your weekly/monthly newsletter. You have a unique opportunity to take advantage of the market pullback and get cheaper website traffic.
You might want to do something great for your community, think of an idea that will help. Maybe now you might want to think of doing something that you can to help. A great example is how Louis Vuitton decided to stop making perfumes and instead make hand sanitizer and give them for free to health authorities.
Another example is how Alexander Hotels turn rooms into an office and promote ‘work from our hotels’ campaign. You can book a room for £69 for the whole day. A great idea as many people live with families and get distracted.
Avvio created a new innovation on their platform to help hoteliers to recoup potential losses from canceled bookings.
Another great example that I always remind myself of is the 10X Rule by Grant Cardone. It’s a book that explains why it’s important to 10X all your actions especially when there is crisis. That’s how billionaire Grant Cardone built his empire when people were telling him to retreat, to pause all activities he pushed harder than ever to get his companies and his name out there. I highly recommend his book, you might not like his tone of voice, but the mentality and the strategy work.
There are plenty of companies that actually grew during the recession, and I’m sure you’ve heard of them. We can learn from them, we can use their mentality, their tricks and use their transformation to emulate how to get your own business through whatever economic hardships come next.
Lego. When families are in crisis and are cutting costs during economic uncertainty you would think they would cut luxuries. While most companies scrambled to survive, Lego saw profit growth of more than 63 percent, reaching an all-time high of profitability. How? There are a few reasons, but most importantly they decided to expand into the global market! Yes, expand, you read it right!
Netflix. Netflix had humble beginnings as a DVD-by-mail service in the mid-2000s. But they didn’t stay there like most of their competitors, right? We know what happened with Blockbusters, they are out of business. Netflix on the other hand adapted. Then the recession hit, many entertainment-related companies struggled but Netflix skyrocketed in subscribers. They attracted three million more subscribers by the end of 2009, and its stock price rose by 57 percent. I believe the lesson here is Adapt.
Amazon. Retail is hit hard, even before the virus of a lot of retailers were struggling to keep their doors open as there was a shift in consumers habits. When the recession hit hard, Amazon stood strong, the company saw an actual rise by nearly 25 percent. Why? Amazon unveiled many new products including the Kindle 2 which helped boost sales during the shopping season.
Dominos Pizza. Dominos wasn’t America’s favorite pizza chain until the recession hit. It was my favorite pizza as it was my first job when I was 13 years old though. In 2009 Domino’s announced that it was changing its signature pizza recipe dramatically and it spent millions on research and a new marketing campaign to raise awareness.
There are plenty of examples that we can look for and learn from them, the key is to look for opportunities – opportunities not to scam somebody or make money off somebody’s pain but to be ethical. As an example, I was speaking with somebody yesterday and he told me that everything is paused due to all events being canceled and it’s a disaster right now. He works in personalized printing business. When we hung up the phone I received the TheHustleCo newsletter and saw the following case study:
How a small business built an 8-figure swag brand in less than 3 years.
Michael Martocci saw a gap in the market; creating high-quality swag for fast-growing companies. Businesses buy swag for all sorts of reasons; to win prospects, serve clients, and engage their employees. He invested $5k to launch and within a year made $168k and currently, their annual revenue is $10million.
The point is that if we look for opportunities, we will find opportunities. So now small businesses really have an advantage and are going all in. Investing in ideas, content, thinking of ways to differentiate themselves, think of ideas of how creatively they can now promote their businesses, their services.
Not everybody is going to go and start doing the right things to expand because not everybody is willing to risk, but by not taking action is risking. So that’s why a small percentage that will take actions, will win and thrive during this time.
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