COVID-19 and the surrounding media storm has changed business drastically in the past month. But it’s not unprecedented: video stores perished when the internet brought streaming, Uber prospered in a world where everyone uses apps. Simon Sinek puts it neatly this week:
There are many cases were something unexpected has put many companies out of business and made other companies come out stronger and reinvent themselves. This is not unprecedented. More sudden? Absolutely. More shocking? Absolutely. But this is not unprecedented in the business world
Many brands will go on to flourish in the new reality which we entered in March 2020.
The new reality
There’s every chance that the world will go into economic recession now. Massive government support, uptick in some sectors, and some forewarning are on your side though.Working with a recession means businesses need to:
Ensure their financial foundations are solid
Constantly monitor for current, mid and long-term changes
Remain flexible to adapting how they do business, and
More so than ever, maintain good communication with clients and staff.
If you have all that in place, credit is cheap and opportunities will appear. Where cuts need to be made, apply the mindset of “cut expenses, not investments”, and remember that people are an investment: you will need them when the economic tide eventually turns.
Branding in the post-Coronavirus world
With so much panic around, there’s a temptation to discount prices to bring in sales. But even in a recession, in most industries you simply don’t need to compete on price (unless your business model disrupts a pricing dinosaur). In fact, cutting prices usually reduces your income and possibly plays into a downward price spiral.
So how will you win? Simple: it’s still niche combined with product combined with brand.
In marketing, a “niche” is a tightly definable, hopefully profitable audience for your product. Technically, niche includes the customers and the product, but I feel product deserves to be understood separately, so when I say “niche”, I mean your target customers.
This year, new niches have emerged, old ones will recede, and some which were previously small are now very big. Mostly this is linked to people spending their work, study and leisure time online and at home, far more than before. I would also expect new niches within the recently unemployed and the newly entrepreneurial pools.
As before, the categories of niche will be endless, from pre-school ballet enthusiasts, to retiree bridge club members.
If your old niche is unlikely to align with your product in the new reality, now is the time to make changes to either your niche or your product.
Need I mention toilet paper? It used to be so boring, now it’s hotly coveted and experiencing a sales boom along with other staples. Who knows how long that will last, but it shows the potential of COVID-19 to shift market attention to different products.
Beyond staples and hand sanitizer, anything which can be home delivered has an obvious advantage while retail showrooms are closed, and perhaps for some time to come. I’ve also noticed B2B brands moving to improve their B2C offering in order to lift profit margins and reduce channel-closure risks.
Professional services are still in need, some even more so as they support businesses and people adjusting to post-corona-reality.
No matter what your product, it’s a good time to review your pricing and value: is every aspect of your product tightly aligned to the needs, desires and economic circumstances of your niche?
Especially in our time of internet-enabled hyper-research and fake news, authenticity and trust are paramount brand attributes. The current situation will only reinforce this: in times of uncertainty, people choose brands they feel they can trust.
New and redefining brands can build trust with relevant, empathetic messaging and presentation. This reflects the product category so shouldn’t always be overbearingly serious or austere. People always want luxuries, so creating an emotional connection between brand and customer will still be an effective strategy in many categories.
Exciting times ahead
Smart business people are now taking on the startup attitude that their business model may need to change in an instant to take advantage of new realities. There are three pillars to thriving at a time like this:
Solidify your financial foundation, cutting expenses but not investments, with an eye on short, mid and long-term pitfalls and opportunities.
Foster clear and open communication within your team and with your customers (hopefully you do this already!)
Review your niche-product-brand position, remaining absolutely flexible and making carefully considered changes quickly.
To end on Simon Sinek again from this week:
It's not for us to say ‘how do we do what we're doing’ but rather ‘how will we do what we're doing in a different world’. And the world is different.