Turning an Eye Towards Your Future Business
Over the past six months, many business leaders, including myself, have been consumed with the day-to-day activities of running our businesses. Some thrived, others needed a life-vest tossed to them. Most were reactive as opposed to being proactive and found themselves following the same path many businesses did in previous recessions or economic downturns.
Today, I encourage you to think about what a post-pandemic strategy looks like for your business, and focus on the idea of getting your business back to the business of making money.
I love this quote by C.S. Lewis, "You can't go back and change the beginning, but you can start where you are and change the ending."
We really can't look back, and I highly suggest to those that try to stop!
Yes, we can use history to help make decisions for the future, but we can't go back and change the past. As John Bon Jovi said in one of his songs, "In my rearview mirror, my life is gettin clearer." That’s true in business as well as life. In my article, Lessons Learned, I address what history has taught us about business strategies from the previous three recessions so we can move forward.
However, what I want to address in this article is forward-facing opportunities for your business and marketing strategies.
I think you all know that hope is not a strategy. And marketing is not just tactics. Focus on the strategies that differentiate you from your competition and provide value to your customers.
One of the consequences of this pandemic is that it took away a clear path forward for many businesses. It was and still is, an event that none of us have ever experienced.
Yet, months into it, we had a glimmer of hope and thought we were coming out of it. But now we're back in it, with not a lot of progress to show for our sacrifices. And today, there's still much confusion as to the best way forward.
Many business leaders are waiting for clarity to move forward confidently. However, history has shown that there is a high cost with waiting: to your marketing, to your business, to your employees, to your customers, and to you personally. My goal is to try to help you focus and provide insights to help you begin to move forward.
When the pandemic took hold, what did businesses do? They cut their marketing budgets, putting more money at the bottom line. Not saying this is a bad strategy, just not the right one. This reactionary approach has happened throughout my career. It’s what I call an “expense mindset” versus an “investment mindset.” We can't or shouldn't look at marketing as an expense; we have to look at it as an investment.
Cutting costs faster did not cause companies to flourish (1). Those that found a balance and planned for tomorrow not only did well during the recession but ended up in a much stronger position. Research shows a higher probability that businesses that used this approach came out of recession, leading their competitors.
How do we move forward?
One piece of advice I've been giving to clients and the wider world is that we need to adjust our approach to strategies. The three-year and five-year plans are wonderful, but there's so much uncertainty about what's going on that I now recommend using a 90-day rolling strategy. This way, you have an opportunity to look, measure, adjust regularly, and not get too far ahead of your skis thinking about where you want to be in three years when you’re already anxious about where you’re going to be in 90-days or six months.
The other part of this post-pandemic strategy, I believe, is to implement "what-if scenarios." What if the pandemic doesn't go away for a while? Or comes back with a vengeance and we shut down entirely again? What if your market is drying up and the businesses you're selling to are also struggling? Where are you going to find other opportunities? We do a lot of this in crisis planning, and indeed, this is a crisis, but you can use this thinking as a way to judge opportunities and plan your ability to pivot if necessary.
Keep in mind that this isn't just you sitting in the conference room or your office thinking by yourself. This requires bringing in your strategic team and role-playing various "what if" scenarios.
One of the areas to brainstorm is to determine your growth strategies. The following chart provides a simple approach to looking at your existing markets and existing products, as well as analyzing new market opportunities. Depending on your approach, you need to evaluate the risk—the risk of doing it and the risk of not doing it.
To reinforce this, here is a recent study by Gartner (2) among CMO's in the enterprise world. You can see the responses are placed into the four buckets I just addressed.
From a strategic standpoint, these CMOs, close to 79% of them, are focusing on their existing markets and potentially introducing new products to customers they already have relationships with.
In your case, you may already know who they are and where they are.
Selling to your existing markets seems to be a more viable strategy in the short-term.
Why? Because if you're investing in new markets and new products, you now have to invest significantly more to understand the market dynamics, build awareness of your brand, and potentially new distribution channels. This not only adds costs but time to your potential recovery.
The other point I've been making in my presentations and client conversations is to encourage businesses during these times to be careful that they don't damage their brand in the short-term. You've invested a lot of money into your brand, but due to current circumstances, you can find yourselves taking actions you wouldn't normally do for short-term gains that can have long-term effects on the brand.
As an example: you're a luxury brand, and in order to generate immediate revenue, you begin selling a commodity product to a completely different audience. This could potentially cause confusion amongst your loyal customers and damage to your brand long-term.
Where should you focus?
The following chart is from a recent McKinsey (3) research study. Why am I showing this? Because it illustrates the concept I've just discussed.
You need to understand the impact the pandemic has had on your market. Is it growing or shrinking? For example, you can see in the top bucket that those industries are growing. In the middle, some are growing, and some are shrinking, and then certainly, those at the bottom are having issues. To me, this gets at the heart of market dynamics, understanding the market that you're playing in right now before you dive deeper. If your markets are shrinking or having trouble, then you need to look at alternatives. Can you take a product and service you're selling and move it into one of these markets without much difficultly, cost, and risk? Think of the growth strategy chart presented earlier and keep in mind this is a more challenging strategy.
How do you do that?
Talk to your customers. Over the years, how many times have you invested in understanding who your customers are–their needs, wants, and motivations? Perhaps you skipped that step because of time or cost?
You need to truly understand your customers and what's going on with them. Why? Because now you need to message to them. What might have been relevant six months ago may not be relevant anymore. If you're still marketing the same way and putting out the same types of pre-pandemic messages, your message may no longer be relevant, and you're opening the door for your competitors to walk through.
There is a fundamental shift going on right now from traditional to digital. We all know this was happening, but the pandemic has accelerated this digital transformation.
Presented in this chart by McKinsey (4), if you compare to 2016 to 2019, the amount of research that is being done online by your customers and prospects has increased by 85%.
Research to find out about a product, service, or company is being conducted by the buyer before they ever pick up the phone call to call your business.
What's interesting is that it's now moving into the evaluation stage. There is a 239% increase among people self-directing their efforts online to evaluate your products and services. There is a digital transformation going on, and you need to be a player. This isn't about running an ad on Facebook or posting on social media. It has nothing to do with that; this is about being there when your customers are looking for you. To make sure that you're there in front of them as they move through the buying journey.
Another result of COVID and digital transformation is that the sales and marketing funnel has fundamentally changed.
You can see, traditionally, that marketing would drive awareness, get some interest going on, maybe drive a little consideration, and then pass the lead off to sales. Now, more of the sales process is staying with marketing.
This change has been felt by many that cut their marketing budgets. Depending on where your prospects are in their journey, you're potentially damaging yourself because when your prospect is online looking for you, you're not delivering the kind of information that they're looking for.
Here is an excellent quote by the Microsoft CEO, "We've seen two years' worth of digital transformation in two months. There's such a dynamic change. The quarter is the new year, and the fastest will win."
When I think about the word “fastest” – how quickly can I get my website up, or how quickly can I make a social post, develop and implement an email campaign or how quickly can I create a video–it's not how quickly you can get those done, but spending the time to making sure that you are faster to market and doing it quicker than your competition, and above all, doing it right.
There are many unique opportunities because of this digital change, and so I ask this question of you: are you a disrupter, or can you be disrupted?
Those are important aspects to understanding the products and services that you sell. You don't want to be that organization or in that industry that can easily be disrupted. You want to focus on how you can be that disrupter.
The last area I want to mention regarding turning an eye toward the future is turning an eye toward your competition. You need to understand what's going on with your competition. So many times businesses conduct their annual reviews and include a competitive analysis, but then don't spend any significant time on their competition again for another year. You must assume that your competitors are not waiting a year to understand what's going on with your business. They're looking at your messaging, at changes in your website, at your press releases, speaking to the people you just laid off, problems with vendors about the status of your business, and more.
Your competitive intelligence analysis needs to be ongoing. This allows you the opportunity to set up programs that are both competitively defensive and offensive.
Don't look at one area of your business. Look at it holistically. Is your organization resilient? Are you implementing some of the things discussed here, or are you still waiting for a sign to figure out which path to take?
Make history, and don't just be a part of it.
Don't be one of those companies that will show up in future research regarding what not to do in a recession (or future pandemic).
Take control of your destiny and lead, not follow others, and strategically look toward the future.
About the Author
Angelo has over 25+ years of experience in marketing and branding and currently works with startups, small and middle-market companies as their fractional Chief Marketing Officer. He focuses on defining market opportunities, developing competitive strategies, audience personas, brand realignment, and strategies, to strategic, integrated marketing plans that help businesses compete in an ever-changing marketplace.
He has worked with various companies, including startups, regional, national, global, multi-national organizations with products from semiconductors and finance to apparel to food/beverage to ice cream. His approach defines three strategic pillars for success: Insights, Brand, and Plan to develop effective and efficient programs for building enduring brands and sustainable business growth.
1. March 2010 article in Harvard Business Review, "Roaring out of Recession
2. Published by MarketingCharts, August 2020, Data Source Gartner
3. Corporate Performance Analytics by McKinsey & Company
4. OSI Results of McKinsey’s 2nd biannual B2B customer buying research: US & Europe 2016 and 2018/2019