Coronavirus has slowed down parts of the world economy, causing substantial disruption to businesses. Use this time to explore new, untapped revenue sources.
Making choices in the following focus areas can help you get your footing in this new reality.
1. Prioritise cashflow
Plan what needs to be done to keep the company at least at cashflow neutral and a break-even profit level for the time being.
This may mean cutting expenses or redirecting your efforts if your sales drop more than 10%. Pay special attention to fixed expenses that do not change with lower sales: What can be cut now to save money in those specific areas?
Look at each expense on your profit and loss statement. Ask the question: "As sales go down, will this category of expense also decrease proportionally?" If it does not and it is a more fixed expense, determine whether it is directly related to attracting or retaining customers. If it is not, consider cutting that expense. Also ask the vendors that make up these regular expenses if they can cut their fees (for example, rent, telephone service, legal and accounting, etc).
That said, be careful about cutting too much of your marketing expense immediately, since marketing keeps your sales pipeline full. Instead, ensure all marketing activities are directed at customers that still are good prospects.
Start by creating a spreadsheet of all the marketing initiatives your company is doing. In the second column list who that activity is aimed at (prospect or customer) and in the next column list what stage they're in (presales, service delivery or post-service delivery). For each marketing activity, also note the cost of the initiative and the actual or expected return. Rank them from most valuable to least valuable, and begin cutting marketing expense from the bottom.
2. Find new revenue streams
Disruption to the economy means it’s important to assess the viability of your company – and what changes could help you succeed in the long term. If the COVID-19 continues to have an impact through 2020 and beyond, how will your company react? Think of a world where customers rarely leave their homes and how this affects the products and services that you offer. Reimagine what your market will be like in this new environment and pivot to meet it.
If you are especially hard hit because your company depends on a physical presence, look at your sales and marketing strategies. Can you offer fewer products or services? Could you focus on a separate area that delivers services in a different way? An unexpected event can mean that when a company is forced to rethink their business model, it opens up new revenue streams that are still there when the economy returns to normal. For example:
- a physical therapy practice can add telemedicine services such as video check-ups now and keep that practice vertical later.
- an in-person tutoring programme can add online video sessions with students.
- a dance studio can offer online training.
3. Sustain your customer community
No matter what, stay in touch with your community so they will still think of your company when they're able to engage with you again. During these times, people want to follow leaders and be part of a mission that is larger than themselves.
Find ways, especially during the initial period of disruption, to keep your community together. You can work with your marketing team to reach out to customers to do activities online, even if they don’t produce immediate revenue. For example, since a physical therapy office can no longer see patients in person, they may offer a free daily or weekly check-in on the best ways for patients to stretch or offer a list of exercises to do at home.
The office can promote these free interactions alongside the paid services, such as telemedicine, they still offer. These marketing activities will help ensure your customers come back when the economy improves. It also helps bond customers to each other and your company because you're all going through difficult times together.
Most importantly, don’t hesitate. The actions you take now can determine how your company thrives in this new economy.