Let’s start off with the impacts felt thus far.
Put simply, the global economy is taking a hit and the reasons are clear. Several global cities have been placed on lockdown. Tourism is at an all-time low. Apart from daily necessities, consumer spending would certainly have taken a nosedive. This, in turn leads to businesses letting workers go, and with less income, leads to even lesser consumer spending. It’s a downward spiral, an extremely fast one.
Lesser ROI from business activities
Due to the negative short-term outlook, businesses will naturally scale down on business activities. Why? Marketing campaigns will not achieve acceptable ROIs – as consumers spend less. Operational needs are scaled down due to lack of customer activity. All of these leads to an overall drop in business profits, if any at all, bring us to the next point.
Staff productivity is reduced due to lower sales/leads
Many businesses face the problem of staff retention as there is no longer any justification for paying the same headcount the same salary. With lesser sales, comes lesser work to be done, hence lowering the overall productivity. At some point, many businesses will find it financially unfeasible and begin letting staff go.
However, there are good opportunities to be investigated
Time spent on the internet is increased – E-commerce
It’s probably a no-brainer here. People are staying in, shopping malls/streets no longer have human traffic. Thus, shopping fixes are gotten from online shops/marketplaces. If your business has not gotten around to building a fully functioning well-stocked online presence, now is the time to do it. By that, we mean an online shop/marketplace listing which fully reflects your entire product/service range. We’ve seen many outdated online shops, or marketplace listings which are poorly done. Now is the time to update it, and keep it running. An e-commerce presence is not just useful now, but also in the long run.
Digitization of your business
It is the perfect opportunity to discover and stress test methods to digitize your business. Depending on the industry you’re in, look at your current business processes and determine which areas can be done digitally and/or even automated entirely. You can even trial things out with your actual customers, on the basis that it reduces human contact in light of the COVID-19 situation. If it works, your customers will appreciate it. If it doesn’t, return to normal ways (think of how to make it work later) and your customers will still be understanding. Hence, take the chance to digitize your business – turn meetings into web conferences, centralized database system, etc and this will help you in the long term by reducing costs.
So, what can you do during a recession like this?
- Translate your staff productivity to ramp up inbound marketing – your SEO, content marketing, social media engagement. While your staff is not out and about making sales pitches etc, they can put efforts into generating content, engage more in social media. Take advantage of the increased time spent on internet to get your brand out there. It helps both your short and long term growth – without having unutilised staff. It positions your business to take advantage of economic recovery.
- Boost e-commerce presence. Now’s the time to reach out to online marketplaces. Spread your presence – and most of it is free to set up (they do take transaction commissions though).
- If possible, try to secure future revenue. Depending on business model, sell products/services in the future at a discounted price now. It not only eases cash flow, but provides a good kickstart to your business during economic recovery.
- Contribute to your local community, genuinely. These are trying times – as far as possible, use your capacity and influence as a business to help society without expecting anything in return. What we’re trying to say here is, help people, help others, but do not try to ‘sell’ your organisation’s efforts. Most consumers aren’t dumb – they will know if someone is attempting to capitalise on the situation to garner “brand reputation”.