Household incomes are expected to drop in the coming months (if they haven’t already) and many consumers will be turning a sharp focus to their spending — this is going to impact almost every industry and every country. It’s not a nice thought, but yes, you are going to be affected.
Industries that have been hit the hardest, either through lockdown regulations or reduced spending, are restaurants, out-of-home entertainment, travel and transportation, and apparel — both online and offline.
People are scared, the economy is going to suck for a long time and optimism is going to be hard to find.
This scarcity mindset is going to have people believing that there is not enough, and drive them to hold onto what they have.
Why should you care?
As people reduce their spending, companies are going to be forced to reimagine how they operate and how they position themselves. People are and will continue to be in genuine need, and it becomes a question of how to really help them.
How can you truly help them?
You are going to have to connect to people on an emotional level to get them to engage with your product and service — especially if it is not a necessity.
“It’s an unprecedented interruption of an industry that has relied on speeding from one season’s sales to the next. And it is bringing with it a new sense of connectedness, responsibility and empathy.”—Tamsin Blanchard, The Guardian
Help people see a brighter future and go there with them
South African bag and apparel manufacturer, Sealand, has connected with consumers in different ways
- Acknowledging their impact on the environment — upcycling, recycling, or eco-cycling to make their products
- Keeping their community and employees front of mind — sharing their stories and making sure that they are well taken care of
- They create durable products that look good and are built to last (a lifetime warranty backs this up)
Sealand helps consumers see a brighter future for those that are environmentally conscious, community conscious, or those that are just searching for well-designed products.
With the apparel sector being one of hardest hit, Sealand launched the THANKYOU51 campaign, offering people a 51% discount on their gear to help them keep the Sealand dream alive. It worked, and though orders won’t be delivered during advanced stages of lockdown, consumers got behind Sealand and helped ensure that they get to see the other side of lockdown.
Further building their community, consumers that supported Sealand during their time of need will be given premium access to their membership program — providing exclusive access to discounts, collections, and experiences.
Being stuck indoors has caused us to spend more on home entertainment and groceries than we are used to doing (have you made banana bread recently?)
So remember that in times like these, people lean into escapism and experiences.
This is not to say that we’re eschewing the seriousness of the current situation, but when the bad news seems like it has no end and we’re unable to return to normal, we need to find ways to escape — no matter how short or simple. This could be why TikTok has seen such a sharp rise in popularity, adding more than 12 million unique visitors in March — in the US alone.
“In the past few weeks, TikTok has become the most effective black hole for many (and not just teenagers) to disappear into when reality feels overwhelming.”— The Karen meme — TikTok escapism in a time of crisis, Financial Times
Where can you make an impact?
As countries move along the COVID-19 curve, there is an increase inlevels of optimism and spending. South Africa is yet to reach our peak infection rate — what this means for you is that you have time to prepare.
Rethink your pricing structure or delivery models. How can you create value for less?
Can you explore models that your competitors don’t offer?
- Dubai-based holiday home management company, Bnbme, has stopped competing with real estate agents for medium-term rental contracts with homeowners. Instead, they are offering short-term contracts (as short as 3-months), something that previously would have been a no-go
- They have also found a new market, deploying their cleaning and maintenance teams to residential properties
If you are looking to pivot, you need to be prepared to work fast, running small tests and cutting what isn’t working as quickly as possible. In a time where businesses are fighting for survival and frugality is the foremost thought in people’s minds, you do not have the luxury of time to build a perfect product before it gets to market. Launch, test, adjust, repeat — until you have something that sticks.
Re-use, re-use, re-use. Create really high-value content once and repurpose it for many different uses.
It may feel like you don’t have the time to create high-value content that will be forgotten in a few weeks, but one piece of high-value content can be broken down over multiple formats and used across different channels.
One piece of high-value content is also worth 100x more than anything shorter or less valuable — instead of adding to the noise, you’re contributing to the conversation. Over the past few weeks, we have found Finding North (again) — a document with thoughts to help businesses deal with the impact of Coronavirus — helped us start, or brought us into, conversations with like-minded partners and clients. Conversations that we might never have had at this time were started because a single piece of high-value content helped them reframe their thinking.
How can you help people change the way they are seeing or doing things? Could you make something easier, or more fun? Could you make them appreciate a simple thing a little bit more?
In an interview with entrepreneur.com, Angel Investor, PK Gulati shared the story of a local shop owner who broke into a new market through Whatsapp. The shop owner shared a message through a school mom’s WhatsApp group stating that his business didn’t have a website, but his fruit and vegetables were good quality and well-priced, and that he could arrange contactless delivery — they just needed to order via a message on WhatsApp.
By doing so, the shop owner has helped his customers change the way they shop for fruit and vegetables and reduced their risk of infection by delivering orders to their door while managing to keep his business alive.
Build from the value you create
Ask yourself, what space are you occupying in people’s minds? If you’re unsure of the answer they may not have a compelling reason to spend their money with you.
You have to know why your customers choose to spend money with you, and the reason may not be your product alone. For instance, Nike doesn’t just sell shoes — they sell the opportunity for you to beat the voice in your head, the voice that tells you to stay in bed, or the voice that says you can’t do it. Customers don’t buy Nike shoes just because they need shoes, they buy them to become part of an aspirational community that is always striving to be better.
How do you make your customers feel? What do you bring them over and above just a product or service? Why do they choose to spend with you and not a competitor?
Focussing on the value that you provide will bring focus to why your customers choose to spend money with you. It will help you enhance that value, improve your offering, and build new products or services that are better positioned in your market. Doing this now, at a time when people are limited in what they can do will help to build stronger relationships in the long run.
Whether or not you are able to operate right now, you can still put yourself in your customer’s shoes to see how you can help them. Ask yourself how lockdown has affected you and if there is something that could make your life easier or different? Now, is there a way that you or your company could help provide that, and could it be done for free or for a nominal fee? This doesn’t have to be a product or service, it could be insight or perspective into your particular market or business, or a free call or assessment to help them improve their processes.
Humans lean into reciprocity by nature, and investing time and thought now to provide people with help when they need it most will ensure that they come back to you when the economy starts ticking again. Worst case scenario — you’re the good guy for trying to help, and it’s a point toward your company’s reputation.
It can be difficult to see opportunities when we’re too close or too attached to our businesses or projects and it may make acting on the advice above seem difficult. Here are a few questions to help you:
- What are you struggling with right now? (Other people are likely struggling with the same thing)
- What can you do to help? How can you help make their lives easier, or different?
- What’s the most valuable piece of content that you could create right now — for your industry or for your customers?
- Why do customers choose you over your competitors?
- What difference, beyond your product or service, do you make in the lives of your customers?
- How can you adjust your pricing to make it easier for your customers?
- Is there a part of your business that you could make free during this time?
Still need help? Book a 1-hour, free call with us. No strings attached.