Apart from the massive move to online and convenience shopping, people are realising that their local businesses and services are at risk.
Being faced with challenging times has caused our economy to slow down — people are facing salary reductions and job losses, and though some restrictions have been lifted, businesses cannot operate in the same ways that they used to.
In their recent #CombatCovid survey, Heavy Chef found that if severe lockdown restrictions on businesses were to continue past July, 3 out of 4 SMMEs would not survive.
Household spending in South Africa makes up about 60% of our GDP. For the most part, we are accustomed to being able to spend a little bit of our hard-earned money as we need (or want). Uncertainty and lockdown have created a small break in the cycle of buying and this has forced people to consider what they really need.
For now, this presents a challenge, but people are chomping at the bit — they’re tired of being locked inside and are taking every opportunity they can to get out and spend a little bit of money — even if it’s shopping for groceries or taking a walk to grab a coffee. We can only anticipate what will happen when lockdown ends, but early signs show that people are keen to start the buying cycle again.
Why should you care?
There is going to be a drive towards supporting local business.
Even as lockdown started, there was an understanding that small, local businesses were going to be the hardest hit. If you follow any community pages on social media you may have seen that a few small businesses have opened, albeit in slightly different formats and with altered offerings, and people are doing what they can to support them.
Expect people to want to help those who are under pressure and the small businesses who are seen as a vital part of their community — from the little coffee shop on the corner, to the proudly local manufacturing business.
More awareness around what we really need means people may rethink their consumption habits and shift their spending patterns — this doesn’t mean that spending will grind to a halt, but people will be more likely to spend with businesses that
- Add value to their lives
- They have a connection with and feel they are making a difference in
- Have a human face that they can connect to
- Adjust what they are selling and meet them where they are
This is because we are social animals and our desire to connect has not magically disappeared. Though we may not always be able to do so physically, we can make connections in other ways. As people, we can take a more considered approach when spending and support local businesses that are part of our community.
Coalition Pizza understood this and adjusted their sails to make the best of a less than ideal situation, releasing a brand new range of fast-frozen Neapolitan pizza for retail.
For businesses, this means being more intentional in our communications and actions — we cannot just sell. I mean we need to sell to survive but we need to be sensitive to some nuance:
Think about why people choose you over your competitors. How can you amplify this?
- Is it convenience? Can you deliver instead of needing them to collect?
- Is it based on a relationship? Can you make the experience a little more personal? Something as simple as a thank-you note can go a long way.
- Is it based on your product or service? How can you add that little bit extra, or show them a new way to use it?
Think about the situation your customers are in
- Why do people need your product or service? Is there a way that you could add more value than they expect?
- What are they feeling when they buy from you? How can you make it better? (Even grudge purchases can be made to feel a little bit less unpleasant)
- Are they feeling the effects of a slow economy? If they are, can you adjust your pricing to help them?
Be generous — help before even thinking of a selling
- What could you give away for free that could make a difference to others?
- Could part of your profit be donated to a charity or community organisation?
Where can you make an impact?
If you are global, act local. If you are local, think global.
Larger organisations can lead with a community focus and connect with customers on a deeper level. Organisations don’t exist independently of the communities that surround them, and acknowledging the importance of the relationship with these communities — be it through resources, production, or sales — can go a long way in deepening ties with them. It will enable you to better understand their needs and how to help them, it feeds into your purpose and the impact you make in the world, and it helps customers buy into what you are doing — knowing that the money they spend with you makes a difference beyond just your organisation.
Realising the importance of sanitiser in keeping patients and healthcare workers safe, Sasol, AngloGold Ashanti, and Imperial Group teamed up to increase production of hand sanitiser and ensure it gets delivered to four major hospitals in Gauteng.
Smaller businesses can look at expanding their offerings or market. Small businesses are, for the most part, built on relationships and serving specific groups of people; this means they may find it easier to connect (than their larger counterparts) with their community during these times.
The Bowery, a food business based in Johannesburg, has always believed in food that is organic, free-range, and super delicious. Day-to-day they catered for events and shoots, had an office eatery, and their Good Food Bus — enter lockdown, and none of these were able to operate. In response, The Bowery created Food Box — a recyclable cardboard box filled with great local produce, sourced from local small businesses who have been affected by lockdown. Customers are able to choose from three box options and have their order delivered to their door with meal suggestions emailed to them. By doing so, The Bowery has ensured that they were able to keep operating while supporting other local small businesses, and keeping with their promise to deliver food that is organic, free-range, and super delicious, alebit in a slightly different format.
If adding to your products or services is not on the cards, small businesses can find ways to expand their customer base by:
- Asking for a referral (sounds simple, but it’s very effective). We too often forget that our customers are a specific type of person, and they may know more ‘specific types of people’ with the same pain points
- Moving some of your business online (if you can). This opens up opportunities that aren’t limited by location
Time to sell benefits and not features
Features are easy to find and compare — they don’t leave much room for differentiation and they leave no room for building a relationship. Benefits, on the other hand, are a deeper connection and an answer to a burning problem — they speak to the difference you make in the lives of your customers.
When we work with clients on their Purpose and Impact Models, we include three levels of benefits — a higher benefit or the thought that customers associate with your product, and then a functional and an emotional benefit to support your higher benefit.
Where features are easy to compare, benefits — especially the higher and emotional benefits mentioned above — are less so. Benefits help you build credibility — they are more likely to get you in the door, providing you with a chance to prove that you can deliver the impact that you promise.
In a time when we’re all thinking about what we really need, you need to feel like more of a value-add and less of a purchase, and this is where benefits set you apart.
People need to trust you
We have long been the champions of transparent business practice, and now more than ever, this way of functioning is very important.
In the past, transparency and business haven’t seemed like an ideal combination. When we think of business, we think doing whatever needs to be done to make a sale — but people are expecting more from business than before. They want businesses that are honest, involved in their communities, and know why they exist — they want businesses that are more human.
Part of being human is learning and building relationships. If we treat business the same way, we stop growing just for the sake of growth and are able to do so for the difference we bring to the world.
So, how can your business be a little bit more human, and a little bit more transparent in the way it operates?
Keep people updated
- If they are buying from you — keep them up to date with every step of their order, from manufacture to delivery
- Let them know what your organisation is doing and how it’s impacting their lives
Tell them where their money is going
- Are you involved in any community projects?
- If you’re brave enough, be radically transparent and open up your pricing model like Everlane does
Give them a look inside
- Introduce them to your team, show them who makes your business tick
- Share your knowledge — it doesn’t have to be your most prized IP, but something you know may help someone who’s just starting out or needs some advice
Admit to your mistakes before you are charged with them
- There’s nothing more human than making mistakes — if you mess up, own it
- Tell people where you made a mistake, apologise, and tell them what you are going to do to fix it — you’d be surprised at how forgiving people can be
- If you can’t fix your mistake, offer them a refund or help them find an alternative
We’ve taken a hard look at how we operate and what we, as a business, need and we know that other companies have, too. If companies are changing the way they operate post-lockdown, won’t your customers be doing the same? We may be free to move around again, but that doesn’t mean that we will want to. If this were to happen again, or to continue — are you as connected to your community as you should be? Are you as transparent as you could be? And is your business agile enough to operate, even when things slow down?