The coronavirus pandemic's arrival in 2020 has forced many companies to change course to stay in business. What worked just weeks ago may not be viable today in the age of stay-at-home orders and non-essential business closures.
Although those orders will eventually be lifted, not all businesses can afford to continue covering expenses for weeks or months without any revenue. Many businesses are already shifting course to find new customers, develop new products and services to offer their audience new delivery mechanisms, or new ways to package what they offer.
But how do you know when your business model no longer works?
Signs Change Is Needed
Sometimes change creeps up gradually and, other times, as with the pandemic, it hits hard and fast without warning.
Some signs that your current business model may be obsolete include:
- Lower sales
- Reduced customer traffic
- Declining sales conversion rate
- Lower profits
- Increased employee turnover
- New products and services are selling better than your core offerings.
A slight blip doesn't necessarily spell disaster. Still, if your market is suddenly disrupted due to forces beyond your control, new legislation, or another kind of crisis, you'll want to move quickly to change how you do business.
How to Pivot
To figure out the kind of change needed by your business, first look at what's no longer working. It could be:
- Your product or service
- Your distribution channel
- Your employees
- Your marketing message
The most significant shift during the pandemic has been with distribution channels, as consumers have been told to stay home, and employees have been instructed not to go to work. But no matter what has happened to your market, you may be able to shift gears and retain customers—and even grow your business.
Here's what some companies have already done that may work for you.
Introduce New Products
TOAD Diaries produces personalized and customized planners and organizers for a consumer audience. When the first round of coronavirus-related movement restrictions was initiated, the company saw a "significant dip" in sales, owner Tim Grinsdale says.
Recognizing that customers spending time at home had less use for daily planners, he says, "We immediately pivoted our products—introducing artist notebooks, for example, and promoting gridded and blank notebooks instead of our main product line." In addition, TOAD kicked off a "Things to Do at Home for Kids" email marketing campaign that included two origami tutorials instead of its more generic offers. The result has been sales even higher than last year at this time.
Redesign Your Offerings
When you design and sell clothing targeted to music festival attendees, and no music events or concerts are scheduled for months, what do you do? "We are shifting our marketing from mostly festival clothing to focus now on other uses of our clothing, such as lingerie or loungewear," says Brian Lim, CEO of iHeartRaves. To raise awareness of its new offerings, the company is running "aggressive sales and free shipping promotions," he adds. iHeartRaves still serves the same audience but with fashion options more appropriate for a stay-at-home lifestyle.
Target a New Market
Micrel Semiconductor had been making chips for consumer electronics for years when it encountered price erosion it couldn't keep up with.
Consumer electronics semiconductor prices were falling so quickly, Micrel had to exit the market and refocus its product development and promotional efforts on markets that weren't as price-competitive, co-founder Ray Zinn says. "We looked at other markets we had been serving and decided that, while slower growing, the industrial space was more stable price-wise and offered more predictable growth," he adds.
With higher margins and much less pricing volatility, the industrial market allowed Micrel to be profitable for all but one of its 37 years.
Change Your Delivery Model
Paige Arnof-Fenn, CEO of Mavens & Moguls, says that spring is typically a busy time for her branding and marketing firm. Not this year. Everything from conferences and trade shows to business meetings, and regular networking events has been canceled. But Arnof-Fenn hasn't stopped working.
She's simply switched to virtual meetings. "I have had more Zoom and Skype calls in the past 15 days than in the prior six months," she says. "Pivoting to online meetings, webinars, etc., is a smart and productive way companies can continue to have conversations that educate and inform, build relationships, and move forward during this crisis period."
Package Your Expertise
Graceful Touch massage therapy was a thriving business until the coronavirus hit and clients started staying home. Social distancing is not possible when providing or receiving massage therapy, so owners Guy and Irene Siverson considered how they could continue to help their clients stay healthy from afar.
They settled on an Amazon Kindle launch of "short reports people can use to keep themselves healthy and well at home," Guy Siverson says.
The initiative is already taking off thanks to Quora, Facebook, and Twitter, and the practice's more than 500 newsletter subscribers. "We are making our digital position strong by providing high-quality, low-cost content people in our community and beyond will be able to secure and put to use wherever they are," he says.
When business does ramp up again, the Siversons will then have two income streams instead of just one.
The good news is that it is possible to pivot. The key is to move now to redirect your marketing efforts and lessen the impact of any long-term shutdown.