Crisis 2.0. How do business
remain afloat and scales
The crisis is gaining momentum, and it is more and more difficult to stay afloat for business because revenues are decreasing. With the beginning of the quarantine, the new rule of “quick or dead” for business appeared. This means that it is crucial to change quickly to stay afloat.
Many companies are already not sure whether they will be able to survive during the coronavirus pandemic and economic crisis.
Experts note that the business sector is already faced with a drop in economic activity, disruption of supplies, and the cancellation of meetings and trips. It is already abundantly clear that the global economic recovery will take time.
The difficult economic situation requires deliberate action and to stay afloat you need to:
- You need to realistically assess your financial situation.
- It is important to control all financial flows.
- You need to have a plan of action in case of emergencies and to provide, where possible the reduction of expenditures without hurting business.
- You need to assess possible problems with external financing.
- You have to anticipate what your customers may change consumption habits.
- You need to be prepared for the reduction in sales.
- By reducing the sales volumes, it is possible to identify that the lifetime value of a customer has decreased, which in turn indicates the need to contain costs to attract customers, to maintain a constant return on marketing costs.
- You need to adapt your marketing budgets to the situation and requirements increase the profitability of marketing expenditures.
- You need to understand how serious is the issue of staff reductions.
- You need to evaluate whether it is possible to work more productive with fewer staff.
As strange as it may sound, but the crisis in the situation of quarantine has advantages – dramatically increased online sales and, accordingly, the demand for online shopping. For example, Amazon has announced plans to hire 100 000 new employees of the warehouse and delivery as the company expands staff to keep up with the demand for online shopping since consumers are forced to stay home because of quarantine; eBay emphasize the importance of the online trade when regular shops are closed, and the company has introduced additional intensified measures of monitoring of speculation on the prices of goods such as antibacterial gel, face masks, toilet paper, and baby food; the management of the Sephora store decided to close stores and transfer office staff to work from home. Thus, online shopping and mobile app work. The company also changed the policy for the return. For users who want to return an item from an online store, the available return time has increased from 30 days to 60.
In times of crisis, marketing is the basis for survival, and quarantine, in turn, is a perfect time to strengthen your competencies in marketing, Internet marketing, and sales management. It is important to understand that during a crisis, inefficient companies simply will not stay afloat. But at the same time, the crisis creates great opportunities for strengthening the business and very large capitals are formed during crises.