There is no such thing as “business as usual” anymore.
The world has been turned upside down, and companies everywhere are adapting to a new way of life. For many, this ability to adapt is a matter of life or death for their business. Because even if things do return to the way they were before the chaos (however unlikely this may be), it won’t happen for quite some time. Meaning that for businesses to survive the storm, they need a new game plan.
What sort of game plan? One that takes a page right out of the Silicon Valley playbook, adopting a skill that is a perennial favorite among venture-backed startup founders…
Whether you’re a high-growth, well-funded tech startup or the local restaurant on Main Street, understanding how to pivot your business during these uncertain times might be the only thing that can keep your ship afloat.
Not sure where to get started? Let’s look at 5 ways your business can pivot to survive this pandemic.
1. Offer More
For some businesses, survival will require offering more than you ever have before.
Take the fancy Italian restaurant down the street (we’ve all got one). With their dining room closed for the foreseeable future, their go-to solution is likely to offer takeout and delivery, keeping their fingers crossed that things will go back to normal soon.
Sure, by offering takeout and delivery, they can continue to serve delicious food to hungry people. But their average order value is taking a huge hit, as no in-person dining means no alcohol sales, no appetizer and dessert upsells, and of course, no tips for their staff.
So, what can a business like this do to overcome these unexpected challenges? Offer more. To survive an extended hit to their traditional business model, they need to think of ways to offer more to their customers, driving average order values back up to what they were when guests dined in-person.
Perhaps the restaurant could offer a White Glove Date Night Service. Partnering with other local shops, they could put together a special bundle that includes a full takeout meal, a bottle of wine, a white tablecloth, homemade candles from the store down the street, an invite-only romantic Spotify playlist curated by the restaurant’s Hostess, a list of staff favorite romance movies streaming on Netflix, etc.
All of a sudden, this restaurant’s takeout meal turns into an experience. Something to look forward to. Something to keep the romance alive during the quarantine. And something that goes from a $35 takeout bill to a $99 package that local couples will happily pay in order to bring some happiness and excitement into their homes.
All this, just by offering a little bit more.
2. Offer Less
Of course, sometimes less is more.
For some businesses, the best way to survive these troubled times is pare-down their product or service, and focus exclusively on the customer segments that drive the most profit.
Take a typical SaaS company that offers both entry-level and enterprise-level versions of its product. Sure, when times were good, it made sense to staff up and serve both of these segments. But now? Probably not.
A company like this would need to take a long, hard look at which of the two segments drives more to the bottom line, is growing faster, and is most likely to continue growing (or at least maintain) during the impending recession. Based on what they discover, the business will have a game plan as to which segment (and corresponding product features) become the priority, and where they can offer less.
Now, that’s not to say that they need to (or should) fire a bunch of customers from the less valuable segment. It just means that they should reevaluate the time and money invested in areas such as product development, marketing, and customer service related to this segment. This group doesn’t need a whole bunch of extra features right now, nor can you afford to develop them.
Now is the time to focus, and the best way to do that is to offer less.
3. Solve a New Problem
Though it’s easy to forget, the core reason businesses exist is to solve problems for their customers. But what happens when the problem you solve is no longer relevant?
Take Airbnb for example. With people not traveling, their customers no longer have the problem of finding unique, comfortable lodging while away from home. But many of their customers have a new problem: a desperate need for a quiet space to work remotely.
So, what should Airbnb do? Pivot, of course (at least temporarily)!
The company could adjust their platform so that hosts can offer reduced “daytime-only” rates to rent out their home office/bedroom with a desk (one that’s deep cleaned nightly). Customers with a less than ideal work-from-home situation would now have the option to head down the street to an empty, quiet Airbnb listing to work for the day. And hosts would have an opportunity to still bring in some much-needed revenue.
Same business. Same product. Different customer problems solved.
(PSA: I am no doctor or infectious disease expert, and I recognize that this particular idea may go against current social distancing guidelines. I am just using it to illustrate a point about rethinking the problems you solve for your customers!)
4. Redefine Your Market
When there’s an overnight shift in the global economy, it’s not uncommon for businesses to see a shift in their target markets as well. Your core customer base might disappear overnight. But, there may be one waiting in the wings…a market you previous would have never expected to serve.
And for those businesses paying attention and acting swiftly, this spells opportunity…not only to stay afloat during the crisis but to perhaps emerge stronger than ever.
Take Instacart for example. This on-demand delivery service has traditionally focused its efforts on acquiring urban-dwelling Gen Z’ers and Millennials. These groups are early tech adopters and heavy eCommerce shoppers, making them ideal candidates for the service.
But now, with nearly everyone forced to stay home, millions of Baby Boomers across the U.S. are suddenly signing up for Instacart. Do you understand how big of an opportunity this is for the company? Baby Boomers comprise a massive share of the nation’s buying power, however, they have traditionally shunned online retail in favor of shopping in physical locations.
As Baby Boomers are forced to adopt the service en masse, this might be a turning point for the entire generation. And for Instacart, a chance to redefine their market. Hopefully, the company is already strategizing as to how they can retain this valuable customer segment once the pandemic subsides. Because if they can keep the Boomers coming back long term, they will unlock a massive opportunity to grow.
5. Update Your Business Model
For some entrepreneurs, the changes brought on by coronavirus will prompt a necessary change in their business model.
Say, for example, you run an ad-supported newsletter. Think about the long-term outlook of this business model. Media outlets everywhere are already reporting strong declines in ad sales…and it’s likely to get worse as the full effects of the pandemic come into view.
This means that your business model relies on a pool of diminishing customers. Not a great place to be…
So, what can you do? Implement a new model.
If you believe you’re providing valuable content, why not explore a paid newsletter? Sure, you’ll see a drastic drop-off in top line subscription numbers, but the remaining group of subscribers are going to be your most passionate, loyal fans. Plus, there could be unintended positive effects as well, such as the additional time you have to spend on content since you’re free from chasing down ad revenue from sponsors.
While it may be stressful to have it forced upon you, the ultimate good from reevaluating your business model can be a positive outcome from an otherwise terrible situation.
That’s what happened with my non-alcoholic beer and alcohol free wine brand YOURS. With manufacturing troubles brought on by COVID-19, we made the most of the situation, and temporarily transitioned our efforts to building out a blog of non-alcoholic beer, wine and spirit reviews as well as mocktail recipes. Sure, we’d rather have a warehouse full of product to be selling right now, but for the time being we can continue to provide value to our current and future customers through unique, interesting content.
Everybody Has a Plan Until They’re Punched in the Mouth
Mike Tyson once famously quipped that “Everybody has a plan until they get punched in the mouth.” This quote — a derivative of one originally shared by boxing legend Joe Louis — is a violent but truthful take on adaptation and survival.
The world has punched us in the mouth. For some businesses, it may be a knockout punch. But it doesn’t have to be. Remember that you exist to solve problems for your customers. And just because their problems have changed doesn’t mean you can’t still solve them. You just need to think of new, innovative ways to do so.
Pivot. Adapt. Survive. That’s the game plan right now.
And the sooner you figure that out, the sooner you can get up off the mat and start fighting back.