The India Journal of Mercuri International Apr - Jun 2020
Sales Recovery & Resurgence
Lessons of Hope from the 1918 pandemic. How did humanity conquer it then?
buy.ology for a Coronavirus World. Recommended by Marketing Guru Philip Kotler.
Covid Took Away Your Sales Pipeline? Here’s how you can rebuild It
Lessons of Hope from a 100 years ago
Game for a trick question?
Give yourself a straight A if you can spot something new in this sampling of headlines:
Retailers report 40 to 70 percent decline in business. Grocery business down by a third
Surge in demand for beds, mattresses and bedsprings
Industries hobbled by lack of workers
Train services suffer
Nothing? Found it sleep-inducing? You were right. There’s nothing new at all in these headlines. They are all from newspapers of over 100 years ago.
Same story from a different world – 100 years ago
A blog on business.com cites these early 20th century headlines and gleans some fascinating lessons from a report on "Economic Effects of the 1918 Influenza Pandemic: Implications for a Modern-day Pandemic” authored by Thomas A. Garrett, of the Federal Reserve Bank of St. Louis
The world was a very different place in 1918. There was a world war on and countries were far less prepared to handle pandemics. Yet, like it is today, infection and mortality rates across locations was a hotly debated point then also. Preventive measures also weren’t very different. Locations that were able to shut down places of large gatherings like schools, movie halls and places of worship before the outbreak spread extensively, fared much better in arresting infection’s surge and in saving lives.
Other interesting similarities
There were other interesting similarities too. “Businesses that specialized in healthcare or health-related products saw significant increases in revenue” says the blog. That’s no surprise. Aren’t businesses making facemasks and hand sanitizers witnessing a boom now? Similarly, service oriented and entertainment focused businesses, like restaurants and theatres, suffered the biggest losses during and immediately post the pandemic. “Densely populated urban areas were hit the hardest by influenza, in terms of mortality rates and widespread business shutdowns” notes the blog. With Covid19 also, cities with large populations have seen the sharpest spikes in infection spread and mortality.
Lessons of hope from the 1918 pandemic
Yet the 1918 pandemic left many lessons of hope
- Hardest hit states showed the highest income recovery post pandemic - States hit hardest by influenza also saw the most significant individual income growth when the pandemic passed.
- Cities bore the brunt but rebounded faster - Even as cities bore the brunt of the pandemic, they enjoyed better health care and hence rebounded faster economically.
- The 3 best strategies to beat the crisis and thrive seem to have remain unchanged in 100 plus years
- (i) Get better at what you’re doing | (ii) Pivot what you do | (iii) Pivot how you do whatever you’re doing
Current examples abound to validate these 3 strategies:
Get better at what you’re doing
- Healthcare has retained its accessibility by opening up telemedicine options. Health aggregator platforms have made it possible to video-consult any specialist of your choice
- Food and beverage chains have resorted to contactless delivery and restaurants have reconfigured seating arrangements and food service
Pivot what you do
- Many manufacturing units were seen moving into making hand sanitizers and personal protective equipment. Smaller units with 3D printing facilities and a small work force better positioned to pivot
- Some hospitality majors converted their properties to accommodate Covid care or quarantine facilities
Pivot how you do whatever you’re doing
- Large scale switch to virtual conferencing in place of face to face business meetings and selling activities
- Widespread adoption of online classes and programs in the education and training space
There is hope in the story of 1918. If humanity could conquer one pandemic and leap forward, a better equipped world can certainly do it all over again after 100 years. You can read the business.com blog on “What economics lessons can we learn from the 1918 pandemic, and what are successful businesses doing to survive the 2020 pandemic?” here
Covid Took Away Your Sales Pipeline? Here’s How You Can Rebuild It
World is not new to crises …
But Covid19 is a different beast say Prof Rohit Deshpande, Ofer Mintz, and Imran S. Currim of Harvard Business School. Why is that so? Writing for HBS Working Knowledge, they argue that unlike “recent economic crises and recessions such as the Great Recession of 2008 and the Mideast oil crisis, whose causes were financially driven, the fundamental driver of the pandemic is health and safety concerns and hence Customer driven”
The De-accession phenomenon
This has had a dramatic effect on buyer behaviour, whether B2C or B2B. Government-imposed lockdowns, self-isolation, fear, closure of work places, offices and stores have temporarily shut off Customer access to products and services. Prof Deshpande and his colleagues call this “de-accession”, a phenomenon where potential supply and demand are intact but Customer isn’t able to buy. This drives Customers to operate on tighter budgets and become less willing and able to spend on purchases
How do you find Customers? And engage with them?
There are constraints you can’t change as they are external to business. All you can do is to adapt. So, in this ‘new abnormal’, how do you find Customers? How will you engage with them?
Understand Customer’s new Covid induced problems
The first step in cracking de-accession challenge is to research and understand Customers’ new problems caused by fear, isolation, physical distancing, and financial constraints, and then structure your offerings to meet these new unmet wants and needs.
To adapt to Customer’s changed needs, take a hard look at where your firm is right now
Deshpande and his colleagues point out that the speed with which businesses have to adapt to the new “directional reality” of changed Customer needs would depend on where your firm is right now. This would differ from industry to industry.
For example, industries experiencing decreasing Customer demand, like “offline entertainment, hospitality, real estate, industrial commodities, and suppliers to these industries” need to adapt rapidly to improve their chances of staying afloat.
Industries with increasing Customer demand such as “grocery stores, online entertainment, teleconference providers, and their suppliers” can adjust to the new directional reality at a slower pace. But they would also have to come to terms with the altered Customer needs to be able to grow in the long term.
How to craft a minimally viable strategy to find Customers and engage with them
Regardless of whether demand is growing or decreasing all businesses should ask themselves – “What should be my minimally viable strategy to get through these unprecedented times?”
The HBS faculty answers this question with a modified version of the famous Ansoff 2X2 matrix as below:
A Strategic Action Plan for your Firm
Drawing on this matrix, Deshpande and team suggest the following strategic actions to find your Customers and engage with them:
First off, you should determine to which quadrant of the modified Ansoff matrix your business belongs to and choose from there, the action-options viable for that quadrant. Sales is all about looking for Customers in the right places. So this 4 quadrant matrix could jump start that search:
- For First Quadrant firms – Increasing Demand for product or No Change in Demand (Sticking to Existing Products and Services):
- You experience increasing demand or no change in demand. So, you might be biased towards sticking to status quo or pre-COVID situation.
- However, times have changed, and business as usual cannot continue.
- You must seek out Customers instead of waiting for Customers to come.
- You need to go beyond status quo in the new abnormal
- For Second Quadrant firms – Demand for core product is showing signs of flagging (Moving to New or Modified Products and Services):
- You realise that the first quadrant, or status-quo, is dying or dead, the new normal is the second quadrant.
- You can think of adding new services or tiers of products or creating altogether new offerings
- These new offerings or layers of offerings should address Customers’ “deaccession” needs that are unmet.
For instance, many small businesses like restaurants and home goods retailers try to match increased demand by allowing customers to order through email, website ecommerce, mobile apps, or simple phone calls. This takes care of the unmet need for physical safety and avoidance of exposure to infection
- For Third Quadrant firms – Demand for product sold has dried up (Searching for New Markets for existing Products and Services):
- You feel the need to expand into new Customer markets with your existing products or services to generate fresh demand
- If your firm is in this quadrant, your demand has dropped big time and you must find new markets to grow.
- Examples include airlines resorting to increasing cargo runs to make up for loss of passenger traffic or facility management companies offering fumigation and disinfection services for businesses, resuming activity
- For Fourth Quadrant firms – Product demand and market, both have declined (Diversifying of both Products and Markets):
- Your firm is driven to diversify simultaneously into both new markets and new products and services.
- This is because Customer demand for your core products and services has decreased
- There is now a need to find new customers for new products and services in areas where demand is buoyant
- Classic examples are fashion accessory companies getting into making surgical masks, personal protection gear, and other medical-related devices and cosmetic makers creating scented sanitizers
- Customer Centric Principles to make your chosen strategy work
Prof Deshpande and colleagues suggest 5 Customer-centric principles that can be used to make your chosen search and retention strategy work:
- Expand your digital footprint. “Companies need to adjust to the new reality that customers prefer not to come into their stores” say Prof Deshpande and colleagues. For example, B2C firms must give their Customers delivery and pickup options. B2B businesses too can find ways to make it more convenient for Customers to buy from them
- Reward your loyal Customers: You could design special offerings to reward and retain your existing key accounts and encourage them to repurchase from you. Customized solutions can be created for all key accounts taking into account their post Covid challenges and opportunities
- Connect emotionally – Say Deshpande and his team: “Firms that connect emotionally with their external and internal customers and emotionally and physically with employees are expected to perform better than firms who just connect with their customers physically” What can your firm offer to its Customers that can resonate with their need address their safety and health concerns? A major steel company famously put in place an elaborate ‘pods’ system and touchless entry options to make its employees and stakeholders feel safe
- Recognize financial constraints: Most businesses are facing financial hardships of a scale not seen in living memory due to forced shut downs, rising costs on the back of supply chain disruptions and dwindling sales and collections. Structuring flexible payment terms that recognise crisis-imposed financial constraints till normalcy returns is a sure way to retain Customer loyalty and win a larger wallet share in the longer term
- Turn threats into opportunities: Proactively reaching out to existing and potential Customers instead of waiting for them to turn up and exciting them about your products/services, digital and delivery options, health safeguards, and payment plans can turn the Covid threats into opportunities.
The Harvard Business School Working Knowledge article on Your Customers Have Changed. Here’s How to Engage Them Again by Prof Rohit Deshpande, Ofer Mintz, and Imran S. Currim can be read here
buy.ology for a Coronavirus World
Introducing the book Buy.ology for a Coronavirus World, brand builder and buyer behaviour expert Martin Lindstrom says – “As the world opens up again, your business will face a dramatically new reality. It’s going to require you to ask: Which elements in your business model need to fundamentally change? If you answer, “Nothing at all, we’ll get right back to business and nothing will have changed,” then I suggest that you didn’t get COVID-19’s message
To drive home his point, he shares the story of Andre Lacroix, the CEO of Intertek, who asked his team: “How are our customers going to change post-COVID-19, and how can we help them?” Just three weeks later they introduced ProTek, a brand-new company that trains staff in cleanliness, certifies buildings, airline cabins, and hotel rooms, and verifies it with a special seal for guests, passengers, and the world to see.
The book deals with a question that’s central to all sales activity. “What do our Customers really need?” Here are some valuable nuggets from the book:
- Today, it’s a new world for consumers, businesses, and brands – “All around the globe, we’re waiting for a green light to flashback on, signaling that we can all escape from our isolation, breathe the fresh air, hug someone we love … and return to buying the same stuff we used to, without having to run a constant radar alarm in fear of bumping into some sneezing person who has no intention of backing out of your safe zone. But most experts agree: That green light won’t be switched on anytime soon”
- Look at the Covid impacted world through the Customer’s lenses - Putting on our commercial glasses, we see that the gap between being in-balance and out-of-balance represents an opportunity for a new product, brand, or service. It may be that one is overweight (and Weight Watchers is the answer), or feels lonely (try match.com?), or experiences insecurity (meet Tony Robbins). In each of these cases, there is a gap that a product or service can fill. So, the critical question a sales professional may need to ask is: “What kind of imbalance is Covid19 creating around the products and services that I sell?” In the answer to that question are contained the seeds of growth opportunity.
- Understand the impact of Negative Somatic Markers driving the push towards Digital – “A Somatic Marker is a psychological process that controls your decision making, an emotional bookmark so powerful that you’ll never forget it. It’s a short cut to survival, it by passes logical considerations. Like when someone bumps into a tiger in a jungle. “A thoughtful evaluation of whether to pet the tiger is not an optimal survival strategy. The Somatic Marker says: Run!” When it comes to malls, stores, shopping, and entertainment, the coronavirus can be counted on to escalate the replacement of conventional bricks-&-mortar models with digital. Ditto for Customer meetings and presentations during the entire sales process
- Keep the human connect in mind. Always – Lindstrom cites the story of Maersk and how reestablishing the human connect helped them energize their workforce. Writes Lindstrom - “During their disastrous cyberattack in 2018, one of my clients, Maersk … learned the importance of visibility. For the first time in living memory, top management began walking through the offices twice a day. No longer invisible behind their computer monitors, they became human and …. infused as sense of entrepreneurship into the organization”. Positing this to Customers we sell to, it’s important to keep the human connect alive and warm even if interactions become virtual
- To thrive: Be there for your Customers and Fall in love with Change – Recognise the silver lining in the pandemic as it compels us to change, improve, and innovate, to find more creative ways to approach our Customers. “In times of need, you can really make a difference — and your customers will notice. In difficult times, you can cement a lifelong relationship. You can build your brand”. List out innovative ways you can be of help to your Customer in these extraordinarily challenging times
Marketing Guru Philip Kotler has this to say about Lindstrom’s book: “Just read Martin Lindstrom's new short book Buy.ology for a Coronavirus world. He shows how customer behavior is likely to change in the post-Covid world. Full of fascinating details and experiences. Will make you think about your own behavior now and after Covid” Endorsements don’t get better than this
The Wrath of Mother Earth
- Scorches HER children
- Red eyes no longer gentle
- Stony faced, she watches
- Unmoved by helpless anguish and wails of sorrow
- We have begun to learn our lessons
- Yet again
- Our Treasure, a gift given in good faith
- Grain to feed the body and Nature to nourish the soul
- And if only we expressed gratitude
- With a generous spirit that shouted
- We are one and there is enough and more for all
- We broke the rules
- And here we are..
- Slowly a ray of pure light beckons
- Goodness twinkles and we walk towards her with weary steps
- The shoulders are lighter and the heart stronger
- A new resolve shines within
- Mother Earth begins to open her arms…
- "The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” – Socrates
- “Challenge and adversity are meant to help you know who you are. Storms hit your weakness, but unlock your true strength.” – Roy T Bennett
- "Never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before." Rahm Emanuel
- “Sales success comes after you stretch yourself past your limits on a daily basis.” – Omar Periu
- “Having to sell almost entirely in a “virtual mode” introduces new dramatic dynamics. Many of us will have to find creative new ways to connect and demonstrate our value” – Mark Schaefer
- “I found myself guilty of status quo bias several times in the early stages of the pandemic. The status quo bias involves considering the current state of affairs to be optimal and anything different as a loss. I found myself saying, “We planned this event, so we should have it.” …. The way to push past this bias is to ask, “Would I plan this same event/flight/meeting today, given today’s situation?” In most cases, you’ll realize that adjusting to the new reality — canceling or modifying your plans — is both the right thing to do and not that hard” - Thomas H. Davenport , Professor of Information Technology and Management at Babson College
- “The coronavirus will eventually abate and few will remember the many false predictions made during a crisis—but you will still have to live with your business decisions” - Frank V. Cespedes Senior Lecturer, Harvard Business School
- How we tell ourselves the story of what’s happening matters. …. We need to tell ourselves a story that avoids panic and builds resilience. Sailors accept the fact that the sea is not flat – Seth Godin
10 Rules you can use to make your business and sales Anti-fragile
If you are a balloon, would you hug a cactus? You can, if you are anti-fragile. And that’s what your business and sales need to be too
Farnam Street blog, (fs.blog), quotes author Nassim Taleb to define anti-fragile this way:
“Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty.
Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile.
Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.
This property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, good recipes … the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance … even our own existence as a species on this planet”
You can adopt these 10 Rules to make your busines and sales anti-fragile (adapted from fs.blog):
- Stick to simple rules
- Build in redundancy and layers (no single point of failure)
- Resist the urge to suppress randomness (or things you can’t control)
- Make sure all stakeholders have their skin in the game
- Experiment and tinker — take lots of small risks
- Avoid risks that, if lost, would wipe you out completely
- Don’t get consumed by data
- Keep your options open
- Focus more on avoiding things that don’t work than trying to find out what does work
- Respect the old — look for habits and rules that have been around for a long time and helped you succeed
Read more about An Anti-fragile way of life here
Mercuri Mail is a thoughtful compilation of meaningful articles drawn from Mercuri India archives, and from timeless management literature. Edited by Jaishankar Balasubramaniam & Sridhar Srinivasan of Mercuri Goldmann (India) Pvt. Ltd. This publication is for private circulation only.
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