The coronavirus has created one of the most shocking and challenging business crises any of us have ever faced. Whole sections of the economy are closed. Most, if not all, discretionary spending has been curtailed. And massive volumes of workers have been laid off or furloughed.
With all this carnage it’s hard to see a silver lining, but there is one. You’ve just got to change your lens and get creative. Here are three opportunities to find new revenue and growth during the coronavirus crisis.
Look Ahead and Constantly Reframe Your Efforts
Alex Cibiri, founder of Element Fitness, pivoted on a dime at the start of the crisis, and the results have been nothing short of remarkable:
- 92% member retention rate
- 9.8 Net Promoter Score (out of 10) for member satisfaction
Element is one of Canada’s largest crossfit gyms. As you can imagine, owning a gym during the coronavirus quarantine is not ideal. By its very nature, Element is a place you go to get sweaty.
While the rest of the fitness market has cratered, Element is operating at almost full revenue and delivering exceptional customer experiences.
Alex shifted into action even before the lockdowns had been fully implemented. Alex said, “We don’t know when it will end, but we have to keep operating.”
Alex and the Element team reframed their business strategy with two strategic observations:
- How do we recreate the class experience virtually?
- We’re not in the equipment rental business. We are in the coaching business.
Alex explains, “Most gyms operate on a rental model. You buy a membership and that gives you access to their equipment. At Element, we are in the coaching business. We deliver classes, instruction, and community. The equipment is just a tool, not the value proposition.”
This view freed the team to innovate quickly. They delivered classes virtually, assigned each member a “HomeCoach,” loaned equipment to active members, and created nightly community events like dance classes, wine tasting, and game nights.
The result has been a loyal membership, but more importantly a platform to grow and sell new memberships to other people stuck at home and looking for better quality fitness experiences.
Exploit Competitors’ Weaknesses
One of the fastest ways to capture revenue during the lockdown is to identify where your competitors are falling down. Supply chain disruptions, offshore manufacturing, and product shortages can all be opportunities for you to get some quick wins.
In China, we have seen a variety of fast moving companies take advantage of stock-outs and supply chain disruptions. Master Kong, for instance, anticipated consumer hoarding at big box retailers at the start of the crisis.
Master Kong is one of China’s leading instant noodle and beverage producers. According to an article in HBR, “[Master Kong] tilted its focus away from offline, large retail channels to O2O (online-to-offline), e-commerce, and smaller stores.… As a result, its supply chain had recovered by more than 50% just a few weeks after the outbreak, and it was able to supply 60% of the stores that were reopened during this period — three times as many as some competitors.”
In every sector, I am seeing fast moving companies exploit competitor weaknesses. For instance, manufacturers in hard hit regions like Italy or Spain, or companies that outsource manufacturing to China, may not be able to service the North American market right now.
As inventories dwindle, customers will look elsewhere to find alternative products. This may be just the opportunity you need to get some short term cash and long term market share. If you can position your products as ready alternatives to the competitors’ products, your brand can be perceived as extremely helpful and present at a critical time.
Look for Regulatory, Industry and Customer Shifts to Emerge
As the crisis continues new needs are emerging.
The 2002 – 2003 SARS pandemic in China was a huge factor for the rise of e-commerce giants like Alibaba. Duncan Clark, author of Alibaba: The House That Jack Ma Built, writes, “[SARS] came to represent the turning point when the Internet emerged as a truly mass medium in China…. Crucially for Alibaba, SARS convinced millions of people, afraid to go outside, to try shopping online instead.”
We’re seeing a similar situation today through the United States, Canada and Europe. While millions are social distancing and staying home, e-commerce has become a critical channel for almost every sector — from groceries to industrial supplies.
But it’s bigger than e-commerce. Expect to see regulatory and industry changes in response to Covid-19.
Construction workers, for instance, are walking off job sites because the porta-potties are unhygienic. Even before coronavirus, portable toilets were pretty gross. After coronavirus, porta-potties can be potentially deadly. The CDC has reported that Covid-19 is present in human waste, and can be transmitted on surfaces.
Before coronavirus, these porta-potties were cleaned every few days. After coronavirus, construction workers are demanding the facilities be cleaned multiple times per day. This is creating an industry shift, which is rippling up the entire supply chain — from service providers to manufacturers. But it’ll also become a legislated topic soon too.
These shifts are the emergence of potentially lucrative new industries and markets. Take a close look at what’s happening in your industry, and try to foresee the needs that could become huge opportunities for your business by the end of the crisis.
The Innovators Win During a Crisis
While the coronavirus is crippling the economy, the innovators will be the leading brands at the end of this crisis. The steps you take today will shape what your brand may become.
In all of this uncertainty, look for opportunities. There may be more customer needs than you initially see.
The world is shifting rapidly all around us, and this can be your time to spot an early trend or customer need that positions your brand for massive growth as the economy recovers.
We’re Here. Let’s Talk!
Do you need a strategy to overcome the coronavirus? Let’s talk. Call me directly at 416.479.4403, or check out our Crisis Marketing services. Sticky Branding works with business owners and their teams to rapidly shift their business strategies, value propositions, and marketing strategies to develop new customers and sources of revenue.
