December 9, 2020
Were you one of the 43% of businesses who had to close at some point during the COVID-19 crisis? Did you stay open but your business is feeling the most serious recession in world history? Even advanced countries are expected to see at least a 7% economy downfall through 2020. The pandemic is seriously impacting businesses of all sizes throughout the world. But some industries, such as eCommerce, are prospering.
It’s simple: they’re online.
Since 57% of Americans are concerned about getting the virus, it makes sense they are more comfortable with online businesses. So if your business is suffering, it is time to consider reinventing your business model, so you can adapt and survive this global crisis.
As the months roll by and this pandemic continues to plague the world, more and more business owners are becoming worried they won’t survive. With no foreseeable end to COVID-19, society will not return to normal anywhere in the near future. We will need a widely dispersed vaccine before we start to see business as normal again. Even if we see a vaccine in 2020, we won’t see the widespread distribution of that vaccine until 2021.
So not only do you need to survive the next six months to a year (or more) but you also need to be ready for the world post-COVID-19.
Because (spoiler alert) it’s not going back to the way it used to be for many businesses.
We are going to enter a new economy. An economy where only organizations operating as a Business 3.0 are going to survive.
What does this mean? You need to be online and ready to adapt with an agile team of high-achieving, entrepreneurial-minded individuals.
So we’ve laid out how you can adapt your business model to survive a global crisis.
What To Consider Before You Reinvent Your Business Model
You need to do something to adapt your business to survive this pandemic. Otherwise, your business may not survive the global pandemic and definitely will not thrive during it.
So you need to do something but to get there, you need the right mindset. If you go into this process with the wrong mindset, you will be hurting your business more than helping it.
Not every business is primed to reinvent in its business model. Before you decide if you need to reinvent your business model to survive this pandemic, consider one question.
Is Your Mindset In The Right Place?
Are you making false promises to yourself? Are you falling into the crowd who tells themselves, I’ll do it when the right time comes? The problem is that the right time never actually comes. As a result, nothing ever gets done.
Successful people understand that if they want to make something happen, they need to take action. They cannot rely on external circumstances to dictate whether or not they’ll become successful. Doing so means giving up control of your life. You are allowing external things to control what you do. If that happens, you’ll never become satisfied because you’re allowing life to push you around.
So you need to have the mindset of a go-getter. You need to be ready to jump in, change things, and adapt as new situations arise. This pandemic is far from over, and we’re still experiencing uncertainty.
If you are content to just wait it out, apt to do nothing, or inflexible when things change, then you don’t have the right mindset to start reinventing your business model. You will struggle to adapt a business during this global pandemic, and you will have a hard time surviving this crisis.
The good news? You can adjust your mindset. If you are aware that your mindset is a problem, then you can approach this process with an open mind and that knowledge. You just need to recognize that this will be a hindrance for you.
How To Reinvent Your Business Model In 4 Steps
Does the idea of reinventing your business model concern you? Do you think it may confuse your customers or hurt your branding?
You don’t need to be concerned with reinventing your business model. It’s a common practice and is especially useful when you’re adapting a business to survive a pandemic.
Take Netflix as an example. Their business boomed amid the 2008 recession because they saw the opportunity the internet promised. So they moved from the failing model of the movie rental business to digital streaming. Customers were looking for affordable entertainment. So they offered a more cost-effective and convenient solution for consumers. Blockbuster stuck to their stagnant business model and fell into bankruptcy.
What about stable economic times? Successful businesses typically reinvent their business model at least four times.
This is because as times change, you need to as well. Technology has made it so the world operates much faster than before. Information, travel, and more are always available.
So you need to start changing as fast as technology does just to keep up. Don’t be Blockbuster. Don’t stay stuck and lose your empire.
The pandemic caused change. But technology is where the most change is happening. So technology should be where you start reinventing your business model.
Here are the 4 steps to reinventing your business to survive a global recession.
Step 1: Know Your Ideal Audience
You have to know your audience right now. Because they are changing as fast as technology.
Now, you might be considering all the money and time you’ve invested in audience research. You know your ideal client inside and out, right? Not quite.
You know your pre-pandemic audience, which is definitely helpful. But you need to take time to get to know your audience post-COVID-19.
Are they in groups more likely to be fearful of the virus or getting others sick? According to an American Psychiatry Association study:
59% of people are fearful of getting a loved one sick
39% of Americans feel that people are overreacting
57% of people are afraid of the impact the virus will have on their finances
68% of people are afraid of the long-term economic consequences
So what does this data mean for your business?
If your audience is made up of people who are fearful of getting sick or getting a loved one sick, they won’t want to leave the house as much. But customers who think everyone is overreacting may ridicule businesses taking protective measures.
But what about the majority of the population? They are concerned with how it will impact their finances and the economy in the long-term. They will be less likely to spend money. So if you’re operating on exclusive or expensive products and services typically marketed to a group of people who are now facing job losses, you need to re-evaluate your offerings. But more on that in a moment.
You now need to think about how your ideal client profile meshes with their post-COVID profile. Once you do that, you’ll have a better idea of how you can reinvent your business to meet your customers’ needs.
Step 2: Evaluate Your Offerings
What offers do you currently have? Are they still meeting your customers’ needs?
Your clients may be fearful of job losses and financial impacts. So you may need to check your pricing.
And you may be surprised by the actual income of your customers.
Statista reported 32.03% of respondents are low-income and buying luxury shoes. 36.19% reported being middle-income and buying luxury shoes.
These individuals may be more prone to saving money in the face of the pandemic. So if they’re your target demographic, it may be time to evaluate what you offer, what your price point is, and who you are marketing to.
You could come up with a lower-ticket offer, but you can also examine your marketing.
Step 3: Examine Your Marketing And Its ROI
Is your marketing reaching the clients you want to reach? Are you in front of people who have money to spend during this pandemic? This will matter when you are reinventing your business model.
Are you seeing a Return on Investment (ROI) in your marketing? If you’re not seeing a decent ROI now, it most likely won’t improve when you reinvent your business in the online world.
As you move your business online, your marketing will change as well. You will be able to reach a larger audience. So traditional marketing tactics (billboards, flyers, local TV and radio ads) won’t be as effective.
Instead, you can transition into Google and social ads. You will increase your reach by moving and advertising online. You won’t be stuck selling to people in your area. Instead, you will have millions of potential customers.
Can You Ethically Use The Pandemic As A Marketing Tool?
As we’ve established, people are concerned, nervous, and anxious. Can you use that in your marketing approach?
The answer is both yes and no.
In all your marketing practices, you should be authentic, honest, and ethical. This means you should avoid fear-mongering. Don’t scare people into buying your product or service. This is a short-term solution that does not build a long-lasting, trusting relationship with your brand. Instead, it creates a short-term customer with no real loyalty or buy-in.
What you should do is acknowledge how your customers are feeling. If they are nervous about going into a store, let them know you’re now online for their safety. If they are uncertain about spending money on a high-ticket offer, offer some kind of guarantee or return policy.
Don’t try to ignore the state of the world in your marketing, but don’t fear-monger your customers into buying your product or service.
Step 4: Take Your Business Online
Finally. The moment has come. You know your audience and where they want to find you. You’ve evaluated your offers to make sure you can best serve them. And you’re ready to transition your marketing to best benefit your reinvented business.
So it’s time to reinvent your business model and take your business online.
You don’t want to join the more than 100,000 small businesses that have permanently shut down since March 2020. Instead, you want to be one of the businesses that recognize 95% of transactions will take place online by 2040.
You want to be on top of your game and move online to survive this pandemic and thrive in the world after.
The pandemic has impacted physical businesses, but eCommerce has flourished. In the last few months alone, Shopify’s stock price doubled to unprecedented heights at $1,000 a share. As a result of everyone staying at home during the pandemic, internet usage has increased by 70%, which meant more and more businesses would turn to Shopify as their platform for creating an online business. They took a risk on reinventing their business model, and it paid off handsomely.
But going online can be a lot larger than selling products online. It can also mean offering a different kind of service to your clients.
Have you considered launching an online community or course for your brand?
You may have an online presence, but you can grow that into a true community. This needs to be part of going online.
Take Sephora, for example. Makeup is by no means an essential product – and they are known for high-quality products that don’t come cheap. But they’ve done an excellent job branding, including with their online community, Beauty Talk.
Your community could be a group on Facebook or LinkedIn. Or simply driving consistent conversations and engagements on your posts on social media. So don’t forget your content in reinventing your business.
And welcome to the online world!
The Digital Age Is The Future of Society
Businesses that utilize technology in their business model have an advantage. They have already been waiting for the online shift. Like most successful people, they understand that patience is key in crises.
Imagine a surfer paddling out into the ocean when the waters are calm. He takes his time, paddling slowly, and puts himself in the perfect position. He waits for an opportunity to present itself.
Compare that to a surfer who is relaxing on the beach. He then realizes the ocean waves are starting to rise. He’s now in a panic. He knows that if he doesn’t act soon, he’s going to miss out on the best waves. So he hurries to grab his surfboard. Then, he swims out to sea in an attempt to make it before the opportunity passes him by.
Between these two surfers, who do you think is in a better position to catch the wave?
Successful people realize what a golden opportunity this pandemic has created. For years, billionaire stock investor Warren Buffett has been saving cash for a unique opportunity just like COVID-19. Successful people are able to predict and expect these events because they’ve been in the game for so long. They understand that the next wave is coming. They’ve placed themselves in the perfect position to ride the best waves.
If you’re thinking of reinventing your business model, you need to plan for the future. Anticipate what will be the next biggest thing, and cater your business towards it. That’s how you create waves.
The surfers that catch the best waves are those who wait for them to come.
(Sources: LinkedIn, Forbes and Bloomberg)