Covid-19 will introduce a host of new business challenges. Among those challenges, companies will have to grapple with the idea that “value” has changed and that customer relationships will change. What’s different now?
- The “value threshold” has changed. In a Covid-19 world, what return on investment (ROI) must a product/solution deliver to yield “acceptable” investment?
Decreased spending causes some of this value threshold shift. With limited budgets, companies simply stop investing in “nice to have” projects and focus instead on “must have” products and services. Smaller margins of error mean companies will place greater scrutiny and importance on making smart investments. Organizations that fail to quantify tangible business value (from their customer’s perspective) will lose deals and market share to those that can. Even then, expect ROI standards to be higher when budgets are tight. To take advantage of this shift, companies must redouble their efforts to define, articulate, and deliver tangible value.
Simultaneously, business model realignments will re-establish the very concept of value. Examining retail experiences helps illustrate this impact. For example, when consumers decide to make food and clothing purchases, they may now rely on delivery instead of the previous brick and mortar experience. Products and services that promise to streamline in-store purchases will lose traction (because in-store delivery is losing favor). Companies facing existential threats may take more risks and be apt to place “do or die” bets in a last ditch effort to transform their companies. They may attempt to leapfrog the market or their closest competitor. Essentially, the definition of value is shifting and products/services once deemed valuable may no longer be so as entire markets vanish.
- Customer relationships will change. How will companies initiate arms-length relationships with prospective customers? And how will they cultivate relationships with existing customers?
Will Covid-19 cause prospects to be more or less willing to respond to an email or voicemail to engage with untested partners? Or will prospects prefer the familiarity and predictability that come with existing relationships? Earning the attention of a new buyer has already become more challenging.
Customers who value face-to-face meetings will become accustomed to interacting virtually. That means any proximity advantages held by an incumbent will diminish. Will virtual Zoom meetings replace lunch meetings? Can teleconferences compete with team meetings around a conference table? Customers will still seek relationships.
WHAT TO DO: To thrive while others stumble, companies will have to create special experiences that are visceral indicators of how valuable customers are. That may mean a different way to sell or it may mean a more nuanced on-boarding process once a customer commits. And because each person is unique, there isn’t a one-size fits all formulaic solution to this challenge. Instead, people will have to align to individual customer preferences and find ways to mass customize experiences.
The pivot point is that a lot is changing. The two seismic shifts above will ripple through the way your company does business. And the only way to succeed in the new world is to truly listen to your customers. Understand how their world will change and you’ll begin to learn how your world must change to help them meet their needs. Good luck!