Five ways to ensure business growth, not just recovery, post COVID-19
I’m going to focus on digital products/services in this article, increasing the contribution of digital products/services only makes more sense for any business in a COVID-19 and post COVID-19 world. All things being equal to grow post COVID-19 we need to manage at least one aspect of the digital customer life cycle better than we were doing before COVID-19.
That means we need to achieve one or more of these things;
- Increase Awareness
- Improve Conversion
- Increase Margin
- Decrease Customer Acquisition Costs (CAC)
- Increase Life-Time Value (LTV)
Before we even talk about increasing awareness though I think it’s important to stress that the very first thing we need to do is to think about who and what our target market is, and what their underlying intent is.
A very common mistake is to skip this 'design' stage and impatiently go straight to execution and start running PPC (Pay Per Click) campaigns or whatever. If you do this it will be very easy to spend a lot of money quickly and maybe even drive a lot of traffic to your site/app but the conversion and ultimate commercial success of what you’re doing will disappoint.
So first things first...who will buy our product/service post COVID-19 and why? Sometimes it’s not a straightforward question and there might be a range of views across companies and teams.
Once you feel that you are clear about who your target customers are then we can move on to the first challenge... we need to make them aware of the benefits of our product or service.
It goes without saying that people can’t buy our product/service if they don’t know about it so how can we increase awareness of it cost effectively? It depends what it is (particularly whether it’s B2B or B2C) but Social Media is a great way of increasing Awareness.
It costs nothing to post on Social Media and it should form part of your awareness strategy. (We ran a test video campaign on Facebook for gro.team recently and for £20 we achieved 27,479 highly targeted 3 second video plays and 169 link clicks. That is £0.000727 per view or £0.11 per click). More 'shareable' products or services such as holidays, clothes, gadgets or food do particularly well on Social Media of course.
In broad terms this means converting more of your site/app visitors into paying customers. Conversion is a mix of art and science but fundamentally purchasing is an emotional activity that people then like to explain/self justify with facts and a logical rationale.
To encourage the purchase of our product/service we therefore need to create the right emotional triggers and provide a logical framework to underpin the purchase.
Sales theorists will tell you that fundamentally people buy to move closer to pleasure or further away from pain so these are the emotional buttons that we need to push.
We have seen conversion rates as high as 30% for single focus web sites receiving well managed visitors with good intent (such as 'Apply for PPI') but 5-10% is more realistic and achievable for less one dimensional products/services.
Clearly increasing prices in a COVID-19/post COVID-19 world is tricky but that doesn’t seem to have prevented the supermarkets whacking their prices up of course. Decreasing costs is normally the next thing to be looked at and given the big picture we have seen suppliers take a pragmatic view and be much more amenable to reducing their prices than they might have been in the past.
Decreasing CAC normally means decreasing the Sales/Marketing costs and/or increasing its effectiveness. Done properly Digital Marketing should be more cost effective than traditional Marketing due to the enhanced ability to segment customers and target underlying intent.
If you can slow down the rate at which you lose customers you will clearly increase profits and it’s a truism that it is cheaper to keep a customer than to acquire one. Maybe you could look at better customer life cycle management and increasing loyalty by proactively adding value to existing customers?
Admiral recently contacted me to say that there have been less crashes in the world of COVID-19 so they were going to transfer a small insurance premium rebate into my bank account. It felt like great CRM to me and has definitely increased my loyalty to Admiral.
Some steps to take to COVID-proof a business for a second wave…
Clearly any steps to increase the revenue contribution of remotely distributed/online products/services is one way to lessen the impact of any second wave of COVID-19. You might need to be really creative in terms of how you can pivot your business to be more digital. One example I saw today was a business that pivoted to sell dog rather than human food online... nothing should be off the agenda.
Stay safe and good luck.