Which businesses will make it through COVID19 - and why?
Image sourced from Shutterstock on 21 April 2020. ID: 1536718037. Photo created by UfaBizPhoto.
What makes a business memorable?
I have been wondering about which businesses will survive the COVID19 crisis. Despite having lived in the same area for eight years now, I barely register most of the local small businesses, because their products and services are irrelevant to me. The ones I DO remember tend to be service providers rather than being straight retailers, and include one Japanese café, and two bars. I remember going to the Japanese café with my wife, and both of us being surprised at how good the food was. As for the two pubs, they are places to meet up with friends. However, I don’t go to any of these businesses often.
So then I thought; which places do I go to by choice beyond mere convenience – which ones appeal to me? And the answer is – nothing local. Instead, I mostly head into the city centre, 20kms away. These places in other locations speak to deeper needs than mere convenience, and include bars, restaurants, a cinema, and a clothing store. In these places, I feel both aspirational and “part of the action”, or connected to something older and deeper, in touch with Canberra’s heritage.
Things are going to change more than is obvious right now
Imagine that future date when lockdowns are finished, and consumers are cautiously starting to buy things again. Those businesses that have managed to stay solvent will notice a lot of consumer behaviour has changed. Many people who’d never tried online shopping and delivery services are now accustomed to them. And if the reason such businesses have stayed alive is because their online sales have boomed, then they’d seriously question whether having a physical storefront is worth the effort.
High-involvement businesses (such as medical services or places that appeal to customers socially) are ones that customers will go out of their way to find. If such places have had to pivot their business models or locations, and customers have followed them, then it may well occur to the business owners that working from home is a viable option. And governments, desperate to lower unemployment and perceived as supportive of businesses, may well loosen various regulations that make that easier to happen.
Does your business have a shallow or a deep reputation?
Before the world went digital, word of mouth mattered, so if your business did something unsavoury, people would find out – but the process was often slow and patchy. Now, however, reputation is available to anyone with a mouse click. Every business owner (and all of us as customers) has stories of bad treatment, and these get out sized attention. The ratings websites, though, have the advantage of accumulating experiences over time, adding some level of comfort that, generally speaking, any business lives up to what it states it does. I’d call that aspect of things “shallow reputation”, however.
To gain a “deep” reputation, however takes both time and real courage. It means that such firms stand up to be counted – now, in the crisis. This is where businesses that truly make a difference to people’s lives will be remembered. Such businesses dig deep to help where and when they can, not only to customers, but also to their supply chains.
What does the concept of “goodwill” look like now?
From what I can see, most – not all – Australian businesses are desperately trying to do what they can to stay afloat, and to retain their staff if possible. I’d argue that this crisis will define what the goodwill of any business (definition here: https://bit.ly/2S3LNE4) is actually worth.
I wonder if, in the digital era, the value of this has shifted quite a bit, and if it is now more volatile? Does it now, for example, include the personal relations between staff and management on one side, and customers on the other? I say this because in a digital era, when we are so distracted, I think that conceptions of loyalty and reputation are shifting too.
Not everyone wants to adapt – so steer clear of those who don’t
It appears that some corporations really don’t get it: https://www.smh.com.au/national/retail-giant-threatens-action-against-tenants-who-close-doors-20200422-p54mc5.html. Imagine yourself as a small retailer at present. You’re doing your best to look after your staff, your customers, and to keep your head above water. And then you get this letter “reminding” you of your obligations. How do you think you’d feel towards your landlord? If the only thing your shopping centre has to offer is convenience, but there is a better option available, why would people visit? And if you’ve treated your previous tenants badly, why would anyone bother renting space from you?
Likewise, if you’re a big organization with financial muscle, and you sack your staff at present,
(https://parliamentofdreams.com/2020/04/05/what-are-we-saving-and-why/amp/) then you’re going to face an enormous group of people who will remember what you did when the chips were down.
What will people say about such organizations in the months and years to come?
What path do you want to take?
Imagine having customers who speak of your firm 20 or 30 years from now in glowing terms. They remember the relief felt not just by your firm’s words, but by its actions. The fact that you tried to work with others to make a difference. That you gave office space to a young entrepreneur. That you paid for training for your staff instead of sacking them. That you collaborated with your competitors to make something the medical teams desperately needed. That you kept your store open until late specifically so that the exhausted cleaners, scientists and doctors could have something to eat.
These are epic stories. When the economy turns, as it eventually will, how do you plan to grow the goodwill nurtured by your actions in the crisis? How do you harness what’s been done, and continue to make a difference?
And what do you want to be remembered - and known - for?
