Is It Possible to ‘Pandemic Proof’ Your Business?
COVID-19 has disrupted businesses and all walks of life. Lockdowns however necessary, have given rise to uncertainty which have affected revenues. Approximately 60 US retailers, representing $370 billion in annual sales, and over 50,000 physical retail locations have closed temporarily. Customer experience has been severely impacted in sectors such as travel and hospitality, healthcare, manufacturing, and ecommerce.
No one could have foreseen such a scenario, but the question arises: Can one pandemic proof their business? To answer this question, consider the Pareto Principle. 80% of the sales usually come from only 20% of the customers. Additionally, acquiring new customers is 7X more expensive than bringing back loyal customers. So the answer to the question “How to Pandemic Proof your Business?” is loyal customers.
John F. Kennedy had made a statement which stands true even today, “The Chinese use two strokes to write the word ‘crisis’. One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger, but recognize the opportunity.” The opportunity everyone has today is to nurture their relationships with loyal customers. Providing discounts is only transactional and is not true customer loyalty. Moreover, discounts can hurt revenues.
Customers are looking at the wholesome user experience. Such uncertain times are the best time to provide them with a better value proposition. In tough times like today, companies are capitalizing on opportunities to show their responsiveness towards customers. For example, Qantas and Virgin, quickly announced they would extend customers’ status for 12 months without review, with Virgin gifting additional status credits to its top three tiers of membership. FoodWorks, a grocery chain, has launched special shopping windows for elderly residents. These efforts highlight how brands are acting on solving different problems for customers. Loyalty programs are a great way to keep customers engaged with your brand. Better value need not mean higher discounts. A change in the rewards/activities of your loyalty program structure can show care towards communities and also catch customers’ attention.
Such meaningful interactions will cultivate brand loyalty, and these are the very customers who will help your business grow even in times of a slowdown. Loyal customers with whom you have developed an emotional connection with will also be your brand advocates. A Nielsen’s report suggests that 92% of consumers trust recommendations from family and friends above all other forms of advertising. Thus, customer loyalty is also helping brands acquire new customers without having to spend extra for it.
No one could have predicted the far reaching effects of a pandemic such as COVID-19, but an engaging loyalty program can always set your business up for steady growth by focusing on your customers’ needs.
This article was originally published on thewisemarketer.com