Sales, Marketing & Cash in the Age of COVID-19. A New Normal.
Coronavirus is the Black Swan of 2020. We are now in a war-time environment against an invisible enemy. Disruptions are almost certain to multiply in the weeks to come. It’s no longer business as usual for the rest of the economy. With lives at risk, we hope that conditions improve as quickly as possible. In the interim, we should brace ourselves for turbulence ahead and make some pivots.
We know the stress you are under. This blog article provides guidance for SMB’s on how to ensure the health of your business while dealing with potential business consequences of the spreading effects of the coronavirus.
I hope you, your families, and friends are healthy and staying safe. There is no “sale” worth jeopardizing your health. No meeting is worth exposing you or your team to something for which there is presently no cure. Please be careful.
If you’re running an SMB, your first priority (after your family) is keeping your employees and customers safe.
I was running an early stage software company of 70 people in April of 2008. This feels EXACTLY like those situations. Fear and uncertainty reign. No one person or group has a completely accurate view of the situation because it is SO complex and unprecedented.
Here are a few observations on how I would apply my own experience to running an SMB company today:
- This is a conscious shutdown of our economy, trading jobs for saving hundreds of thousands of lives.
- We are in a Coronavirus recession or about to see a recession.
- The Covid-19 virus will change how we interact, communicate, shop, travel, and work for at least a year and likely many more.
- Have 1-month, 3-month, 6-month, and 12-month plans
- It’s inconceivable that you can have the same business model today as you did 30-days ago. What does your new business model look like?
- Dig deep into your sales pipeline and forecasts. You should anticipate that your customers may revise their spending habits. Deals that seemed certain may not close. Most businesses have hit the pause button. The key is to not be caught flat-footed. It is key to understand the industry segment of your customers and your customers’ customers are in. It will help you pivot your sales & marketing to more healthy segments and It may determine if you get paid.
- Expand your Online presence. Most of the world is at home living and working. Increase your allocation of Digital Marketing. Look for new revenue steams generated through Internet platforms. Target new audiences that are not getting crushed by Coronavirus disruption. A mistake some business owners make is reducing direct and indirect expenses that are designed to grow revenue. You need some level of investment in sales and marketing to bring in revenue. Are you spending marketing dollars in areas where where your best and largest customers are located? Look for marketing with a good ROI.
- Look for opportunities for “customer financing” – getting happy customers to pre-pay for the next 12 months of product/service and offer something special in return.
- Consider relevant offers and promotions. For instance, you can offer percentage-based discounts, free shipping, a seasonal sale, and so on. It would be best if you could come up with some new ideas that are more relevant and empathetic during this time.
- Do you really have as much cash runway as you think? Could you withstand a few poor quarters if the economy sputters? Have you made contingency plans? Where could you trim expenses without fundamentally hurting the business? Ask these questions now to avoid potentially painful future consequences.
- Recognize that your investors will act in their interests, which may no longer be yours. If I had a term sheet on the table or was in mid-raise with “soft circles”, I’d expect it will fail. Venture funds will focus their dry powder on their existing portfolio companies. Venture funds will continue to invest, but only after a few months go by to allow them to reassess the market dynamics and even then the valuation they offer will be much lower even if there is no apparent reason for that. Angels are shutting down all investing until they understand their own personal liquidity. I’d expect them to be cautious and slow-moving for at least 6 months. I’d look to find capital from family and friends and credit cards and second mortgages to stay alive.
- Take action now.
- Act with compassion. We are all in this together. Understanding and empathy are key.
We have weathered business downturns before. We’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances.
We need to throw the norm out of the window and revise our marketing and sales strategies.
Stay healthy, keep your company healthy, and make some pivots in your world. We will get through this together!
I have run several technology businesses including a digital marketing agency for 10 years and I’m happy to help. If you want to talk about your business, please reach out… firstname.lastname@example.org.