Coronavirus forcing businesses to adapt and rethink how they make money

COVID-19 Has Forever Changed the Customer Experience

Coronavirus forcing businesses to adapt and rethink how they make money

The first days and weeks of the pandemic forced companies to initiate significant changes to their customer experience. Nearly a year later — with the risks of exposure still high in the U.S. — many of those changes have become habits. Because habits tend to stick, even with vaccine rollouts, many industries face a changed landscape for the future.

“The realization has hit all of us that this pandemic is not a two-week or a two-month disruption,” said Tim Calkins, a clinical professor of marketing at the Kellogg School. “It’s going to go on for a very long time.”

So how can your company recalibrate for a changed world? Calkins offers tips for companies looking to adapt their customer-experience strategies for the long haul.

Take Stock of What Changes Are ly to Stick

Calkins advises companies to first take stock of the profound changes in their customers’ daily lives and figure out how those changes will realistically impact their business over the next months and years.

“You have to ask your company, ‘What’s now changed in our world? And what does that really mean for us in terms of how we go to market and how we interact with our customers?’” he said.

Take retail. Even before the pandemic, retail clothing brands were carving out direct-to-consumer niches on social media sites. This trend quickly accelerated when shoppers were abruptly stuck at home.

“Even if you don’t buy a lot of clothes, occasionally you still need a new pair of socks,” Calkins said. “With all of us forced online, it didn’t take long to realize that online shopping is easier in some respects. Which means we’re not going back. If you are a company that wants to build a brand in this space, your tools have now changed, and your opportunities have changed.”

Or take the hospitality industry. With people eager to get their homes, there are early stirrings of a recovery in vacation and resort travel. But business travel still has not budged. 

“For business travel to really happen, you need two people available to meet, and right now nobody is available to meet,” Calkins said. “And there’s no indication that’s going to happen for a very long time.”

Even when hotels do reopen, Calkins sees them having to adapt their marketing efforts to new customer priorities. For business hotels, this shift will include a new focus on safety and cleanliness.

Moreover, hotels that previously packed grand lobbies with restaurants and shared workspaces, or that hosted large conferences, may need to rethink how they use those spaces — at least in the medium term.

“The idea that you’re surrounded by other people in a shared experience was always so important to hotels. That created the social energy that a lot of hotels built their brands on,” Calkins says. “Even when people begin to travel, it may be years before people seek out and really desire that social experience.”

Embrace the Online Customer Experience

With much of life having shifted online — and much of it ly to stay online for the foreseeable future — it is time to ensure that the online customer experience is just as carefully designed as the in-person one.

Before COVID-19, for instance, most grocery shoppers made purchasing decisions in the store, choosing products what they saw, touched and compared on the shelves. As a result, companies invested in shelf-placement plans, in-store promotions and point-of-sale merchandising to drive visibility and sales.

As the dust of a new, post-COVID reality settles, the organizations that experimented will have many more tools at their disposal.

“Now, so many people are ordering online,” Calkins said. “So the whole decision process is different for customers.”

Delivery and curbside pickup have added new steps — and new people — into the customer experience. Stores now bustle with employees and contractors filling orders for customers. These buyers are more interested in speed and accuracy than bargains, so they aren’t influenced by on-shelf promotions.

“All the stand-in shoppers want is the products to be in stock, to be easy to identify, to be clear and simple,” Calkins said. “They’re motivated by very different things than consumers shopping for themselves.”

This means if grocery stores and other retailers want to steer customers toward certain products, they will need to incorporate promotions into other parts of the experience. Some grocery stores have begun adding free product samples to customers’ online orders, for instance.

And don’t forget the importance of the last mile. Reliable, quick and safe pickup or delivery is now squarely a part of the customer experience: Mess it up — or do it worse than your competitors — and your customers may start shopping elsewhere.

Recalibrate the In-Person Experience

There’s no doubt that the in-person customer experience has taken the biggest hit from COVID-19.

“For many retailers, that retail experience was always so important,” Calkins said. “It was fun and exciting, with lines of people and cool music that helped define the brand experience. Now, if you even go into the store, it’s more of a solitary experience and it’s very different for brand building.”

Some of this fun and excitement is just not possible right now — and that’s okay. According to Calkins, “care” should come first. This means taking physical steps to ensure the safety of customers and staff, as well as sending reassuring signals to customers that make them feel cared for.

“Consumers really want to know that a company cares,” Calkins said. “Given all the uncertainty in the world right now and all the risk and the hazard and the way people are feeling, there’s nothing more important.”

Still, it can’t be all hand sanitizer and no swag — particularly for brands that have strong emotional appeal, and where customer service tends to be less transactional and more relational. These companies need to be particularly creative about brand-building.

Take the Best of Both Worlds

Will customer-experience experiments stick around when COVID-19 is in our rearview window? Maybe not. But maybe it will.

Above all, it’s important to remember that a constantly changing environment means constant opportunities to learn and adapt. Eventually, as the dust of a new, post-COVID reality settles, the organizations that experimented will have many more tools at their disposal.

“When constraints go away, or we are met with new constraints, all of a sudden we can try new things,” Calkins said. “This can lead to new ways to connect with customers, new product offerings, new opportunities and things that hadn’t been considered before.”

Education has long been viewed as a change-resistant industry: Teachers determine the information they want to teach, establish an approach to teaching that material and then deliver it to students in the classroom. The shift to remote learning has upended that. In the process, it has presented new possibilities for the ways teachers and students interact.

“Everyone’s been forced to do things they never planned to do,” Calkins said. “And what we’ve learned is that a lot of these new techniques let you do things that were never possible before: things that in so many ways are far superior to what we used to do. You look back and you wonder why some of these ideas had trouble taking off before?”

The advantages of platforms Zoom for many teachers and students — from the time saved commuting to schools to the myriad ways of engaging with breakout rooms and discussion boards — can be transformative.

But teachers are learning the limits of remote teaching as well: It’s tiring, and some tasks are more difficult.

Calkins looks forward to a future when the education industry can take advantage of the best of both worlds, designing student experience with the optimal technologies for different types of engagement.

“The customer journey in the world of education three years from now will be completely different than it was three years ago,” he said.

“We’re going to see these new tools being used not to the exclusion of in-person — I don’t think anybody thinks that’s ideal — but in combination and in different ways that will optimize a learning experience.

If ever there has ever been a time for that kind of expansive thinking, it’s now.”

This piece was originally published in Kellogg Insights.


The importance of business agility during the COVID-19 crisis

Coronavirus forcing businesses to adapt and rethink how they make money

What do you think is the prevailing (and essential) ability these companies are showing, in order to figure out quick, effective solutions to face this crisis? The answer is business agility.

What is business agility?

Business agility, also known as organizational agility, is the capability of a business to be adaptive, flexible and creative through a changing environment. Agile businesses respond quickly to opportunities or threats, whether internal (e.g. failing business operations) or external (e.g. shifts in trends or competitive markets).

“Success today requires the agility and drive to constantly rethink, reinvigorate, react, and reinvent.” – Bill Gates

Other core characteristics of agile organizations are:

  • They are customer-centric: They tailor their services and products to customer demands. Agile organizations are eager to restructure resources and operational systems to adapt to customer needs.
  • They reinforce stable team dynamics: They emphasize on building well-coordinated teams that respond collectively to crises and changes. They achieve that by promoting clarity in task division and responsibilities, and by creating stable internal systems and processes.
  • They nurture a growth mindset: They welcome failure as part of learning and don’t label it as a hindrance to their progress.

“Fail early, fail often, but always fail forward.” – John C. Maxwell

The COVID-19 crisis has posed numerous challenges to businesses. Many companies are already financially impacted and the global economy is predicted to be hit to the tune of $1 trillion according to the World Economic Forum. To overcome all these burdens, employers are becoming more agile.

When the COVID-19 outbreak evolved into a pandemic, companies took drastic measures to protect employees on very short notice. Provided that most businesses take a long time to make a decision and then act on it, this was a desperate call for greater agility on very short notice.

The emphasis of agility is – and will continue to be – in three areas: employee needs, customer expectations, and economic uncertainty.

Addressing and responding to employee needs

What are the biggest needs of employees amidst a health crisis? Staying healthy, feeling safe, and being close to their loved ones are definitely their biggest priorities. That’s why employers search ways to adapt to these needs and protect their employees’ wellbeing.

These are some examples of how companies have altered their policies and practices to respond to these needs so far:

In cases where working from home is not a realistic option, such as in production or retail services, companies have introduced other types of alterations to existing policies.

For instance, Walmart and Starbucks, at the beginning of the pandemic, offered a more generous sick-leave package to their employees, showing that they prioritized their health and security.

Also, and other companies restricted office visitors to limit the spread of COVID-19 in the premises.

As the events evolve, companies enable new measures; this situation unfolds so quickly that regulations and precautions become quickly outdated and require reconsideration. By remaining flexible and agile, and available to listen and help, employers will be able to identify future employee needs and act fast upon them (e.g, new policies, safety regulations, etc.).

Understanding customer needs and expectations

The ongoing socio-economic crisis has also affected consumer behavior. Most physical stores are closing until further notice and many companies, for example in the hospitality or entertainment sectors, have “frozen” their services to respect the rules of social distancing and self-isolation.

In response, some businesses are offering digital solutions or are altering their services. Some of them are moving their customer support to online, with live messaging and/or video-calling options.

Others, for example in retail or supply sectors, have started to expand and adjust delivery services to meet and adapt to customer expectations.

Also, some companies responded quickly to customer needs and gave some of their products free of charge to support customers in these uncertain times. For example, Google is offering its premium feature Hangouts for free until July 1 to help companies continue their meetings via video-conferencing.

the type of services and products your business offers, here are some tips that can help you stay aligned with your customer needs:

  • Listen first, fix second: Reach out to your customers and listen carefully and empathetically to what their problems are. Once you’ve heard their stories and concerns, consider what you can offer them, and how you’ll make it happen.
  • Restructure your resources: To be relevant and helpful, you might need to tweak some of the services you provide, re-allocate your budget, or redistribute tasks to employees from scratch.
  • Nurture relationships with customers: Even when you have to close your stores or pause operating for a while, stay in contact with your customers and build honest relationships with them. This will enable you to sustain a good brand reputation and motivate customers to be around when the crisis is over. The same advice applies for vendors, suppliers and other partners. Remain available and stay connected.

Surviving the economic turmoil of a crisis

The adverse financial effect of this ongoing crisis on businesses has already started to show itself.

Some companies, especially in the travel, hospitality, and entertainment industries, are hugely impacted and forced to take difficult measures, including layoffs or reducing quality in product or service, in order to survive.

But decisions such as these – while beneficial in the short term – can severely hurt your employer brand and customer satisfaction in the long term.

There is no perfect formula to predict the future of each sector; business leaders can picture the next day each company’s unique characteristics. What is the current cash flow and how will it change? Are the offered products or services useful to consumers during – and after – the crisis? If not, can you transform them and make them more relevant?

Business agility has a crucial role here; being able to consistently evaluate all necessary information to adapt to current effects is essential. So is foreseeing trends of the next day, month, quarter, or year.

After meeting with your financial team, shareholders, and vendors, and with a clear overview of the company’s financial status – including current cash flow, credit situation, revenue and expenses, etc.

– on hand, here is what you can do to reinforce agility:

  • Be active: It all starts with your attitude; if you perceive it as a challenge and not as a threat, you’re more ly to have a positive approach. Find the silver lining between sustaining and innovating. You might need to adapt some of your products or services; be available, listen to customers, and explore new territories.
  • Be competitive: Observe what your competitors do and get ahead of them. Remain aggressive; bring your marketing and sales onboard and get your best services out there. Keep your brand reputation strong. Your customers will appreciate that in the long run and you’ll benefit from their loyalty.
  • Be resilient: The next step after business agility is safeguarding organizational resilience – the ability to recover and learn from failure and loss. Use this experience to understand your operations’ pros and cons, and what you can improve in the future to thrive.

A final note: the ongoing crisis is just a large-scale reminder that businesses are constantly facing changes that threaten their bottom line – some minor, some major. Being agile, flexible, and resilient will better position you to overcome these challenges as they surface, with minimal impact to your business.


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