When Covid-19 hit, businesses had to react quickly and with limited foresight. Immediate considerations dominated decision-making. For 2021, that reactive stance needs to change.
Businesses have to focus on creating deliberate, but flexible, long-term plans. Here are three strategies that will help businesses go on the offense in 2021:
- Treat Cash Flow Like a Spigot
Lack of cash flow is one of the top reasons businesses close. Under normal circumstances, only half of all businesses last five years or more. This past year resulted in closures at a much higher rate. In 2021, cash flow management will be critical.
Look to cut expenses where it makes sense. If you are using less office space, consider ending your lease to save rent and utilities. Shut down cell phone accounts you no longer need. You may benefit from joining a group purchasing organization to leverage price breaks on the office supplies you do still need.
Businesses should also pare down subscription services. Order fewer magazines and other publications, or get online-only access. Cancel memberships that aren’t actively growing sales and revenue.
On the revenue side, look for easy ways to increase sales. Online retailers should follow up on abandoned carts to encourage customers to return and complete their purchase. Social media offers numerous ways to do this.
If you’re dealing with a distracted shopper, a Facebook ad with a helpful infographic, useful tips or even a joke might be enough to nudge them back to their cart. If the shopper seems to be suffering from sticker shock, posting a coupon code could nudge them over the line. To discourage shoppers from throwing something back to offset shipping costs, a flash shipping sale could both seal the deal and increase your average order value.
Finally, analyze sales on all your products and services. Apply the Pareto Principle forward and backward: Drop your bottom 20% of performers and focus on your top 20% of sales.
- Stay the Course on Advertising and Marketing
Executives often consider marketing a cost center. And when recessions hit, marketing budgets get slashed.
Past recessions show this is counterproductive. Brands that continue (or grow) their marketing see better performance.
Prior to the Great Depression, for example, Post was the leading company in dry cereals. But when the Depression hit, it cut its marketing budgets. In contrast, Kellogg’s increased its marketing budget and launched a new product, Rice Krispies. The company’s profits grew by 30%, and it took over the leading position in the dry cereal market.
This pattern plays out time and again. Researchers have reviewed the impact of advertising during the 1981-82 recession and recovery, for instance. They found that in 1985, sales for companies that aggressively marketed through the downturn had risen 256%.
The conclusion couldn’t be clearer: Sticking with — or even adding to — your marketing efforts during a downturn is the way to go. It’s vital to continue email campaigns and social media activity to stay connected with customers and the community.
In light of the current crisis, consumers want to hear how brands are helping out in daily life (77%) and how they are responding to the pandemic (75%). Seventy percent of consumers want brands to be a reassuring voice. Social media is the ideal platform for telling your brand’s coronavirus story and comforting your audience.
Here’s why it’s worth the effort: Brands that continue marketing through recessions increase their visibility when competitors stop. It’s estimated that brands that stop marketing now will see a 39% decline in brand awareness after Covid-19 passes. It proves the old maxim: “Out of sight, out of mind.”
- Reconsider Your Human Resources Programs
It’s no secret that the pandemic upended the U.S. economy. A labor market that was experiencing record low unemployment turned into a landscape of layoffs and furloughs.
While Covid-19 may have put a damper on rising wages, labor remains a company’s highest expense — and most valuable asset. This is not the time to neglect your people, so work to improve your human resource programs in the following areas.
- Remote, Hybrid and On-Premises Work
When coronavirus struck, many office workforces shifted to remote work overnight. While a recent Gallup survey found that 33% of U.S. employees are “always” working remotely (down from 51% in April), an additional 25% do “sometimes.”
Clearly, remote work is here to stay in some form for the foreseeable future. Many companies will permanently move to working from home, while others will create hybrid models. Some companies moved to remote work temporarily but plan to return to office attendance as soon as it’s safe.
Going into 2021, be deliberate about deciding your course of action and update your written policies accordingly. If you do intend to return to on-premises work, review and execute long-term health and safety policies. Use your social media to keep both your internal and external audiences aware of the steps you are taking.
Businesses with employees in the workplace must establish safe social distancing practices. Desks should be spaced at least 6 feet apart and plastic barriers installed to separate customer service representatives from customers. Make mask-wearing mandatory, and instruct employees to call in sick (or send them home) if they show any symptoms.
Social distancing won’t be permanent, but everyone will be more aware of how contagious diseases, like the flu and common cold, spread. Now is the time to update policies for handling communicable diseases in the workplace.
- Employee Recognition
The pandemic has been a stressful time for employees, and the lack of in-person workplace camaraderie has made matters worse. To keep up your team’s morale, recognize high performers publicly. LinkedIn is a great platform for this, but Facebook, Twitter and Instagram work as well.
Posting accolades on social media builds up your employees and boosts your company’s brand. Employees love sharing posts like these with their network, which will further increase your social media reach.
- Inclusion, Diversity and Equity
Not long after Covid-19 hit, the deaths of George Floyd, Breonna Taylor and others forced a national racial reckoning. With racism and discrimination dominating public awareness, many employers are reviewing their inclusion, diversity and equity programs. Likewise, many companies are looking at diversity in their workforce and senior leadership to identify gaps.
According to the Society for Human Resource Management, 35% of Black workers say discrimination exists in the workplace. While one-fifth (21%) of all HR professionals admit seeing discrimination in the workplace, that number goes up to 49% for Black HR professionals.
To address this issue, businesses will need to assess their workplace and hiring practices, talent development programs and promotion opportunities. Most people consider racial and gender diversity first. However, discrimination awareness and training should include age, disability, cultural and LGBTQ status as well.
Use your social media to highlight your efforts, going beyond corporate statements of support for racial justice. Spotlight diverse employees, give shoutouts to minority-led business partners and note any financial contributions you make to organizations working toward racial equality.
Uncertainty rules during a “normal” recession, and that’s unquestionably the case during the pandemic. Over the last year, businesses have had to make major decisions to answer immediate needs based on imperfect forecasts.
Refocusing on the future will be key for 2021. It’s time to create long-term plans that are flexible enough both to handle changing public health concerns and drive recovery.