How Crises Force You To Adjust Your Actions
Every crisis is about disruption. Whether this is a financial crisis, the loss of a job, a natural disaster, a divorce or – what we experience right now – a virus that shuts down the entire world: We require change to move forward and to get through a crisis.
If you look back at any personal or professional drama in your life, you will realize that you needed to re-invent yourself, improve your skills and level up to get through it. And when you were not able to level up and cope with the situation, you very likely found yourself in an extended period of suffering.
Why is that the case? Because by definition, a crisis is a time of intense difficulty or danger. It is a situation where everything you applied previously does not work anymore.
Why Is That?
Partly because you face new problems where your existing skills just don’t seem to apply anymore. And partly because your environment also changes (depending on the type of crisis) and your environment has different needs than before the crisis.
Looking at a natural disaster like the earthquake in Haiti of 2010 or thinking back of the Tsunami in Southeast Asia of 2004, everything that existed before these disasters became totally irrelevant with this crisis. Who cares for a pay raise if you don’t even know where you will sleep tonight? Who cares about bad grades in school if you don’t know whether your family is still alive? Everything becomes irrelevant.
Though natural disasters are an extreme form of a crisis, financial or personal crisis are not much different in their effect. If you lose your safe job all of the sudden or if your partner breaks up after many years, you find yourself in a very similar situation like people that are hit by a natural disaster: Your existential basis suddenly does not exist anymore. Your personal reality is shaken up. Nothing is like before.
Thus, the current Corona crisis it not different in its effect than other crisis as well, just that more people are affected than with previous crises. People in a crisis have totally different needs than people that feel safe and protected. This is a fact that you must consider when you have a business these days. If you are a business owner, you need to disrupt your business model. Disrupting my business model? In times of crisis? Isn’t that risky?
4 Reasons Why You Should Take This Risk
No, the only thing that is risky is to keep doing what you did before the crisis – this could be the end of your business, for several reasons:
1. The most obvious reason is that your business could face business interruptions because your business is impacted by shutdowns and restrictions. You need a Plan B and C to know how you will generate income even in case this situation stays around longer. Just waiting and hoping is not a sound business strategy.
2. Your customers face different needs that you need to address – some customers may need your services or products more than ever, some customers may not see the need for your product at all – you must adjust your marketing and your strategy to these changed needs.
3. Your business situation may have changed because your supply chain is impacted and you cannot source the required parts or because costs are impacted (positively or negatively) – you need to be flexible, be on top of the game and create close relationships to your suppliers as well as keep up to date on current news to know how your business will be impacted.
4. Your customers may have cashflow issues that could impact your business as well because either they delay investments in you or because they cannot afford your fees anymore. You need to find a way to address this and offer a solution to make sure that you stay in business in the long run.
As business owner it is your responsibility to navigate your business through times of crisis. As the old proverb says: “When the sea is calm, every ship has a good captain.” It is how you handle the storm that differentiates a leader from a manager.
Sir William Ward summarized the different mindsets of people beautifully when he said:
In times of crisis, you need to be a realist and adjust your sails. It is YOUR responsibility and YOURS ALONE to come up with new ideas and make the right adjustments.
Your Competition Never Sleeps
The worst thing you can do right now, is to lean back and wait. All your competition is already making moves to adjust to the new situation. You will fall behind significantly if you don’t start disrupting.
A businessperson I know took more than 2 weeks to start initiating moving the business online after the crisis started. This business lost approximately 10% of their clients because they found other alternatives in the meantime that they found great and have no reason to go back. Another business made the same change within 24 hours – they won significant client loyalty. On top, they started to promote during the crisis for the re-opening of the store already and made special offers ahead of time. Speed of implementation is everything!
We also experienced a huge influx of questions from our clients and other people in our network like “How do I create my own online course?” The questions started repeating so many times that we decided to create a self-study course on how to create an online course. Adjusting the sails based on customer needs. Normally we implement software solutions for customers but because many of these systems include the setup of online courses, we needed to expand our offering, quickly. In one week, we got the course online to answer all customer questions on that topic. Did you experience such type of questions? How are you addressing them? Do you address them at all? And how fast do you get to action?
Looking at our own business, we disrupted our business model as well: Instead of charging the standard 4-digit upfront payments that are normal in our industry, we looked at: How can we serve more customers in the crisis, give them a jumpstart and position our clients for success? We did something that most people would call CRAZY! We REDUCED our upfront fee significantly to lower the entry barrier and we REMOVED RISK by tying ourselves to the client’s sales – if they don’t sell, we don’t earn. Sounds totally crazy, right? BUT: Our sales are crushing!
Because people NEED our services (we help business owners to move their business online) – now more than ever! – and we offer them a very low entry barrier. This offer is a total no-brainer for anybody that really wants to get their business online! On top, we even deepen the relationship to our customers, because we don’t only implement a solution (which we always did), but we consult them on the strategy, they can simply reach out to us when issues arise and no extra invoice is sent – because we only earn when the customer earns.
We expected some resistance to the sales share, but we took a risk and tried it. And so far, the responses are insane! Our clients are HAPPY to pay a sales share – because before they often earned nothing online.
What we also realized is that often when you implement e.g. a sales funnel, the funnel itself is not the problem when it does not convert. It is the missing skills of customers to fill the funnel and to read the numbers correctly to find out where the problem really is. With this new model, we can show the customer on an ongoing basis exactly where the issue is located so that the customer can intervene immediately. Thus, it is a win-win for all parties. This new model is a great success and is well adapted by our clients. If you need help moving your business online, you can sign up for a free discovery session to find out how we can help you as well.
However, before the crisis, we would have never done a model like this. Mainly because the clients who really wanted to move online also had the means to pay the high upfront fees. Due to the crisis, a whole new type of customers rushed into the market. But because they want to do everything super quick, the risk is that they don’t take the time to look into a solid strategy, issues will arise on the way and it will fall back on our reputation when people start spreading that the systems we implement did not help them. Thus, we needed to adjust our sails if we wanted to take advantage of the new market environment. And we did.
Looking at your own business, have you disrupted your business model? What can you do to adjust your sails and take advantage of favorable winds?
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