There is no single formula that applies to all businesses and industries. However, the following principles all focus on the top line, which can be a guide to make a road map.
1. Double your top and potential customers
Today's investments in helping valuable customers operate in times of crisis will strengthen their relationships with customers and pay dividends over the next few years. First, understanding the customer economy is necessary, followed by segmentation and targeting strategies that focus on the most valuable current and potential relationships.
In this changing environment, the best customers moving forward can be different. Consider the following drivers to better evaluate customer mix.
- Future customer value considering possible changes in volume, mix, and channel
- Customer's creditworthiness or ability to pay on-time
- Customer needs and costs to meet their needs
- Current customer loyalty (or decreasing trend) or potential new customer "stickiness"
The revenue from focusing on the best customers can be very large. A business service company has driven 45% revenue growth over two years simply by focusing the sales team's time and attention on the most promising customers.
2. Adjust commercial resources to reflect changing demand.
Demand patterns will inevitably change during and after the crisis. Customer value and purchasing behavior will change. They may need other products and services, or they may demand quality or premium brands. Channel preferences and mix can also move away from online, telephone interaction, and face-to-face contact.
The focus should be on the best customer segments in the most promising regions and products and services tailored to changing needs and customer needs. Also, close coordination with supply chain and procurement partners is needed to contain alternative sources and rebalance inventory for demand changes.
What is driving this change? In part, next-generation buyers and consumers prefer digital form of communication. It also typically completes most of the research prior to first contact with a sales representative, translating the nature of the sales contacts into more focused questions and favoring greater insight and speed.
While B2B and B2C sales organizations may still need some direct interaction or physical channels, companies with digital sales capabilities and channels can accelerate growth more flexibly during a crisis and strengthen their position to emerge stronger after the crisis.
Key considerations when evaluating potential adjustments include:
-How have customer preferences changed? Is this change temporary or permanent?
-What is the impact of these changes on demand for your current product?
-Given key criteria such as potential demand, ROI, time to market, competitive environment, and potential success, what are the most promising opportunities?
-How do you leverage your current assets (product, service, technology, end market, footprint, etc.), unique technology, or special relationships to redeploy and align your products to changing customer preferences?
3. Avoid permanent margin destruction discounts.
Discounts can be attractive to stimulate demand in times of crisis. Of course, competitiveness is more important than anything else, and price is more important.
But it's very important to adjust prices in a way that prevents long-term or even permanent margin erosion. we need to further refine our pricing and discount strategies. Discounts should be targeted and customized to different customer segments in a way that promotes incremental profitability.
For example, make a temporary discount of 10% of the list price for three months. Discounts should be aligned with other demand promotion policies, such as flexible conditions and free shipping, to ensure that accumulated discounts and benefits do not make a profit on the aggregate. Discounts should also be linked to operations and supply chains as a tactic to mitigate potential constraints.
Also, be careful not to mistake your willingness to accept the price for the customer's willingness to pay.
