The past three years have been eye-opening for business owners, to say the least. Some businesses had to close, some survived and some thrived. Even more, the business environment has changed so quickly that businesses that were thriving during one period may be struggling not even a few months later.
One thing is for sure — every business was impacted by the pandemic, supply chain issues, staffing shortages, ongoing threat of a recession, and more. The business community is resilient, and as long as leaders are keen to adapt and learn, they can benefit from applying the lessons learned in the pandemic era to emerge as an even stronger business for the remainder of the decade.
We will discuss four of those lessons in a four-post series. This post covers the first lesson of investing in resilience.
Lesson 1 – Invest in Resilience:
Having a resilient business is extraordinarily important to business owners. Since 2020, issues such as medical capacity, labor shortages and supply chain fragility have constantly reminded us that it’s worth it to invest in increasing the resilience of your business.
Think of it this way, any investment into resilience is essentially the same as buying an insurance policy that will pay off greatly if the environment suddenly changes, as it did in 2020.
For general business, increasing resilience means:
- Decreasing dependency on single-source suppliers for production.
- Decreasing dependency on single sources of promotion.
- Increasing the diversity of customers and clients so that the loss of one major client or customer group doesn’t destroy your revenue source.
- Making sure employees are happy and content so risk of employees jumping ship is significantly reduced.
- Having a good understanding of overall risks to the business so that contingencies and plans can be made before real risk materializes.
Here are a few specific themes that can help develop more resilient brands and businesses that will be relevant into the future:
- Brand matters! Never let your brand be tarnished or cheapened to reach short term goals. This includes over-reliance on discounting, cutting budget on customer service to realize short-term profit goals, or aligning with short-term fads that won’t age well. Your brand is powerful, but making short-sighted decisions can damage credibility, which is very difficult to restore once it’s been questioned.
- Focus on the long term, not just short term. Both strategies are important and play different roles in overall promotional strategy, but a well-developed marketing campaign should consider multiple time horizons. Typically, strategies like SEO, PR, and branding take longer to develop but can have huge momentum when they are nurtured properly and given the time they need to work. Shorter-term acquisition strategies like paid search help to fill immediate gaps while awaiting longer-term strategies to take hold. When done correctly, short term marketing strategies can be synergistic with the longer time horizon strategies.
- “Do Good” by your customers and employees. Some companies do good deeds simply for the purpose of setting up positive PR but supporting communities and causes can do much more. Many great brands and organizations are doing good things that they never promote or advertise. In a competitive environment, doing good deeds promotes the resilience of your brand image, and it just so happens that it can promote a stronger community for your customers and employees.
- Don’t forget loyalty incentives. Many organizations focus their incentives almost exclusively on winning new clients or customers. Yet the cost of winning a new customer is typically much higher than the cost of retaining an existing customer. When it comes to being resilient, the best organizations often focus on playing defense first to keep customer loyalty high and keep those loyal customers from switching to other brands. If you haven’t considered a loyalty strategy yet, it may be time to look at ways to show appreciation and incentivize your valued customers to stay loyal to your organization.
Takeaways and Next Lessons
Overall, ignoring investing in your organization’s resilience means that you’re increasing your exposure to external risk. While it’s never possible to eliminate risk altogether, it’s entirely possible to reduce your exposure to risks without having to spend an arm and a leg. Moreover, many investments in resilience actually benefit your organization in the long run in more ways than simply reducing risk exposure.