Entrepreneurs, small businesses and corporations alike are seeing the light at the end of the tunnel as the economy seems poised for a strong rebound as the pandemic fades. As such, business owners are increasingly shifting from a risk-off to a risk-on perspective in their business planning. Companies are once again looking to invest in growth as well as make up for any ground lost in 2020. Top business coach Charles Gaudet, CEO of Predictable Profits, is seeing that sentiment among many of the entrepreneurs he speaks with.
As somebody who has consistently advocated that companies need to stay the course in times of uncertainty and continue investing in growth in order to come out ahead of competitors who engaged in belt-tightening throughout the downturn, Gaudet saw many of his own clients continue to grow throughout the pandemic. But for those who are now looking to return to the offensive and kickstart their growth, he had some advice. We caught up with him to get his playbook on how companies should look to supercharge their growth in the economic rebound.
What are the biggest challenges companies face coming out of a recession?
Charles Gaudet: The global recession has been a difficult time for many companies. And while it may seem like the best course of action is to cut costs and tighten your belt, this can actually end up doing more harm than good.
- Pulling back advertising reduces your share of voice, making it easier for competitors to get their brand in front of your buyers.
- Laying off staff requires retraining and re-educating existing employees on what works (and what’s no longer effective).
- Reducing marketing initiatives makes it easier for more strategic competitors to capture market share.
Those who pulled back during tough times must overcome key challenges to bring momentum back into the business. This includes:
- Repositioning their product/service so they are a “must-have” instead of a “nice-to-have.”
- Taking the focus off of price so prospects buy even if what’s offered is more expensive than the competition.
- Developing an efficient omnichannel marketing strategy that increases awareness and influences their ideal client into making a purchase decision.
What capabilities need to be rebuilt first after cutbacks that may have been made?
CG: When companies cut back, they often focus only on their current needs instead of how their buyers changed. Companies need to consider their buyer personas and the needs they have today, as well as what will be needed tomorrow.
Companies must make decisions from the following options:
- Do we change the market to meet the existing message?
- Do we change the message to meet the existing market?
- Do we change both the message and the market?
- Do we do nothing and hope things go back to the way they were?
Those who adapted thrived, whereas those who refused to change ultimately suffered. As Dr. W. Edwards Deming, the leading management thinker in the field of quality, said, “It is not necessary to change. Survival is not necessary.”
Thriving companies adapt quickly and change out strategies that no longer work. This includes traditional sales tactics that have evolved to a digital-first model.
In some senses, are companies already behind the eight ball if they are ramping up investments once the economy is already rebounding?
CG: Those companies that didn’t invest in marketing during the recession are competing against those that continued reinvesting in marketing. In other words, those companies that focused on expanding their market share gave themselves a running head start. So, yes, companies that are just now ramping up investments are behind.
The only way to have minimized this disadvantaged position would have been to invest time or resources into growing market share while the competition was weakened.
To gain a strategic advantage, you must become top of mind and position yourself as the best decision in your buyer’s mind. This doesn’t require high costs either. For small businesses, you can gain strategic advantages on a minimal budget using a narrowed target and a well-orchestrated strategy that balances outbound and inbound marketing.
What do you think was the greatest lesson learned about this particular recession in 2020?
CG: We’ve seen two types of businesses — those that pulled back and those who leaned in.
Those who pulled back struggled. They focused on layoffs and reducing expenses to give themselves enough runway to weather the storm until things returned to “normal.”
On the other hand, there were a select group of companies in every industry that adapted quickly to the current situation. Instead of retreating, they applied a different mindset by asking: “Where’s the opportunity at this moment?”
And it’s these companies that leaned in and adapted quickly that thrived, even when the world was fundamentally shut down.
For example, when you think of the hardest-hit industries, travel is an obvious one. In the days immediately following the worldwide lockdown, sales completely dried up for one of my coaching clients who owns a travel company. However, by changing his message to meet the market and adapting quickly, sales quickly rebounded and exceeded previous levels.
In fact, because his competition pulled back and failed to adjust, my client quickly captured market share. During a time when the industry saw companies going out of business at a never-seen-before pace, my client experienced historic e-commerce sales, making him the #1 best performing travel company in the world within his niche.
That’s the power of being agile, leaning in, and adapting quickly.
What’s the most important question we haven’t asked?
CG: The most important question you haven’t asked is: “How can companies set themselves up to thrive right now?”
This question is essential for companies that want to create long-term sustainability and success. To understand this, it’s helpful to realize that the current business landscape has changed. With buyers being more discerning with how they spend money, they’ve become researchers.
On average, your buyer looks at 12-14 sources of information before making a buying decision. A team of Google researchers concluded that people look for information about a category’s products and brands, and then weigh all options against each other. Your buyers are looking at you and your competition as they cycle through exploring and evaluating their options.
It’s no longer good enough to have better products/services. You must have better marketing and sales strategies at all phases of the buyer’s journey. This includes strategies for making the initial buying decision, as well as staying top of mind.