Your clients have shifted. Here’s how to get them involved again

The shock from coronavirus has more disrupted than jobs, supply chains and financial markets. The consumer too has radically changed. For several companies now the number one challenge is to figure out where their B2C and B2B clients have relocated to and re-engaged with them.

COVID-19 is a beast separate from previous global disasters and recessions, such as the 2008 Great Depression and the Mideast oil crisis, the triggers of which were financially induced. Health and safety issues are the underlying cause of the pandemic, and thus consumer focused. The immobility of consumers and their willingness to be secure in the current world has culminated in uncertainty in sales and profitability across categories of idiosyncratic goods, culminating in a net economic downturn of a nature that has not been experienced by anyone alive today.

Government-imposed quarantines, self-isolation, and shop and office closures have prompted further customer shifts, and thus firm-based behaviours. The outcome of the wellbeing and concerns of consumers has resulted not in a typical recession but rather a “deaccession,” where supply and demand remain, but dramatically shut down consumer access to goods and services.

All in all, this combination of conditions and tighter budget restrictions make consumers less able to spend and less likely to spend in contrast with previous recessions. Where are you going to find those? When do you keep them engaged?

How do businesses adjust?

It is evident in the COVID-deaccession is that this change in consumer behavior is moving businesses into a new “directional reality.” By adopting a more customer-centric approach, corporations need to respond to changing customer desires. They need to go to their customers, rather than expect their customers to come to them.

Past research shows that companies which sustain or accelerate customer-centric philosophies consistently outperform non-customer-centric companies. We potentially gain market share from rivals who are cutting back on customer-centered spending.

During this COVID-deaccession, it becomes much more important for businesses to become more customer-centric by studying and recognizing the new challenges of their customers caused by uncertainty, loneliness, physical distance, and financial constraints, and trying to organize their products in order to satisfy these new unmet needs.

The pace or rate of adaptation expected by businesses to respond to a new directional environment will depend on customer demand. Industries with declining consumer demand — offline entertainment, lodging, real estate, industrial goods, and other industries suppliers — need to rapidly adapt to give them a better chance of survival.

In comparison, industries with growing consumer demand — grocery stores, online entertainment, teleconference providers, and their suppliers — need to adapt to this spatial reality at a slower, but certainly required, rate to help sustain growth over the longer term.

If businesses undergo declines or demand rises, all companies and organizations need to take a step back or forward and question themselves: What will be my minimally viable plan to get through those extraordinary times?

What strategic truth will your business continue to pursue? 

We suggest an alternative to Ansoff’s (1965) growth strategy matrix to adjust to a modern customer-centered, directional reality (see table below). The proposed 2 x 2 matrix is defined by whether the company is competing with existing goods and services versus new or updated and whether it is operating in current or new markets.

O my friend — but it is too much for my strength — I sink under the weight of the splendor of these visions! A wonderful serenity has taken possession of my entire soul, like these sweet mornings of spring which I enjoy with my whole heart. I am alone, and feel the charm of existence in this spot, which was created for the bliss of souls like mine. I am so happy, my dear friend, so absorbed in the exquisite sense of mere tranquil existence, that I neglect my talents.

I should be incapable of drawing a single stroke at the present moment; and yet I feel that I never was a greater artist than now. When, while the lovely valley teems with vapor around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies.

then I feel the presence of the Almighty, who formed us in his own image, and the breath of that universal love which bears and sustains us, as it floats around us in an eternity of bliss; and then, my friend, when darkness overspreads my eyes, and heaven and earth seem to dwell in my soul and absorb its power, like the form of a beloved mistress, then I often think with longing, Oh, would I could describe these conceptions, could impress upon paper all that is living so full and warm within me.


What’s your price?

Is it worth the retailers to play with the “pay what you want” price? Shelle Santana explains how much, and why, customers will pay the interesting logic behind it. One finding: Sellers must dramatically change for what other customers are prepared to pay.

Santana found that by subtly influencing the atmosphere, sellers can drastically alter what certain customers are willing to pay, in a series of experiments — including a field experiment where she posed with students as snack bar employees.

Many businesses use the tactic as a campaign to attract new clients, often with a social tie-in as an additional incentive — for example , a restaurant runs a PWYW campaign and donates some of the proceeds to a charity to feed the hungry.

Nonetheless, all PWYW methods are produced equal. Santana analyzed data from a New York pet adoption service, discovering that patrons on average charged below the $150 adoption rate, some charging as much as $260. But the most common ticket price paid was a penny for a PWYW premiere of the documentary Freakonomics. “It got me wondering, why these cases are so different,” Santana says.

Borrowing from literature on social psychology, she conjectured it may have something to do with how the way consumers think about the transaction influences their actions.

Many people are “pro-social” when faced with a decision about how to distribute resources between themselves and others, meaning they are likely to seek an fair distribution of resources, while others are “pro-self,” meaning they are seeking to maximize value for themselves. She asked, will people with pro-social values pay more when presented with a PWYW situation?

Although previous research has shown that consumers are willing to pay more when a portion of the proceeds are donated to charity, research by Santana and Morwitz suggests that such a expensive tie-in may not be necessary.


The Goals and Go-To-Market Into One

Developing a plan is the easy part, in certain respects. The execution of the plan in line with strategic goals is where there is true management mastery. Why is it so critical that businesses are more closely linking their strategic priorities and their go-to-market strategies? How critical is it to its long-term sales growth?

For most companies, aligning field practices and go-to-market strategies with supported strategic priorities is the biggest, toughest, and increasingly costly aspect of executing strategy. This is the biggest because performing so well is important for success in the marketplace and is also necessary for business valuations and growth opportunities. A key to fulfilling the potential for growth is to reduce the gap between the big-picture plan and day-to-day field execution.

It’s also the toughest part of execution because you’re dealing with a mix of key business factors: market research, strategy growth, compensation, people management, creating a value culture, and maintaining that culture in the face of inevitable market shifts that are mostly beyond the selling company’s control.

It’s also the toughest part of execution as you’re dealing with a combination of key business factors: market analysis, growth strategies, rewards, people management, building a culture of value, and sustaining that culture in the face of unavoidable market changes that are often outside the control of the selling organization.

Therefore, for most companies, aligning strategy and sales is essential to long-term revenue growth, and weak alignment means both direct and opportunity cost to companies. Yet for owner-president, privately owned, and entrepreneurial companies this is particularly important.

They are often competing with bigger and better-resourced companies in their markets. They need to move faster and more coherently than big companies, and that means they must be better than big companies at aligning their strategic priorities and their go-to-market initiatives.

That may be unfair, but it’s not a level playing field out there. Doing this well is, or should be, an important component of competitive advantage for these firms.

Too many business executives use their profession as an excuse for not doing anything that would potentially boost implementation of plans and revenues. Knowing the business and their market dynamics is very critical. But industry is not destiny. As usual in business, the important levers in aligning strategy and sales are committed leadership and management behaviors. Our program is intended to help participants use these levers as productively as possible.


The Ferrari Tactic

The motor to purring. The leather is warm buttery. The curves are elegant. A Ferrari’s nature transcends every particular design feature to immerse its drivers in pure, unadulterated pleasure.

While other businesses speak about their products about building a consumer experience, Ferrari N.V. It’s one of the few brands that achieves it unequivocally — making the famous horse logo a synonym for luxury and excitement. Thomke, the professor of business management for William Barclay Harding, thinks of a student he taught in Dubai’s senior executive program at Harvard, who had the chance to test drive one of Ferrari ‘s vehicles.

Given its legendary success in defining its name, it is also a business that faces modern realities. Ferrari went public in 2015 after nearly 80 years of working as a privately held corporation (ticker mark RACE). Elsewhere, the automotive industry has gone through its biggest shifts in decades, with companies struggling to keep up with innovation — including electrification drivetrain, wireless networking, and self-driving technology.

Many of Ferrari’s rivals, including Porsche and Lamborghini, responded by introducing state-of-the-art innovations, increasing production, and venturing into untraditional models, such as sport utility vehicles (gasp!). So far, Ferrari has stayed true to its lesser legacy of frills, more enjoyable.

What he discovered is what he dubbed “The Ferrari Way” after the company’s chief test driver made an offhand remark. “I’m not sure what tools we ‘re going to use in the future,” the driver said. “But I do know that the Ferrari way can not deploy some new technology in our vehicle.”

In action, this means a careful balance of three elements: pleasure driving, performance and 

style. As the marketing head of the company said to Thomke, “We ‘re not the fastest or most comfortable car on the market but the perfect mix of the two, making us the most exciting. Our success definition requires satisfaction.

Although many sports car manufacturers are striving to make their cars as light as possible to help accelerate, Ferrari, for example, has no fear of sacrificing speed for a comfortable cockpit. “They ‘re prepared to put on a few extra pounds because the leather feels special,” Thomke says.

All of these factors have made Ferrari a hot commodity for buyers with a high net worth. Although rivals have expanded demand, Ferrari has purposely reduced supply to establish scarcity, which Thomke terms “deprivation marketing.” The company maintains waiting lists for the most sought-after models and rewards long-term loyal buyers with first chance to buy exclusive edition.

“The entire set of values breaks down if driving is no longer enjoyable, if it doesn’t look amazing, or if it doesn’t give you great results,” says Thomke. “Once the emotional feeling is gone, none of these other things matter.”