3 business strategies to help companies move forward in 2021
from Adam | October 28, 2020
When Covid-19 hit, companies had to react quickly and with foresight. Immediate consideration dominated the decision-making process. This reactive stance must change for 2021.
Organizations need to focus on creating conscious, yet flexible, long-term plans. Here are three strategies that will help companies go on the offensive in 2021:
- Treat cash flow like a cone
The lack of cash flow is one of the main reasons for businesses to close. Under normal circumstances, only half of all businesses last five years or more. The past year resulted in a much higher closure. In 2021, cash flow management will be of vital importance.
Be sure to cut costs where it makes sense. If you use less office space, you should end your lease to save on rent and ancillary costs. Close unneeded cell phone accounts. You can benefit from joining a group buying organization to take advantage of discounts on the office supplies you still need.
Companies should also cut down on subscription services. Order fewer magazines and other publications or only get online access. Terminate memberships that do not actively increase sales and earnings.
On the revenue side, look for easy ways to increase sales. Online retailers should track abandoned carts to encourage customers to return and complete their purchase. Social media offers numerous possibilities for this.
When you’re dealing with a distracted shopper, a Facebook ad with a helpful infographic, useful tips, or even a joke can be enough to push them back into the cart. If the buyer seems to be suffering from sticker shock, sending a coupon code can get them across the line. To keep customers from throwing something back to make up for shipping costs, a flash mail order sale could both seal the deal and increase your average order value.
Finally, analyze the sales of all your products and services. Apply the Pareto principle back and forth: drop your bottom 20% of performers and focus on your top 20% of sales.
- Stay on course for advertising and marketing
Executives often see marketing as a cost center. And when recessions occur, marketing budgets are cut.
Previous recessions show that this is counterproductive. Brands that continue (or expand) their marketing perform better.
For example, before the Great Depression, Post was the leading dry grain company. But when the Depression hit, marketing budgets were cut. In contrast, Kellogg’s increased its marketing budget and launched a new product, Rice Krispies. The company’s profit rose 30% and took the leading position in the dry grain market.
This pattern plays out over and over again. For example, researchers have studied the effects of advertising during the 1981-82 recession and recovery. They found that in 1985 the sales of companies aggressively marketed by the downturn had increased 256%.
The conclusion couldn’t be clearer: if you are sticking with or even intensifying your marketing efforts during a downturn, this is the way to go. It is important to continue with email campaigns and social media activities to stay connected with customers and the community.
Given the current crisis, consumers want to hear how brands are helping in daily life (77%) and how they are responding to the pandemic (75%). 70 percent of consumers want brands to be a soothing voice. Social media is the ideal platform to tell your brand’s coronavirus story and comfort your audience.
Here’s why it’s worth the effort: Brands that continue to market through recessions increase their visibility when competitors quit. It is estimated that brands that stop marketing now have seen a 39% drop in brand awareness after the Covid-19 leak. It proves the old maxim: “Out of sight, out of your head.”
- Rethink your HR programs
It’s no secret that the pandemic has turned the US economy on its head. A job market with record low unemployment turned into a landscape of layoffs and vacations.
While Covid-19 may have dampened rising wages, work remains a company’s greatest expense – and its most valuable asset. This is not the time to neglect your employees. Therefore, work on improving your HR programs in the following areas.
- Remote, hybrid and on-premises work
When the coronavirus hit, many office workers switched to remote working overnight. While a recent Gallup survey found that 33% of US employees “always” work remotely (up from 51% in April), another 25% “sometimes” do so.
It is clear that remote working will remain in some form for the foreseeable future. Many companies will work from home permanently while others will develop hybrid models. Some companies have switched to remote working temporarily but plan to return to the office as soon as it is safe to do so.
By 2021, consider how to proceed and update your written guidelines accordingly. If you plan to return to work on site, review and implement the long-term health and safety guidelines. Use your social media to keep both your internal and external audiences informed of the steps you’ve taken.
Companies with employees in the workplace need to establish safe social distancing practices. Desks should be at least 6 feet apart and plastic barriers should be installed to separate customer service representatives from customers. Make the wearing of masks mandatory and instruct staff to call in sick (or send them home) if they show symptoms.
Social distancing won’t be permanent, but everyone will be more aware of how contagious diseases like the flu and the common cold spread. Now is the time to update the guidelines for dealing with communicable diseases in the workplace.
The pandemic has been a stressful time for employees, and the lack of personal camaraderie in the workplace made matters worse. To maintain your team’s morale, you should publicly acknowledge high achievers. LinkedIn is a great platform for this, but Facebook, Twitter, and Instagram also work.
Posting awards on social media empowers your employees and strengthens your company’s brand. Employees love to share such posts with their network, which further increases your reach on social media.
- Inclusion, diversity and equity
Not long after the Covid-19 hit, the deaths of George Floyd, Breonna Taylor and others forced a national race bill. With racism and discrimination dominating public awareness, many employers are reviewing their inclusion, diversity and justice programs. Likewise, many companies pay attention to the diversity of their workforce and their management level in order to identify gaps.
According to the Society for Human Resource Management, 35% of black workers report being discriminated against in the workplace. While a fifth (21%) of all HR professionals admit to seeing discrimination in the workplace, that number rises to 49% for black HR professionals.
To address this issue, companies need to evaluate their workplace and recruitment practices, talent development programs, and promotion opportunities. Most people look at racial and gender diversity first. However, discrimination awareness and training should also include age, disability, cultural and LGBTQ status.
Use your social media to highlight your efforts beyond supporting racial justice companies. Introduce different employees, call minority-led business partners, and write down any financial contributions you make to organizations that promote racial equality.
There is uncertainty during a “normal” recession and that is undoubtedly the case during the pandemic. Over the past year, companies have had to make critical decisions to respond to immediate needs based on incomplete forecasts.
Refocusing on the future will be crucial for 2021. It is time to create long-term plans that are flexible enough to both accommodate changing public health issues and help advance recovery.