Boomer Opinion: How to stay in business
What are the keys for baby boomers who need to stay in business after the crisis ends, and need to get their customers back to pull it off? Chicago’s Howard Tullman is executive director of the Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship at the Illinois Institute of Technology, because he has been a leader in the field himself. What he says in this Boomer Opinion piece today is, if you want stay in business, you’ve got to give people a reason to trust what you do.
I hope I’m wrong, but I don’t expect most of the newer and smaller businesses across the country to bounce back any time soon. While the stock market may respond in fits and spurts to the bogus improvement claims of the Cheerleader in Chief (which is the only way he knows how to keep score) and the Chinese continue to lie about improvement in Wuhan, we need to take a much harder look at where things will stand for the next many months.
Howard Tullman
Anyone with half a brain knows that we won’t know much of anything definitive until the true levels of testing across the nation expand dramatically (that’s one chart certainly worth watching). Even the best-case scenarios foretell months of continuing deaths and pain and offer little solace even as the curve allegedly flattens. Those of us who keep score by concrete and realistic measures, and who are surrounded by sad stories of worsening economic distress and insurmountable losses, aren’t expecting any miracles any time soon. Nor are we anticipating that the economy, particularly on Main Street, will miraculously “snap back.” The dramas and delusions in the nation’s capital don’t put chickens in the pot, food on the table, or people back on the payroll.
Businesses won’t be bouncing back because their customers won’t be in any hurry to come back, for a variety of reasons. If you’re thinking we have six weeks or so to go, you’re dreaming. I’d bet on a minimum of six months after the major lockdowns are largely lifted, during which time business revenues will average 50% or less of what they were once expected to be. Next year might be better. Talking about bursts and bonanzas is foolish. If you’re planning realistically, you want to be thinking baby steps at best in terms of customers coming back. No businesses will escape the blast range or serious collateral damage.
So, what are you supposed to do about your workforce if your business is cut in half and pretty much all your other overhead and expenses are fixed? That’s the critical question. How close to the bone and how soon do you make the critical cuts? Cut too little or wait too long and you’ve committed the cardinal sin of business: you run out of cash and runway and it’s game over. Cut too deep and you may not have the team and the talent that it’s going to take to rebuild in the future when the going in every respect is going to be much tougher. And, most critically of all, who and where do you cut?
There’s obviously no simple answer and the right results will depend on the nature of your business, but my sense is that, in making these hard calls and tough choices, we are overlooking an essential part of the puzzle: which of the employees are the ones who are most essential to encouraging the customers to come back? We’re preserving layers of management (since they’re making the cuts) and tons of techies, but we’re cutting the front-line troops in customer sales, support, and service who actually have the closest connections to the customers and the best feel by far for the playing field. Connection and comfort are the keys to customers coming back.
Remember: only satisfied customers provide your people with job security.
So, what factors are most likely to make customers hesitate and wait to return?
(1) Their own job security.
Everyone who still has a job is spending a little time looking over their own shoulders. Whatever product or service you’ve been selling is gonna be far harder to push to a population likely to be confronted by levels of unemployment and homelessness that we’ve never seen before. New subscriptions and other commitments, high-ticket items, and discretionary “nice to have” purchases are likely, at a minimum, to be deferred. The carnage in new car sales will be the worst ever in terms of downturns.
Everyone who still has a job is spending a little time looking over their own shoulders. Whatever product or service you’ve been selling is gonna be far harder to push to a population likely to be confronted by levels of unemployment and homelessness that we’ve never seen before. New subscriptions and other commitments, high-ticket items, and discretionary “nice to have” purchases are likely, at a minimum, to be deferred. The carnage in new car sales will be the worst ever in terms of downturns.
(2) Behavioral changes that are likely to be irreversible.
Amazon and other online shopping and delivery solutions, which continue to intelligently organize and automate the replenishment process for almost every staple in our homes, are going to continue to crush the neighborhood grocery stores and other Mom-and-Pop businesses. It’s happening right before our eyes. Millions of these little stores won’t ever be back.
Amazon and other online shopping and delivery solutions, which continue to intelligently organize and automate the replenishment process for almost every staple in our homes, are going to continue to crush the neighborhood grocery stores and other Mom-and-Pop businesses. It’s happening right before our eyes. Millions of these little stores won’t ever be back.
(3) Concerns about the vendor’s own longevity and finances.
Especially with regard to costly durable goods and new technologies, consumers want to be assured that their sellers are stable, secure, and likely to be there for the long run to stand behind and service their products. As more companies implode, consumer confidence, which is the mother’s milk of commerce, is likely to plummet as well.
Especially with regard to costly durable goods and new technologies, consumers want to be assured that their sellers are stable, secure, and likely to be there for the long run to stand behind and service their products. As more companies implode, consumer confidence, which is the mother’s milk of commerce, is likely to plummet as well.
Every customer will be increasingly risk averse, looking before they leap, asking if they need to do anything quite yet, trying to get by with what they have, and stuck in the mud of FUD. Fear, Uncertainty and Doubt.
How do you fight FUD? Trust, honesty, and empathy. And who can deliver the goods most effectively for you? It’s your front-line folks who can connect to, identify with, and provide the kinds of comfort and familiarity that wary consumers are looking for in these troubled times— especially when these modest virtues have almost entirely disappeared in the DC swamp.
They can do it today because it’s exactly what they’ve been doing every day to date and they’re a key component of whatever success your business has had so far. So as you make those critical changes, be careful and choosy that in saving a few incremental dollars, you’re not tossing out the baby with the bathwater.
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Howard is author and co-author of several books, including his newest, “You Can’t Win a Race With Your Mouth: And 299 Other Expert Tips from a Lifelong Entrepreneur
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