Valcon: Six ways to come out the crisis in stronger fashion

While the Covid-19 crisis is forcing (most) companies of all sizes to focus their efforts on staying afloat, the winners of tomorrow are more likely to be those that at the same time strategise how they can come out the crisis in stronger fashion.

Simon Bøge and Sina Gauss from Danish consultancy Valcon (a member of Cordence Worldwide) share six key principles how leaders can capitalise on commercial opportunities to improve their post-corona edge. 

Build a plan for where to defend and win

Keep focus on the customers and markets that are key to your business. Companies must make sure to identify the most critical customers and accounts and make all sales representatives aware of their mandate to support and defend them.

Look below the surface
In order to see opportunities in a crisis, companies must look beyond the surface of the average business performance to spot pockets of opportunity. Spending time e.g. analysing commercial data to spot changes in demand patters can be a good investment and give a head start in capturing the rebounding demand.

In times of crisis, one plan does not fit all, and companies should create different priorities and strategies for different parts of the business in the search for granular opportunities. A good example from the consumer goods business is the quick response from cosmetics companies in producing much needed hand sanitising. 

Build a plan
The best performing companies will be those that think ahead and identify and support existing and new growth pillars. Building a clear plan for capturing growth opportunities and anticipating when demand will rebound will make or break the chances to take market shares.

Stay close to your customers

Don’t push to sell but offer your support and sparring
Customers are still trying to handle the short-term perspectives of the crisis. In many businesses, attention is likely on how to manage a stalemate situation in the business’ operation and potentially a workforce working from home. 

Focus on offering support and services that help your common future business and consider offering these for free for your most critical customers. Ensuring ongoing contact is more important than minor fees at this point, and it will pay off in the long term when you are regarded as a trusted partner. 

Staying close to your customers will enable you to pick up early signals of demand or of new opportunities that will arise as the situation develops. 

Defend revenue, but don’t forget the long term 

Don’t just lower prices to defend volumes
Companies that know how to work around prices by e.g. offering other flexible terms will have a stronger position when the market rebounds. Consider other means as well: If your own balance sheet permits, use credit lines – that will be in much demand these days. 

Be clear on your pricing strategy
For key customers (that you know are loyal and with significant recurring revenues), you can benefit from working with more attractive prices in the short term but be clear about potentially returning to normal prices in the long term. Customers will respond better to your price moves (both down and up) if they understand your rationale. 

Moreover, the sales organisation can more easily manage the price strategy, when customers are aware of the plan and conditions. 

Prepare for a fierce commercial battle 

Prepare your commercial activities for when the market rebounds
Focus and preparation will get you a head start. Organising communication, marketing efforts, campaigns and potential product and service introductions at an early stage is time well spent, and can buy you valuable time in a rebound.

Companies that plan according to the anticipated rebound and leverage insights gained through customer contacts may enjoy first-mover advantages once the market is back and take market shares as a result. It is also key to ensure that you have sufficient data insight to base your decisions on. The more uncertain the market movements are, the more essential is your company’s ability to leverage data to predict changes in demand. 

Ensure your channel readiness

Crises are likely to affect customer sentiment and preferences for conducting business. The best performing companies are those that make appropriate preparations and ensure readiness of their channels for when they expect demand to pick up.

Boost digital channels: A key consideration for companies should be to boost e-commerce activities. As an example, a large international chemicals company has taken initiative to offer discounts to customers on orders placed and completed on their B2B e-commerce platform, strengthening short-term sales where possible and enabling a strong e-commerce business for the long term.

• A strong focus on gaining shares in e-commerce now will pay off, not only in the short term, but also in the future when not-in-person channels may be a better fit with customer preferences and macro circumstances
• Getting customers on e-commerce now will also tie them to the company in the future, as reordering and delivery monitoring become increasingly easy
• Digital or automated channels will also benefit the company in the future, as it may lower the cost to serve/sell and thus offer improved return on sales for the company in the long term

Companies often offer discount on e-commerce orders compared with in-person orders to drive this onboarding process as a means to accelerate the virtual customer base and loyalty. 

Prepare to transform

Although many things can be done in the medium term, companies must also begin to consider how to structure their commercial and sales operations in the new market landscape of a recession. 

Stay fit for purpose in recession
Companies can benefit from considering how to restructure or even transform their commercial organisation to fit with a potential recession period on the tail end of the crisis. Increased use of e-commerce and leveraging distributors or alternative channels as a way to reduce cost to sell may have changed the effectiveness of their commercial set-up, which needs to be reviewed or trimmed to fit the long-term purpose.

For instance, as seen in China in the wake of the 2002-2003 SARS crisis, many Chinese companies transformed their go-to-market models towards much more online business rather than traditional in-person sales channels.