How businesses have and are behaving during lockdown is likely to have an impact on their road to recovery. Whilst business leaders were understandably quick to respond to the introduction of lockdown, their approach to managing businesses in lockdown has been wide ranging. Whether intentionally or unintentionally, the actions taken by businesses in terms of managing their staff, supporting customers and dealing with the challenges presented by COVID-19 is likely to affect more than the bottom line.
In the majority of cases businesses have experienced a significant drop in turnover, and for some there has been, hopefully only temporary, a loss of all revenue. As such, when looking to open up again, one of the key challenges will be re-engaging with customers. Herein lies the rub and the big question: do customers want to re-engage with you or have they gone or are thinking of going elsewhere?
It would seem that how you have managed customer relationships and communication with them will have a significant impact on how they re-engage post lockdown. It would seem that businesses that have endeavoured to keep in touch will fare better than those that haven’t. This might be thought of as your reputation value. Certainly, being out of sight is giving rise to out of mind, with customers feeling less connected and at risk of seeking alternative providers and supply.
Whilst it might not have been easy to adapt your business model to continue to trade, those businesses that have been able to do so seem better placed for retaining customers, even gaining new ones. Approaches such as restaurants offering takeaways and garden centres offering home deliveries, through to developing an e-commerce provision, more favourable payment terms or just providing advice and support have been well received by customers affected by the current situation.
Perhaps the greatest positive impact on customers has been how businesses have responded to and contributed to the challenges faced by COVID-19. Examples of this range from fund raising to help frontline workers and switching to making PPE to developing new digital or technology applications to help with the situation – these are all being well received not just by business stakeholders but the also the wider community.
Understandably, all businesses have had to take a long hard look at their finances. Survival invariably has and will depend on the availability of funding and being able to manage costs for what seems to be an indeterminable period of time. For most, balancing the books has involved a mix of looking after the livelihoods of employees and as well as safeguarding the life of the business, a move which has certainly hit the bottom line. This is recognised not just by employees but also customers alike, with those businesses earning more kudos and respect putting the situation over and above profit.
In a world that is so well connected, the business of every business seems to be the business of not just the stakeholders but the wider public. Social media coverage is hard to manage, with news and opinion spreading widely and quickly. Perhaps one of the key influences has been how employers have treated and supported their staff during the crisis. Those who have been able to and have gone the extra mile to support their staff seem to have weathered the storm better than those who might not have done. Whether it is financial support, changes to working patterns, the provision of equipment to enable working from home, or just simply keeping in touch, all impact on the loyalty and resilience of your staff and also the viewpoints and perception of your customers.
We are more likely than not to face more challenges ahead as we transition through lockdown to recovery. The challenge for business leaders and their teams is to consider the much wider implications of their actions on their business as they respond to the difficulties and opportunities presented by the current situation and what is being described as the ‘new normal’.
James Pinchbeck is Partner at Streets Chartered Accountants, a top 40 UK accountancy practice. James, as a specialist in marketing professional services, is responsible for the development and implementation of the firm's strategic marketing as well as its engagement in the community it which it works and serves. His role allows him to capitalise on his broad interest in the national and local economy as well as his passion for enterprise. As part of his wider interest in enterprise, marketing and education, James is a board member of NBV – the East Midlands Enterprise Agency, an FE College Governor and a board member of the University of Lincoln’s Business School. He is also an Institute of Director’s past Branch Chairman.