By Per Sjofors
Adapt or…Adapt or… https://c-suitenetwork.com/advisors/wp-content/themes/csadvisore/images/empty/thumbnail.jpg 150 150 psjofors https://secure.gravatar.com/avatar/c8ba0a761275618a680afe0ca517fd11?s=96&d=mm&r=g
Charles Darwin famously got the inspiration to formulate his theory of evolution, or survival of the fittest, from observations of the beaks of different species of finches on the Galapagos Islands during his voyage around the world in 1831–1836.
Darwin wondered why the shape of birds’ beaks differed from island to island. Cactus finches have longer, more pointed beaks than their relatives, the ground finches. Beaks of warbler finches are thinner and more pointed than both. These adaptations make them more inclined to survive on the food sources that differ from island to island. Adaptation is just as crucial for any business. Just like Darwin’s finches, the ability to adapt to differences in food sources, in a business sense, meaning to optimize revenue from your customers, may mean the difference between life or death for your business.
I’m writing this during the Christmas holidays 2020. We all know that the pandemic has forced a series of changes for a lot of businesses. We also know some companies that are doing really well while others have succumbed to the Coronavirus’s specific challenges.
Let me give you a short example of adaptation and another showing what could happen if you do not adapt. The restaurant industry has, of course, been really hard hit by the pandemic.
Just across the road from where I live is a woman who owns a small chain of pizzerias. She acted quickly on the change in circumstances and pivoted her business to delivery and pick-up only. But instead of contracting with one or several of the food delivery services that charge the restaurant both fees and take commissions on sales, she offered some of her waiting staff jobs as delivery drivers. So they deliver pizza to a home instead of to a table in the pizzeria. By doing this, she could retain some staff and drive up more sales. Business is better than ever because she adapted to her new circumstance.
I’m also acquainted with another restaurant owner who did not adapt to the change of circumstance and instead closed and now asks people to donate money so that they can eventually open again. The restaurant does not even offer those who donate anything for their donated money, like a discount coupon that can be used once they can open again. Which I very much doubt they will. They provided no incentive to potential donators, which makes for bad business practice.
We also hope, me especially, that a COVID vaccine distributed to the general population will get us back to a new normal as these effects are seen throughout the populace. The keyword here is “new”; it will not be normal as before the pandemic. Too much has changed for that to happen. Many of your customers have different buying habits now, and what they valued before the pandemic will have differed from while it’s still going on. So how are you going to find out what the new normal means for you? Because I hope you intend to find out. If you believe that everything will continue to work just like before the pandemic began, you are greatly mistaken. Once we enter this “new normal,” if your competitors get a better understanding of the changed decision landscape, the decision behavior, the customer preferences, and your customers’ value perceptions, your company will not survive. Or at least struggle at best.
So what is the best practice to find out about the changes that have happened in your marketplace? Well, here is what I would like to suggest to you:
- Of course, you need to talk to your prior customers and from them try to understand how their preferences, decision behavior, decision landscape, and value perceptions have changed. But there is a flaw here; not all your prior customers will be truthful. They may well withhold information or sometimes even outright lie because they want a better deal from you when purchasing from you again—more for the same money or lower prices. So take what you hear with a healthy pinch of salt.
- You need to do market research into your market. A vital component of that market research is understanding how the monetized value perceptions or willingness to pay have changed. How different features and functions of your product or service affects what potential buyers are willing to pay. How various preferences and value perceptions will affect your sales volume at different prices.
- Then you also have to do research into your own company. You have to understand the differences (and there will be many) between what you hear from the market and how your staff, especially customer-facing staff, perceives the market’s new value perceptions and preferences.
- Finally, you have to develop and deliver a training program for the staff, so they truly understand the market. So they can act on the new circumstances. To ensure the company adapts and does not continue to do what worked well in the past because it’s highly unlikely to work as well now.
An involved process. Yes, for sure. But as we come out of the pandemic, your business success will depend on it. And you probably want to be a winner, at the top of your game, not leaving it for your competition to do better than you do! Are you ready to start the process of adapting your business to meet the new challenges that it faces at present?
Sjöfors & Partners