Growth Hack

Eighth #GROWTHHACKS TO IMPROVE YOUR PROFIT MARGINS IN A TOUGH MARKET CONDITIONS

Get your business ready for recovery using some of these practical hacks that will not just grow your business but also ensure profitability. 

Covid is an inflection point that has reset several norms as we realize that we’re never going to go back to working the way that we did. All industries are at the mercy of an invisible, uncontrollable enemy that has impacted everything from consumer interest to consumption patterns and the ability of the business to cater to this unprecedented change. Your business may have been upended by this disruption too, that has changed the market dynamics overnight.

To stay afloat & remain relevant to your customers & shareholders, it is important to start getting your organisation ready for recovery & make the change your business needs today.

To manage your way through this, here are eight very practical & powerful #hacks to make sure that when the world returns to normalcy, you are there all prepped to ride the wave.

HACK #1:  PLAN FOR BUSINESS RECOVERY USING A BARBELL STRATEGY

Like rabbits that sense an earthquake and start running helter skelter, businesses face the same imminent danger of falling in trap of flawed short-termism in their bid for immediate survival. The main source of the problem is the pressure on companies to get the business back on its feet through a combination of tactics, incentives & cost-cuts.

While well-intentioned, these efforts fail to recognise the hidden opportunities that pandemics of this scale & magnitude have the potential to unlock.

To balance the quarterly capitalism with long term value creation, leaders should skilfully balance the immediate survival actions with the new strategic choices by allocating equal time, resources & actions to score at both ends of the Barbell. 

#Plan for business recovery using the ‘Barbell Strategy’ balancing the immediate survival & the gradual transformation & foster innovativeness.

#Mobilize a War Room with combat warriors on one end & an Innovation Garage with dreamers on the other

HACK #2 STOP CHASING THE LONG TAIL

Long tails thrive on the economics of abundance when everything is available to everyone. Nothing could be further from the truth in the post Covid world

To provide for small, niche offerings that customers expect, requires dozens of facilities stocking tens of thousands of items with intermittent demand that suck away valuable company resources. It is therefore, vital for leaders to understand the profitability of the segment because the extremely low demand for the large array of products in the tail means that simply recovering the costs of producing them is challenging. 

So, it is prudent to trim the long tail of fringe sales with limited demand & and focus on the core, high value, evergreen offerings.

#Get to the ‘head’ of the demand curve by concentrating on popular & hit products

#Cut the complexity & hidden costs of SKU proliferation in distribution & inventory supply

HACK #3 SOCIAL PROOF YOUR BUSINESS

Unpredictability & ambiguity is the fuel that activates and feeds the process of social proof. When faced with an unfamiliar situation, an unsure individual would feel the need to refer to other people for guidance. 

So, expect a more guarded & self-protected society to approach the marketplace with a lot of diffidence & anxiety. Consumers will seek reassurance from the action of others leading to a rise in herd mentality. 

Social proofing is a very powerful weapon of persuasion and influence that uses the power of numbers to help businesses win back the consumer trust. Use it wisely.

#Win back consumer confidence with the wisdom of the crowd & the power of numbers

#Weave in authentic stories, real time reviews & feedback loops in every customer transaction.

HACK#4: MOVE YOUR SUPPLY CHAINS FROM PART-TIME USE, FULL-TIME COST TO FULL-TIME USE, FULL TIME VALUE.

Success of business today is inextricably linked to the performance of supply chains

Multi-channel distribution eco-system, ‘just-in-time’ delivery & long tail SKUs have resulted in highly complex but in-efficient supply chains. Consumers have never been more demanding in terms of immediacy & level of personalization they expect. 

The current supply chain components for most businesses are rigid & built for exclusive in-house use with limited agility to adapt to external demand volatility. Additionally, the physical supply-chain processes such as warehousing & transportation are often not fast or flexible enough to cope with the large numbers of smaller orders that Omni-channel requires. 

#Create greater flexibility across the supply chain by making planning, manufacturing, distribution, and logistics more adaptive with the use of design thinking & technology that enables visibility & ensures agility of inventory flow through the supply chain at any given point in time.

#Create multi-purpose supply chains with flexibility of a plug & play model to outsource, in-source, part-source components to ease out redundancies and extract full value of each supply chain component.

HACK #5: PROMOTE FRANCHISEE STORES, RESTRAIN COMPANY OWNED STORES.

Historical evidence proves that franchisees perform far better than company stores during crisis.  They have a greater perseverance to ride out the storm as they are far more invested in the business, sometimes with their lives’ savings. With increased commitment & reduced capital outflow, organizations should bet on supporting franchisees to hasten their recovery.

#Franchisees are smart entrepreneurs with better survival instincts.

#They are tenacious & have better tolerance of ambiguity.

#Have the power of the brand & shared resources of built-in systems, technology, training & marketing support to sustain through difficult times

HACK#6: TREAT EVERY CONSUMER LIKE CUSTOMER

The words “customer” and “consumers” are often interchangeably used and are easily confused with one another. Agreed, that the customer & consumer can be the same but at a time like this, it’s the mind-set that delineates the two clearly. 

The typical consumer, devoured by endless abundance of everything & swayed by marketing pressures will be replaced by an exacting customer judiciously assessing every rupee spent. These customers are extremely likely to bypass a brand if they sense they are being manipulated or bamboozled in any way. 

#The stereotypical hedonistic consumer fostered by artificially induced wants without regard for the consequences will be replaced by the conscientious customers leaning towards brands that do the right thing.

#With reduced purchasing power, they will shift spends towards meaningful consumptions as against mindless consumption & grant their approval to products & services that offer ‘better’ instead of ‘more’

HACK#7: THINK IN PARTS to SOLVE FOR THE WHOLE

Highly uncertain conditions call for decentralized but mutually synchronized small actions that impact the overall solution. 

When change is unpredictable & rapid, innovating by breaking things down will make sure you innovate without the risk of big losses. It allows for quick adaptation to changing circumstances.

#Bury the grand strategy & foster small scale modular thinking.

#In a networked economy, big solutions can be found by solving a series of small inter-connected problems.

#With the rapid & unpredictable nature of change, ‘incrementalism’ is a safer bet. 

HACK #8:  FIND YOUR HEADROOM FOR GROWTH

In difficult times, companies instinctively unleash a flurry of new activity, often overlooking the growth opportunities that are right in front of them. In their hurry to make up for lost time & see quick results, they get easily tempted by tactical opportunities or get lured by the idea of diversification without a clear sense of where the true opportunity for #growth exists. That can prove costly, perhaps with disastrous consequences, at a time when resources are scarce & getting the highest yield on these resources is paramount.

To avoid falling in that trap, it is important to play to your strengths & unlock #in-market potential from the ‘existing’ by understanding where your real #headroom lies.

High Value, low headroom HARD CORE LOYALS Belong to you	High Value, high headroom    SPLIT LOYALS Belong to a few
Low value, low headroom POLYGAMOUS LOYALS Belong to many	Low value, high headroom COMPETITION LOYALS Belong to competition

#Nurture your ‘loyalists’.

#Ignore the ‘competition loyals’.

#Lure the ‘split loyals’ with tangible propositions.

#Park the ‘polygamous loyals’ in the queue for better times.

An era of consumer frugality has begun with headwinds that will repress the business by at least a year if not more. Some leaders will turn this into an opportunity to strengthen their business to emerge stronger, leaner & fitter. These leaders are bold innovators who believe in capturing opportunities whenever they arise, from whatever direction—and allow their flows to propel them onward, even if the ultimate destination is uncertain or the route shifts along the way. 

Follow the hacks in this article & you could be one of them!

Sensing, shaping& storming the business norms: Tagline

AUTHOR: 

ANISHA MOTWANI

Innovation & Brand Expert, Author: STORM THE NORM