If you are a CEO or owner of a small business or mid-size enterprise (SME or SMB), you are among the millions “fire fighting” to keep your business afloat due to COVID. Finding ways to retain customers and staff, as well as ensure enough cash flow to continue operating fills every waking moment.
Digitalizing your business couldn’t be further from your mind right now. Yet, a digital-first mindset may well be the leverage you need to push for a comeback.
The Critical State of B2B SMEs
There will always be winners and losers in every crisis, but the COVID shutdown has particularly been lethal for small to mid-size businesses or enterprises (SMBs or SMEs) in the B2B sectors. It has also shown up stark and uneven vulnerabilities among those not able to leverage digital technologies quickly enough.
Digital transformation has been bandied about for a long while now, and some companies have made strides, including tech-oriented SMEs. But for their non-technology counterparts, the call for digitalizing operations has largely fallen on deaf ears.
A 2019 SME survey on Going Digital of five European countries showed that two-thirds of SME bosses did not consider digitalization a top priority.
This sorry state of affairs is now seeing repercussions, and it is due to one thing and one thing only: the lack of a digital-first mindset. I may be simplifying but if you see what’s going on in this shutdown, it boils down to that.
Hopefully, the crisis has led to a re-think of strategic priorities for B2B SMEs and their bosses.
The “Digital Zootopia” of B2B SMEs
Several countries are planning to lift the lockdown in different stages and with different measures in place over the next few weeks.
However, if there’s one thing we can be certain of is that the world, which greets us out of confinement, will be very unlike the one we remembered “leaving”. Customers will be extremely prudent, buying only what they need to run and generate income immediately. Markets will have shrunk drastically, all except those dealing with the essentials of COVID and its fallout or longer-term projects.
In this climate, B2B SMEs will need to be even more creative, agile and resilient to mitigate the volatility of an accordion-like economy. Whatever strategy being formulated will need to allow for fast or innovative pivots, not only to sustain through the COVID fallout, but also to prep for a brighter future beyond.
One major leverage for a resilient and agile strategy is to go digital. For this to happen, SME leaders must, first and foremost, debunk unrealistic hang-ups and long held limiting beliefs. Then, carving out a solid digital-first strategy that works to their context will be a critical step forward.
There are generally three categories of such SME bosses: digital ostriches, digital moles and digital lemmings.
Digital Ostriches bury their head in the sand, refusing to face up to the realities of a digital economy. They fear technology and what they believe to be negative implications such as killing precious jobs. But what they fear most is seeing the business they understand radically change into one they don’t and cannot control. The COVID economic contraction may finally force their heads out of the sand.
Digital Moles are somewhat similar but unlike Digital Ostriches, they only see things they want to. Trapped in a tunnel vision, they decide digital is just “much ado about nothing”. Their customers are happy; their businesses are stable and growing; why bother rocking the boat at all; but that was before. The funny thing with change is that it’s always a lot more disruptive and costly when it’s imposed rather than embraced.
Digital Lemmings on the other hand, are switched on. They know digitalizing will make them more competitive, especially for export. The same European survey reported that 60% of SMEs had already started on some digitalization. However, their challenge ranges from inadequate capacity or skills to competing resources, or worse – an inappropriate strategy. Their good intentions get waylaid as implementation starts and stops, is incremental at best and never quite achieves full potential.
Turning the situation around will depend on the extent these bosses will galvanize into taking back control to build resilience into their survival and recovery strategy.
If you are among them, you will want to get strategic support from outside experts. Having worked with startup and SME leaders, believe me when I say it is not easy to do this by yourself. You may feel lonely bearing the heavy burden of your company and the people who count on you, but you don’t have to be alone in finding the right solution for a comeback.
Often enough, critical change is propelled by a sense of urgency and an external trigger. The COVID pandemic serves its purpose on these two counts. But the only way to counter its negativity is to regain real control with self-empowered positive triggers.
If you are with me so far, read on.
Disrupt Yourself as CEO
Ironically enough, a digital-first mindset is really about customer-first continuity.
Digitalizing is the only sure way to continue operating and delivering value in a volatile market. With well-coordinated digital processes, your company’s resilience and agility to engage and retain customers, acquire new ones and expand market horizons in this new normal will grow in leaps and bounds.
This starts with thinking “customer”.
Most of you will say that you already do, and it’s true. It’s very rare that SMEs don’t put their customers first. It’s usually their biggest strength and value as compared to big business.
However, what I’m alluding to is the understanding of how customers have evolved in their behaviors, habits and expectations. They are digitally savvy and increasingly digital-first as consumers and even business buyers.
In a Salesforce report, B2B buyers (80%) were found to be a lot more demanding of prompt responses and real-time interactions from the vendor than consumers (64%). In social isolation, this will be the case even more with prolonged online connectivity.
The same report also revealed that 82% of business buyers seek the same buying experience they get as a consumer. 69% want Amazon-like purchase experience. Yet only 15% of SMEs sell online while less than 30% of B2B buyers say they get excellent customer experience (CX).
Overall, more than 75% of customers expect companies to anticipate their needs. This is easily one of the most important things to note if we consider that 80% of buying decisions are made way before the first sales contact is made.
On top of that, with B2B buying, its often a longer decision-making process that typically involves engaging and convincing three to seven key stakeholders at least. So they all have to be taken into consideration when creating customer touch points.
Therefore, the post-COVID SME comeback requires a different kind of CEO – one who stands for Customer Excellence Officer.
This is a chance to re-think your role and disrupt yourself as a business owner or shareholder CEO. Re-invent yourself into a digital-first CEO – i.e. a Customer Excellence Officer who drives customer experience (CX) optimization.
What will you do then? Where to begin? The answer really depends on what you want to achieve in the next 6-12 months, where your company stands and how adaptable your business can be.
Looking at 5 strategic axis will help inform your comeback strategy as a digital-first CEO.
5 Axis for A Digital-first CEO Strategy
1. Digitize Your Customer Intelligence
The more you know your customers, the more effective your digital-first strategy will be. How is your customer data gathered, stored and shared? Does it help answer these questions and more?
What is the portion of your loyal and recurrent customer base and who are they?
How do they buy and how much do they spend?
What keeps them coming back for more and why?
What is your portion of new or one-time customers and who are they?
If your product line were not to exist, who would they buy from and where?
More often than I care to see are SME bosses who keep all their customer contacts in an excel sheet on their desktop or a company server while most of the intelligence is stored in their heads.
If this describes you, don’t try to do a database input right now of everything and anything from different sources unless you can afford the time or resource.
The quickest way around is to start with important information you can enter of your top recurrent customers for a particular sector or geography. Start shopping for a reliable and user-friendly CRM to pilot and input this first base. Then work from there to the next segment of customers.
If you don’t have the information on hand, it is the perfect time to reach out and re-engage with them. Due to social isolation, most will respond back promptly, especially if you offer something of value at the same time.
2. Digitalize Your Products and Services
If you are selling all your products and services the traditional way offline, it’s time to think of a new product you can offer to sell online. You don't have to come up with a new product from scratch.
The quickest way is to identify what part of your product portfolio can you re-adapt, tweak, convert and re-package without too much effort and spend. The objective is to reach new customer or market segments online, especially those in need of post-COVID essentials. Brainstorm a whole list of what these might be and see what you can offer.
If that is not feasible, what complementary product or service can you come up with to upsell to existing or loyal customers? Imagine a subscription-based offer that will generate recurrent income. You typically stand to gain between 60-80% in revenues from repeat customers.
For an electronic parts manufacturer, perhaps it’s a repair and maintenance service subscription in which you also offer online training and tutorials. If you are a logistics company, it could be subscription for instant online scheduling, booking, consultation and matching with available drivers and assets.
If you already sell a portion of your products and services online, what are some ideas to increase that portion to maintain and get new customers immediately?
3. Digitalize Your Front End CX
No doubt you already have a company website but ask yourself, what does it serve? How does it monitor, measure and capture website visits and visitor information? How does it feed your sales pipeline? If you can’t really answer in specifics, it probably means you have an online display but little else.
With so many competitive, cost-effective and user-friendly digital tools available today, it's not that complicated to turn that website into a dynamic market-driven platform in little time.
The ultimate goal here is to build a virtual "shop front" for your company. It should allow you to accomplish more or less the same results as a brick and mortar operation. Reaching new prospects, serving and delighting your customers, and ensuring transactions and fulfillment across physical and cyber worlds should eventually be seamless and transparent.
Getting there will certainly be a longer journey into digital transformation but imagining it from the beginning is important to build out your roadmap and milestones.
For the immediate comeback, the most important thing you’ll want is to have the ability to attract and capture new visitors as well as potential customers, efficiently and effectively. If done right, it will serve as a filtering mechanism to draw in qualified leads.
For this to happen, your customer and product segmentation has to be laser sharp. This is where the customer understanding from point 1 will be invaluable. Then, the feasibility analysis and development you make in point 2 can be put to the test.
With a dynamic web platform and digital marketing tools, you can easily roll out an MVP (minimum viable product) of your new product or service – all of it online in a matter of a few weeks rather than months.
4. Digitalize Across Your Back Operations
As mentioned in point 1, if your “CRM system” is a makeshift one made up of Excel files till now, it’s really urgent you re-organize. Salesforce offers an SME version but if it’s beyond your reach, there are tons of other tools with affordable starter plans that can start you off.
What’s more important are the questions you need to ask when choosing one. A key functional one is how easy it is to set up and use for non-technical users. It's got to practically scream a "CRM for dummies". At the same time, you need to know:
How well the CRM integrates with your web platform so that leads get streamed to inform sales strategies and action, building the opportunity and conversion pipeline;
How it informs marketing or after-sales support so that the customer experience does not stop at deal-close but is further enhanced with well-targeted campaigns that can be enabled by integrate-able martech tools (e.g. Hubspot, MailChimp, Tableau, ActiveCampaign, Moz, etc);
How it promotes transparency and a seamless customer journey from the very first contact through to transaction, billing, fulfillment, support and loyalty. Here, you'll need ERP type systems that your teams responsible for product, service support, training, accounting or HR, can use to easily integrate and automate with the CRM.
For example, is transaction visible cross-functionally: finance – in offering cashless payment online with automatic invoice acknowledgement; customer success – triggering delivery or after-sales support; IT – personalizing a service, etc.?
You may not want to tackle all of it in one go but knowing to what extent your choice of CRM can scale, integrate and upgrade when your teams are ready to take on more will be essential for digital business longevity.
Full integration of systems and processes will also help to break down traditional silos to form cross-functional team collaboration, shared visibility and agile performance. These are all necessary ingredients to building excellence in CX.
5. Digitalize Your Customer Interactions
Finally, buyers want to talk to vendors on their own terms. That means anticipating and enabling what they will do, how they will do it and when they will do it. B2C e-commerce SMEs have gotten good at building omni-channel strategies and touch points.
Consumers are able to engage with them in a myriad of ways, passively and actively. They interact with them at various purchase points online or offline. They buy from different devices or choose their preferred e-commerce platform to check out a purchase. They seek out trusted peer advice on their favorite social media channel or specialized user forum, etc.
A mix of inbound and outbound campaigns typically drives these – i.e. the age-old push-pull strategy except it’s now blending real-world with virtual. The most performing SMEs have both a physical and a cyberspace store.
In B2B, realizing the full potential of omni-channel strategies is still lagging. But tons of great examples already exist. So just get creative in copying, adapting and innovating.
More than 70% of customers say they have bought products and services they didn’t know would exist five years ago. More than two-thirds of business buyers actively choose to buy from a company they consider to be innovative.
So don’t be contented to just sell on your own web platform or e-commerce site. Find industry platforms or online marketplaces where you can list your product and services. If you don’t see one for your sector, can you build it? An online marketplace is an additional revenue source if you can pull it off.
Another example is optimizing social media channels. These are vast and readily available to help multiply your customer’s touch points and interactions. Your B2B buyers may not think to look for your products on such channels, but people deal with people first.
If you and your team show up online and start reaching out, the connections become more personable and human. You might be surprised at how fast confidence can be built with people who never knew about your company before.
Winning Online is the New Normal Post COVID
As a digital-first CEO, your comeback strategy has to be up and running as soon as possible. So there's no better time than now to get moving. As Winston Churchill said, "Never waste a good crisis". Innovation abounds when the situation calls for it.
Companies who are finding new ways to keep customers and survive do so by turning to digital. From food delivery to health and live entertainment, B2C SMEs are leading the charge, testing and learning as they go. Once unimaginable, even the fitness industry is re-inventing its "products" to stay relevant. So take a leaf from them.
Sure there are all these other urgencies right now to deal with -- depleting inventory, delivery or distribution disruptions, staff layoffs, stopping a bottom-line from bottoming out completely, and so on. All the same, you know a radical change to doing business is sorely needed for survival. Business as usual has already devastated your cashflow in more ways than one.
Since the major source of new cashflow is customers, that’s what the post-COVID comeback strategy has to center on. A shrinking market will mean having to fight off more competitors. One way to be ahead is to innovate digitally to find new markets further afield.
Having a digital-first CEO mindset is not about getting in over your head. It’s about thinking big and starting small. Prioritize your most important customer-oriented goal. Then mobilize cross-functional participation for systematic trying and testing to achieve steady progress. There is no doubt you will start to see the returns. On top of that, you will be prepping for a future of better performing CX as digital gets powered by AI and robotics.
So what have you got to lose? If you want to explore right away workable digital-first strategies for your SME, let’s talk.