How businesses can make themselves essential in the times of Covid-19 and beyond
I was listening to Biz Hack Podcast by Dr. Alison Eyring, Founder and CEO of Organisation Solutions, a consultancy that provides bespoke organisation development and change management services around growth.
A well respected Organisation Psychologist and OD consultant, Dr. Erying is a known figure in the organisational consulting realm in the region. I am a distant admirer of Dr. Erying’s work – unlike many other I-O Psychologists that focus largely in assessments for hiring and promotion selection, Dr. Erying puts her solutions to good use by helping companies grow and manage challenges of growth. This is very much what I believe in and what IOResources strives to do for our clients.
In this episode, Dr. Eyring interviewed Sean Tan, Director of True Group to understand how he leads the True team to Supercharge Cashflow and Revenue during this pandemic.
This is a very interesting case that shed some light on what a business in the pandemic does to make themselves “essential” and generate revenue in the current context.
Here is the story and this is what I’ve learnt:
True Group operates gyms in Singapore and Taiwan. It is very much a brick and mortar business. When the pandemic hits, True Group immediately prepared themselves for the worst case scenario by projecting close to zero revenue. In response, their immediate actions forward were:
- Cut cost
- Protect cashflow
- Retain customers
Nothing special – you may be thinking. But the brilliance is in its strategic execution, where it:
- Acts Fast Even When It Is Painful
- Strategically Protect Cashflow - And Turn Pain into Potential
- Repivot but Play to Core Strengths
Acts Fast Even When It is Painful
Be Courageous and Realistic. Early into the crisis, True Group planned for the worst case scenario.
Customer Remains at the Centre. In anticipating membership dropout, True Group quickly allowed members to suspend membership with no fees or questions. (Hey, being seen as a customer-centric provider goes a long way!)
Protect present and Future Cashflow. True Group asked members want to suspend membership and drop out to write in their request. As they wrote in, True Group used this crisis strategically to communicate, engage and preserve relationships.
Strategically Protect Cashflow - And Turn Pain into Potential
Ask for Help. True group asked these members if they would reconsider not suspend/drop out in support of the business, so that they can stay on to serve the customers when times are well again. Of course, True Group had to make their request compelling. Great things come out of asking – they retained over 70% of the members. In doing this, True Group also “sieves out” good customer accounts that can be retained and has potential to be developed further after the crisis.
Take Care of People in the Same Boat. Knowing that everyone in the ecosystem is just as lost and anxious to know what is going on, True Group stepped up their communication with landlords and suppliers to have very regular and constant communication with them. As a result, relationships with stakeholders become closer than before.
Take Risk. True Group took up the cheap loans that were made available during this period “to the maximum”, just to shore up capital and do whatever that is needed to augment their services.
What is so strategic about what True Group has done?
In above the process, True Group brings their customers and stakeholders onboard as partners, strengthening relationships and creating a social cushion within the ecosystem they operate in.
Research tell us that the cost of finding new customers is 5-10 times higher than recurring businesses. By retaining customers even what seemingly at a loss, they have also strategically protected both the current and future cashflow.
The loans may put True Group’s debt position in a less favourable light, with interests to service. But this is a rare moment in time when money is way more affordable. By using it to improve their services, they are essentially building up more arsenal for their business, hence “turning pain into potential”.
Repivot but Play to Core Strengths
In this new world, where everyone is scaling back their expenses to the bare ‘essentials’. This means that besides food, shelter and utilities, everything else including going to gym, can be perceived as “non-essential”.
When True Group was forced to shut down during the Circuit Breaker, they were forced to take their classes online, offering them free of charge. Not only are they not generating revenue, they are competing with the entire world on the www.
It was during this dire moment when the management saw something within that could be turned into a product that is much needed by many businesses out there:
The IT Department has developed a capacity regulation system, a QR Code system not unlike the Safe Entry software specifically for their gym members. This simple solution allows quick and easy monitoring of entry and exit, giving a real time count of the number of members within the compound.
Developing New Product with Existing Resources
True Group decided to take this solution to market, offering it to landlords, schools and buildings, etc. to perform “de-densitization”. This helps True Group to generate an alternative stream of revenue by repurposing their existing assets and solutions.
In closing, Sean shared practical advices True Group took away from the crisis:
- Have your finger on the pulse of what’s going on to know the needs and gaps in the market so that you can act with speed.
- Know your team’s strength and capabilities – you will be limited unless they can pivot along with your vision
- Look at pivoting but don’t pivot too far (from your core capabilities). Doing business takes time to learn and set up!
And from Dr. Eyring,
- You need to know what capabilities you have and know to what extend you can push your team before they break
- Research shows that if you pivot too far from your core capabilities, the more likely you will fail
At any one time, businesses need to know why they exist, what problems are they here to solve and what values are they creating. This is regardless whether you are a startup or a mature business.
The pandemic in reality, has created an existential crisis for many. Most businesses – new and established – have “reverted back” to the startup stage where we review our market-solution fit so that we can answer these questions again:
- What is our core capabilities/unfair advantage?
- What are we here to solve?
- Does the market we used to serve still finds us relevant?
- If not, which other markets might still find us useful?
- Is the problem/value creation big enough for customers want to pay for our solution(s)?
But before we are too eager to throw the baby out with the bath water, we might want to first find out:
- What do our customers find most valuable in our services?
In my case, my coaching clients finds my ability to help them connect the dots in the messiness most valuable. Because when they get the landscape, they know how to carve out the path to where they want to land.
- Are we not getting orders because we are not accessible now or not convenient to access?
It’s a digital word now – do you at least have a digital presence? Is it easy to find out you online? Can customers place order and make payment online with you?
- Is it a pain to engage and buy from us now?
Is it easy and convenient to buy from you? Can they reach you for help without getting a heart attack?
- What else can we do within our core capabilities to create, augment, repurpose our value propositions?
Re-pivoting is a big jargon. Let’s just say - if you have a “pre-loved” business before Covid-19, how can you re-purpose it today?