Despite huge losses due to the pandemic, my company is back to profitability after just five turbulent weeks. Here are some takeaways from our success.
The effects of the pandemic have seemingly left no business untouched over these past several months. Even my company, despite being labeled an "essential business," was not spared.
Just a few short months ago, our weekly earnings took a massive 41% hit as a result of nationwide shutdowns. You could say I was a little worried. OK, a lot worried. But today, I count myself as fortunate – our sales and leads have already returned to normal.
By the end of July, we were officially back in the black for the year and had made up all the losses that left us reeling earlier this year. We're now on track to be 10% up in revenue over last year. The speed of our rebound has shocked even me – we actually had the highest-grossing May in my company's history, and this summer (usually a slow season for us) has been the best one yet. June was our second-highest month in our history.
And the best part? I never furloughed or laid off any of my staff. To be clear, I'm not bragging. I have some previous experience with navigating a financial crisis (the one we went through in 2008), and that experience came in handy once it became clear that most of the country was going to shut down. The strategies I learned in 2008 were put to the test during the pandemic's rise, and applying them resulted in a much quicker bounce back this time around.
Although the pandemic is still looming over us, I'm confident that what I learned will help your business survive as well. Today, I'm here to share these strategies with you.
1. Maintain your marketing budget and outflow as long as you reasonably can.
This move is, without a doubt, the defining factor that kept my company going strong, even in the most abysmal circumstances: We refused to cut even a penny from our marketing budget for the duration of the nationwide mandated closures. I stand by this 100%. Maintaining your marketing efforts during an economic slump is crucial to your business's recovery.
That said, I know it might not be feasible to continue spending money on marketing. But keep in mind that there are always other avenues to free up cash flow outside of cutting your marketing budget. For example, I decided to speak with my vendors directly and negotiate debt and repayment terms with them instead of slashing my ad budget. I knew that by maintaining my marketing, I would have no trouble paying them back in the near future. They agreed that I was a good bet and could be trusted to pay back my debt as soon as I was able.
I've been down this road before, circa 2008. When the housing bubble burst and I lost 46% of my clients overnight, and then the overall economy slipped into a recession, I was worried. I reached out to experts, who recommended that I cut my marketing budget. I went against my gut instinct and complied.
Initially, we thought this was a great play. Our losses in 2008 were limited to $150,000 overall. But by 2009, the true cost became clear: We ended the year down $5 million, and I was close to losing my business for good. I tuned back in to my gut and overcorrected the marketing budget, and we were able to bounce back.
Now that you know this isn't my first rodeo, I hope you understand why, this time around, there was zero chance I was touching my marketing budget. I realize that, as you look at your current outgoings, it may be tempting to eliminate marketing. But please don't make the same mistakes I did. Time and time again, marketing has proven to be a critical business investment, not a simple opportunity to grow.
However, I realize that finances are stretched thin right now. So let's see what else we can focus on to get things rolling again.
2. Ramp up communication efforts that signal value to incite loyalty in your client base.
In times of economic turbulence, people take reassurance in open and useful communication. This is something that your business can easily tap into. All you have to do is put on your "helpful member of the community" hat and take off your "please buy my product or services" hat.
Opening up lines of communication with prospects and customers (basically, everyone in your database) has a few benefits. First, it keeps your business top of mind. It also reassures them that your business is alive and well and capable of servicing them, should the need arise. Most importantly, you'll build goodwill and affinity with potential customers by being genuinely helpful and thoughtful in your communications. If they can't become your customer right then and there, they will certainly keep you in mind down the road.
There are several ways to market to your existing clients without breaking the bank:
Push lots of social media content. If your socials aren't active, people may assume that you're closed for quarantine or even out of business. By posting daily or every other day, you establish that you're ready for the community. Take an extra step to assuage customers' safety concerns by posting photos or videos that show your staff properly following CDC guidelines (wearing masks and gloves, santizing high-touch surfaces, etc.).
Send lots of (non-spammy) emails. This is a great way to convey those changes in regular business operations I touched on above. You can make them fun and engaging by including media like memes and videos, but mostly fill your emails with helpful and relevant information.
- Optimize your website by publishing blogs and newsletter updates. Media consumption is up 220% from last year. This means the world is consuming content as fast as you can put it out.
Try to think of something you can put out for your community that others can't or won't. For example, during the pandemic, my company published a Small Business Coronavirus Survival Guide and updated it almost daily with the most valuable information for small businesses. We're still updating it, and every time we do, we email our entire database. Since we began, over 200 recipients have personally responded. From those who took the time to reply, we've generated over $100,000 in cost-free revenue. This is a pretty fantastic side effect of publishing benevolent content – all we had to do was put in a little effort and time. Trust me, people will always notice when you do.
3. Utilize every resource available – especially the free ones – and offer your own.
Outside of Paycheck Protection Program funding, many tech industry titans are offering relief for small businesses. For example, Facebook has made it easier for small businesses in retail by launching a platform specifically for them. Virtual conferencing giants Zoom, Google Meet, UberConference, Discord and GoToMeeting are offering their services for free through the fall – extremely useful for those who work from home. In addition to the restaurants with inside seating that offer free Wi-Fi, Comcast has begun offering free hotspots in certain areas.
Anything you can offer your community right now for free will cement your business in consumers' minds as a real benevolent force. There's a reason that big corporations are doing it nationwide: It wins loyalty and garners respect. By publishing helpful content or offering other free resources, you will be winning over the hearts of those you help, and they will be driven to spend money inside your doors.
I genuinely hope that some of the information above helps your business bounce back. Hold your creative communication efforts with the community steadfast, and you will have a much better chance of outlasting the pandemic.