How COVID will impact business in the long-term
How this experience will likely change things forever.
As officials and leaders weigh public health and safety against the desire to reopen businesses and public spaces, it seems obvious that things won’t be all the way back to “normal” for a long time. But the pandemic will eventually subside, and business will pick up again. When it does, folks will have to tackle what might be the most important long-term challenge for businesses. That is, how can we plan and prepare to succeed in a post-coronavirus world?
The truth of the matter is that many things will be different for longer than the pandemic is around, and there will almost assuredly be permanent changes that home improvement pros will have to navigate. Adapting to those changes will be key to maximizing the opportunities that go hand-in-hand with a changing business landscape.
Dips in consumer demand
While there might be pent-up demand for services among some consumers that boosts business after the outbreak has passed, it is looking increasingly likely that there will be long-term economic repercussions that will drive down overall demand in the longer term. As of the beginning of May, more than 22 million people had lost their jobs, wiping out all the growth that has taken place since the 2008 recession. That number was up to 33 million this month.
With so many people losing their income, and overall demand for goods across many sectors slowing significantly, the times of demand for contracting services outstripping supply might be behind us for a while, and budgets might be curtailed. As a result, competition for jobs will likely be steeper.
So what does this mean?
Investments in marketing will need to increase.
For many contractors, the bull market and large consumer spending numbers of the past decade have meant a steady stream of new business opportunities. As a result, huge investments of time and money into marketing initiatives haven’t been the norm. With the predicted retraction in consumer spending, competition for leads will be stiffer, and the need to reemphasize and focus on marketing channels will be critical. Content strategy, smart ad spend, and proactive lead generation will separate the winners from the losers in the coming months and years.
The sales process must be higher touch to help contractors stand out from the competition.
- To nurture your leads into sales, provide multiple touchpoints and regular outreach (focused on adding value rather than overtly selling) until the purchase decision has been made. This can be a combination of emails, phone calls, and even direct mail.
- Personalized experiences – which means both understanding and speaking to the individual customer’s needs, wants, and pain points – will need to be par for the course. Personal touches can include portfolio examples that align with their project and tastes, communications that are updated to reflect their previous interactions (see: marketing automation), and any extra opportunities to go above and beyond to win the business.
The future is digital, even in “traditionalist” industries.
People thought the idea of selling books online, depriving people of the opportunity to preview a few pages in a bookstore before buying, was crazy. Everybody knows how Amazon and its Kindle turned out.
People thought nobody would buy shoes or eyeglasses online without being able to try on multiple options in person, but companies like Zappos and Warby Parker proved those assumptions wrong. Companies like Wayfair have proven that the model works even for expensive items like furniture.
As has been proven time and time again, businesses that can foresee change and buy into digital innovation are the ones best positioned to succeed. This pandemic is simply the latest example of upheaval giving way to opportunity.
So how might the home improvement industry be changed by, and even embrace, a world in which digital experience is the new normal?
Sales appointments via videoconference.
Videoconferencing services like Zoom and Microsoft Teams saw usage spike by at least 40% the week of March 16, the first week of extensive nationwide quarantine activity. Companies that have been reluctant to allow remote meetings with customers or teammates have seen their hands forced these past weeks, and many are realizing that the perceived downsides don’t really exist. In fact, many are realizing the efficiencies involved, in terms of both time and money, with being able to conduct business remotely.
While foregoing an opportunity to get an in-person meeting with prospects or leads may have seemed ridiculous in the past, technology has created an environment where being able to share a screen adds new possibilities to sales appointments. Our folks at Project Map It conduct product demos and sales appointments almost exclusively through video conferencing, and we have at least as much success as when we’re at tradeshows or visiting prospects in person. It saves us on time and travel costs, and also enables us to be more timely and responsive for our prospective customers.
Step up your web presence.
Websites and social media platforms are already crucial business tools, but a glut of consumer demand for contractors’ services has led to them being treated as luxuries rather than absolute necessities. As a result of what will likely be increased competition for a smaller number of jobs in the future, in addition to heightened emphasis on digital by consumers, contractors will have to invest more effort into their digital properties.
Deemphasize trade shows as main sales and marketing drivers.
Whether because people will be more hesitant to attend events with large crowds, or because the transition to digital means fewer people feel the need to take on the time and expense associated with attending a show, the role of trade shows in companies’ strategic planning is in flux.
Many sales and marketing teams are already having to pivot as a result of nearly all industry events being canceled for the foreseeable future. This experience will likely leave a lasting mark on the trade show industry as a whole, and putting fewer eggs in that basket may be a prudent choice going forward.
In their place, companies should ask themselves how they can create an immersive experience for their prospects, partners, and other audience members that offers the same level of value they would normally deliver via trade show. Another consideration is how sales and marketing strategies and budgets are changed as a result.
Changes in customer preferences
Even before the pandemic, there was an increasing trend towards DIY projects, particularly among the younger generation of homeowners. Rather than simply letting the pros guide a project from A to Z, many customers view their contractor relationships as more collaborative, opting to involve themselves more in aspects of the projects. For example, during a family room renovation, a homeowner might ask for a break in work to allow themselves to paint when the drywall is in but before a carpenter installs trim.
Another trend that has been growing is customers breaking large renovation projects down into smaller parts, and spacing them out rather than tackling everything at once. Younger generations of homeowners are more hesitant to take on huge changes, and this plays out in the way they manage their home improvement projects.
Given the economic environment into which the world is headed, these trends will likely accelerate. This means having to accommodate clients’ requests to work more closely together, and perhaps on smaller scale projects spaced out over longer periods of time. For the contractors who succeed in accommodating these shifts in consumer behavior, opportunities will arise to build long-term, successful customer relationships. Clients will look to the experts as trusted partners, and in the long run may be open to more opportunities to work together.