Rapid Revenue Recovery: Key priorities for post-COVID-19 growth
COVID-19 continues to have a far-reaching effect on people’s lives, families and communities as well as the global economy. Amid the economic reality, companies in response are focused on driving a dual agenda – protecting lives and livelihoods. As the crisis continues to upend lives, companies are struggling to understand the full impact on their businesses and how to best respond.
With economies beginning to reopen, our B2C Consumer Sentiment Survey (May 29, 2020) showed that consumers and customers have migrated to digital channels in massive numbers while patterns of loyalty have been disrupted – opening up entirely new fronts in the competition for customers.
It’s no longer enough for businesses to reposition their brands – they need to rewire for speed and agility to quickly recover revenues and accelerate growth. To emerge stronger, companies should consider focusing on the following actions to build the muscles for post-COVID-19 growth:
- Identify and prioritize – revenue will emerge in granular pockets, not large swaths
Retailers should use advanced analytics to monitor granular customer demand signals and quickly identify “recovery” signals to prioritize all sources of revenue by size and time to impact. This in turn could help them make intelligent, informed decisions on ways to reposition customer value proposition and stay in lockstep with their decision journeys to continually delight the customers.
This may include launching targeted campaigns to win back loyal customers; developing customer experiences focused on increased health and safety; adjusting pricing and promotions; reallocating spending to proven growth sources; reskilling the sales force to support remote selling; digitizing sales channels; and automating processes to free up sales representatives to sell more.
Once identified, companies should consider rigorously prioritizing these measures to reflect their impact on earnings and the company’s ability to execute quickly.
- Act with urgency and speed as the new operating muscle – breaking old structures and norms
During the pandemic, businesses have moved faster than they dreamed possible just a few months ago. Maintaining that sense of speed, decisiveness, and bold moves will likely be a differentiator as we move into recovery and the next normal.
Take for example a furniture retailer who, during the downturn, was able to drive a 60% improvement in sales in digital channels over just four weeks. Through its analysis, the retailer discovered demand for baby beds, and tailored its campaigns to that audience, even offering free child beds for those who had babies born during COVID-19.
Marketing ROI approaches that use data to make rapid reallocations can often yield great returns in the shortest amount of time. One large retailer freed up millions of dollars by eliminating distribution of circulars based on granular response data to 40% of customers who didn’t change their behaviors, reinvesting the funds into more successful digital targeting practices.
This means retailers should consider executing based on data and granular insights then continually adjust and improve. More importantly, identify pockets of growth opportunities to launch the biggest and “readiest” initiatives – whether that’s adjusting sales-coverage models, tailoring product features, or shifting marketing spend to highest-performing channels.
With more than 20% of consumers reporting they have switched brands during the crisis and more than half saying they plan to stay with the new brand, retailers should consider shifting promotional spend to defend share in categories with surging demand and where there is a risk of switching.
- Embed virtual agile squads – using quick-cycle results to inform faster decisions
One potential way to speed up decision making is to develop and manage high-performing agile teams around specific sources of revenue. This allows these agile squads, which should include agency partners where appropriate, to have the ability to make swift decisions across key areas based on near real-time data.
For sales, the team could prioritize green shoots by stewarding large and strategic deals and oversee execution, speeding deal review for impacted segments and maintaining discipline. Another squad could focus on developing a long-term view to avoid panic reactions and develop clear guidelines and objectives for the commercial team. These cross-functional squads bring together people with key skills – data analytics, sales operations, design – tailored to the specific area and supplemented with additional experts as needed, e.g., legal, finance, risk, HR.
In this sense, “agile” means putting in place a new operating model built around the customer and supported by the right data, processes and governance. Cut through drawn-out ‘boardroom’ debates. Let the customer vote. Agile sales organizations, for example, continuously prioritize accounts and deals based on field data, and decide quickly where to invest.
Similarly, fast decision making between local sales and global business units and the rapid reallocation of resources between them will likely require a stable sales-pipeline-management process – with the data to inform what is working/what is not.
This is a once-in-a-generation opportunity that is likely to have a profound impact on who is well-positioned to thrive when the crisis finally abates. What companies do today to capture revenue quickly could potentially lay the foundation for future growth and future capabilities. To learn more about the key hallmarks retailers could consider to succeed in the next normal, click here.
Brian Gregg is senior partner at McKinsey & Company.