Jun 4

Jun 4 The Changing Customer Landscape

Is your company a Struggler, Juggler, or Front Runner?

This blog has been co-authored with Jack Healey, CEO of Bear Hill Advisory Group and R3 Advisory Group of which Jessica Noble, CEO of Magnetic Experiences and Jack Healey are founding members.

In our blog How to Leverage CX Technology During a Crisis posted April 22, 2020 we introduced three (3) company profiles as they relate to how companies are positioned during this pandemic and how they are operating through it. The purpose being to guide companies on how to lever technology based on your current position, likely path forward, and top priorities including cost reduction, cost avoidance, revenue recovery, team capacity / productivity, risk avoidance, risk mitigation, strategic differentiation, etc.

In this blog about The Changing Customer Landscape, we share how to use the three (3) company profiles to evaluate the changing needs of your customers and guide you through how to best support their needs and add maximum value.

So much has changed over the past several months. As we have facilitated industry round-tables to discuss current challenges, potential opportunities, and risks on the horizon we’ve heard about and seen firsthand companies rising to the challenge and adapting on-the-fly to serve the changing needs of their customers.

With more changes happening and more on the horizon, most difficult to predict, these profiles can provide insights into:

How you plan for business continuity, business and specifically revenue recovery?
Best strategies for longer-term reinvention to maximize your business?
How to maximize the outcomes you provide for your customers?
How have your customers’ needs changed?
What challenges are your customers currently focused on?
Which issues are most relevant for your customers now?
What questions are your customers asking now that they were not before?

Once you get a better understanding of your customers’ wants and needs, form hypotheses, and validate your assumptions by continuing to seek feedback as you rapidly innovate your approach, products, solutions, service, and support ideas. This is a great time to include customers in your innovation process, albeit a rapid process.

Strugglers, Jugglers & Frontrunners

Consider which of these three situations mostly closely defines your company as well as your customers. Categorize the types of companies you work with as one of the following:

1. STRUGGLERS - Demand Took a Nosedive

Struggler Situation:

Their current business model is not working under COVID-19 restrictions and recovery may be difficult once restrictions are relaxed and businesses begin to re-emerge. The strategies and tactics deployed to survive are inflicting long lasting damage to the business. Chances are their processes were not optimal prior to the crisis, but now vulnerabilities are further exposed.

Struggler Needs:

Strugglers need to re-evaluate their strategy and tactics immediately, damage to business relationships may long outlast the current crisis. Move from reactive to proactive as quickly as possible. Drive efficiency. Cut internal inefficiencies—expense reduction and cost avoidance (i.e. costs that do not directly impact customers/customer experience).

Common Struggler Attributes:

Rapid decrease in demand for products or services with no plans for this risk event
Tactics focused on reactive short-term survival, increased debt levels, violating contractual obligations, and damaging both supplier and customer relationships. While acknowledging long-term adverse impact to these tactics, management employ fatal “we’ll deal with that later” mentality
Disjointed inconsistent communications with customers, employees, suppliers, and financial institutions cause distrust and re-enforce reactive management perception by others
Severe cuts in labor- layoffs with little assistance past reference to unemployment web sites and government CARE Act sites
Customer communications not targeted to their needs and reduced level of service availability

Key Struggler Issues:

Swift decrease in demand for products or services, which means the primary concern is short term survival.
Uncertainty about when, and how long until, recovery begins. These companies are likely anticipating a long, difficult recovery.
Lack of demand forecasting discipline and financial instability depleted cash reserves (cash flow). As a result, they are being reactive, cutting labor, investment, and other expenses when, in fact, these same innovations could be critical to helping this company step over the chasm they are currently facing.
Identifying a new offering or product that matters to the market right now while dealing with the challenges of standard product or service delivery channels being restricted or shutting down—as a result, possibly managing volatile supply and demand for the next 3-6 months.
Reviewing how the CARES Act could help them and trying to find solutions with having proper crisis management procedures in place.

2. JUGGLERS - One Hundredfold Spike in Demand

Juggler Situation:

Organizations that have products or services in high demand who have seen a spike in activity and are scaling their operations to meet customer’s needs. The strategies and tactics needed to meet this demand must be balanced with the impact of future excess capacity. These companies have adequate business processes to sort through the risks and immediate opportunities due to the business environment but are struggling to scale and meet demand or add necessary capabilities to support sales through fulfillment and delivery. During COVID, prior investments in technology allowed for Work From Home (WFH), flexible scheduling and supply chain visibility. However, capabilities in these disciplines were not optimized, so while knowing “what they should be doing”- have a hard time implementing.

Juggler Needs:

Jugglers need to ‘step back’ to assess the long-term impact of the current strategy and position their organizations for long-term profitability, while designing processes to seamlessly adjust post-crisis. Move from reactive to proactive as quickly as possible. Begin by maximizing effective employee utilization (productivity). The strategies and tactics needed to meet this demand must be balanced with the impact of future excess capacity.

Common Juggler Attributes:

Rapid increase in demand for product or service overwhelm current processes and systems
Increased demand worsens supply chain disruption already challenged by worldwide demand
Focus on capacity to build, create, serve, and/or deliver (process, policies/procedures) within current pre-crisis business and financial constraints
IT capacity constraints and security risks increased by influx of end points and work from home strategies
Need for skilled labor and concern for health of associates challenge HR and front-line managers

Key Juggler Issues:

The uncertain demand for future products or services and the velocity of demand.
Reactive mindset—running into the storm without considering what happens after.
Supply chain disruption (exacerbated by countries worldwide operating under massive constraints).
Lack of capacity to build, create, serve, or deliver processes, policies, and procedures.
Security, HR, and tech barriers with existing tech not suited for extended work-from-home (WFH) operations.
Lack of visibility into comprehensive operating costs also drives financial risks.
Minimal availability of enough skilled labor.
Risk of COVID-19 exposure to staff and the resulting shutdown or shift to a remote workforce.
Deep impact and uncertainty on how to scale to meet demand. You anticipate more acute (shorter) recovery, even possibly an easier recovery, depending on whether demand deflates as quickly as it inflated.
Possibly managing volatile supply and demand for the next 3 to 6 months.
Unpredictable behavior of partners, employees, and clients.
No time for crisis management planning and procedures. Each new or changing variable in the marketplace will require significant heroics versus adaptable org more prepared to flex.

3. FRONT RUNNERS - Demand Slowdown Equals Strategic Opportunity

Front runner Situation:

Companies that view the situation as an opportunity to streamline their operations or innovate their business model to position themselves to accelerate growth as the economy begins to recover. If your customers are viewing their current situation as an opportunity to streamline operations and innovate their business model to position themselves for accelerated growth as the economy begins to recover. Your customers may never go back to the “old way” of doing business now, making this the perfect time to start disrupting with them. Front runners are fascinated by the how, where, and what that comes after the crisis, and moving ahead with innovation and transformation. These organizations embrace ‘continuous improvement’ Enterprise Risk Management and intense customer commitment.

Front runner Needs:

Front runners recognize that competitors may also be reinventing and view this as much of a defensive strategy as forward leaning. They seek many points of view for improving their business. Move from proactive to predictive to gain strategic advantage (reinvention) during recovery.

Key Front runner Issues:

Resilience and business continuity investment and training prepared the organization to react to disruptive risk.

Effectively managing remote workforce and maintaining team engagement and productivity.
Decrease (or limited impact) in terms of product or service demand.
Typical channel(s) for product or service delivery may be restricted.
Primary concern is making the ‘right investment’ now for long-term viability and strategic positioning.
Uncertainties about when, or how long until, economic recovery begins.
Possibly cutting other expenses (e.g. real estate, materials, and supplies).
Determining most strategic opportunities to invest in new technology, offerings, products, channels that matter to the market.

Possibly managing volatile supply and demand for the next 3 to 6 months and/or proactively re-calibrating supply chain due to global impacts.
Identifying small, steady, strategic steps versus giant, risky leaps.
Prioritization and focus on most impactful opportunities.

Conclusion

You and your customers rose to the challenge and rapidly adapted your business over the past several months as stay-at-home orders were enacted, supply chains disrupted, and business-as-usual came to a screeching halt. Now you and your customers must continue planning for change as well as preparing for intermittent waves of geography-specific business disruptions that will require continued business agility and resilience. Recovery strategies and ERM (entity-relationship modeling) need to account for changing risk profiles, improving team productivity, and maximizing capacity, staying connected with customers and in tune with their changing needs, and fine-tuning existing processes and technology to support service and support delivery.

Consider which of the above three (3) profiles best represents your companies. Which best represent your customers. What are your customers greatest challenges? Opportunities? How can you best help? Where can you add maximum value?

After answering those questions, go through an empathy mapping exercise for your Strugglers, Jugglers, and Front Runners to hone in on customer problems-to-solve and jobs-to-be-done and surface where you can add maximum value right now.

Jack P. Healey is a financial and operations executive whose focus is on reducing business risks through proven strategies and tactics. He authored the Business Crisis Diagnostic and Prevention Model™ which provide businesses with the framework necessary to identify impending business crises before they occur. He is a former Audit Partner and CFO of a publicly traded company. He is a Certified Public Accountant Certified in Fraud and Forensics, Cybersecurity SOC and Services and Certified Fraud Examiner. He is a member of AICPA, ISACA , ACFE and NACD.

R3 Advisory Group is comprised of seasoned executives of widely varying disciplines focused on helping companies with Rapid Recovery Reinvention, using the R3 RAPID approach to recovery with reinvention producing superior outcomes. R3 Advisors have experience working together and deep industry expertise in Manufacturing, Consumer Package Goods, Professional Services, SaaS, Contact Centers, Healthcare, Retail, Restaurant, Grocery, and Distribution verticals.