Bring on the Zombie Apocalypse.
We have previously identified the 3 phases of this viral economic crisis:
Survival
Make the boat safe
Set up to get racing again
Last time it appeared that a number of the smarter businesses were indeed starting to look for the opportunities on the other side of the crisis, and were starting to get set to get up and racing again.
We now have some interesting developments:
VIC and NSW are teetering on the edge of of being sent back to the start line with increases in cases flaring up again
The other states are keeping borders closed for a while longer
Internationally there are ongoing chaotic responses to the pandemic in the US and parts of Europe
The Zombies are amongst us…
There has been much in the press about “Zombie” companies, with liquidations running at an incredibly low rate, even though the economic contraction and rise in unemployment have been significant. The logical hypothesis being that the various government subsidies are not only propping up businesses that were struggling as a result of the lockdowns and the influence of the pandemic; but they have also propped up a lot of businesses that were terminal and on life support before the pandemic hit.
With the extension of JobKeeper this means that a number of companies won’t fall off the previously anticipated September cliff - a horrible meeting of significantly depressed sales, with a sudden re-introduction of full wage costs - straight away. It is however reducing from September, and again in the New Year. There is also only one more quarterly PAYG relief payment to go. Similarly a lot of the relaxation of loan and rental terms will start to disappear in the coming months, once again placing businesses under pressure to be 100% on their game with regards to somehow growing sales in a shrinking market, whilst keeping a really tight control on costs and cash flow.
We already know that there are some clear “new normals”: (applicable across B2B and B2C)
Digital was really important, it is now critical
Consumers are learning how to deal with life online very quickly
Consumers are starting to compare the UX you offer with others
If you don’t know what your customer's UX is, then you could well have a problem that you don’t even know about yet, but your customers probably do
Digital is bringing world’s best CX & UX to your customers, faster than you may have thought, and they are ranking your offering against it
Data is critical
Financial data that allows you to analyse all elements of profitability instantly are essential in uncertain times
Financial data that allows you to analyse all elements of cash flow instantly are even more essential in uncertain times
If you want to be competitive in the digital space, you are going to need good, reliable, and accessible data
You need to be able to understand the data you have, and the value it offers to you and your customers
Customers are looking for trust even more than before
Customers are going to expect greater value from purchases when times are tough
Everyone is talking about businesses needing to be flexible and resilient to survive
The last one here is probably the key to being able to take advantage of and/or gain from the other points, and will be the one that sets you apart from the Zombies come the apocalypse.
There are some (possibly lucky) businesses that were well run, or well resourced, or both before the pandemic hit, and they have still received PAYG relief, even if their sales haven’t dipped. Anecdotally a number of these companies are currently utilising that extra cash very smartly to commence digital and other business improvements to get them even further ahead once the chaos subsides and some kind of normality returns - their resilience is enabling them to be flexible. Others are quickly shifting their product and/or service offerings to meet changing customer demands - building up resilience by being flexible.
Of course even a few Zombies seem to have found some good brains to eat, and are utilising the cash flow and other forms of relief to get their bodies back into shape; shaking off some of their worst Zombie features. They are getting prepared to live on well into the future as the profitable business they were before things wandered off course and they headed over to the dark side. A number of these businesses had been protected by an unprecedented run of economic growth that kept a lot of businesses plugging along for a lot longer than they really warranted / deserved given the lack of care, attention and investment they had received. The smart ones are working that out now, and doing something about it.
Then there are the true Zombies….and this is less about a Zombie attack in the sense of them attacking us, rather that Zombies are there to be attacked for the revenue they are currently consuming, that you could be taking over and adding to your revenue, delighting more customers along the way.
Time for a good long look in the mirror - which side of the apocalypse are you going to be on, and what are you going to do about it?
