Demand Shock: Some companies are set up to manage disruption much better than others
Businesses across the world are bracing for a “demand shock”. This is not only hard to manage and bad for sales – as the photos of empty shelves in supermarkets and online recipes for DIY hand sanitizer are starting to show. The bigger risk is that the customers you lose may never return, limiting your future growth potential.
President, C Space Americas
Jessica’s tenure at C Space began 10 years ago in sales, where her thoughtful approach to problem-solving and fearless leadership accelerated her to the role of SVP of sales, overseeing a 20+ person national sales team and leading the company’s annual revenue to record levels. Now, as President of C Space in the Americas, Jessica is committed to making business more human. She envisions a near future where the relationships companies form with customers play as vital a role in organizational operations and decision-making as big data and sales results.
Businesses across the world are bracing for a “demand shock”.
Demand, in the simplest terms, is what people will buy at a given price; a shock is an unexpected fluctuation in that pattern.
What’s causing the current shock is, of course, the COVID-19 crisis, which is having a huge impact on lives across the world, changing how people behave and consume, creating ‘shocks’ of increased or decreased demand.
For business, this is not only hard to manage and bad for sales – as the photos of empty shelves in supermarkets and online recipes for DIY hand sanitizer are starting to show. The bigger risk is that the customers you lose may never return, limiting your future growth potential.
However, we know that some companies are set up to navigate such disruptions better.
Companies who get their core customer and a have an open line of communication with them can respond to market changes in ways that are relevant to their customers. They can more accurately predict their behavior – and they can do it quicker.
Ongoing customer research enabled Instacart to be a first mover in launching “Leave at My Door Delivery” option, giving customers the choice to have a real-time photo of their groceries on their doorstep, rather than a knock at the door.
In aviation the demand shocks are severe. With global flight sales predicted to be down $63bn, one unexpected effect has been to ignite public debate around so called “ghost flights” and climate change.
Industry experts are now starting to ask whether the clashing of two global crises – climate change and coronavirus will prompt people to reconsider travel once the immediate crisis has passed.
Though it’s hard to imagine that demand travel for tourism or to visit family and friends will disappear, the switch to remote work and teleconferences during the coronavirus outbreak has shown that in-person meetings aren’t essential and could dramatically affect business travel.
The longer the crisis persists, the more likely it is that new habits will become ingrained; customers’ changing preferences aren’t likely to go back to pre-outbreak norms.
This is where closeness to core customer groups plays another critical role. Understanding what really matters to customers and delivering it, can create positive, sustainable value which transcends transactional engagement and lowest price.
Of course, price plays a role in constructing value but there are deeper, emotional drivers that motivate customers to buy and, more importantly, build loyalty. C Space research shows that there are five key behaviors that have a positive effect on customer engagement and loyalty, for example making a customer feel smart and proud for choosing your brand.
So, understanding customers deeper emotional reasons for choosing one company over another provides guidance for corporate actions now – and next. When it comes to demand, opportunity exists in change, which can surface emerging and latent desires – ones so new that consumers have yet to express them. As you think about what’s coming next, ask yourself how well you know your customers, and what new norms do you want to create.
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