Strategic planning in turbulent times

As the business environment continues to change rapidly, many companies are looking for new ways to evolve and make the most of this year — and next. While the current, uncertain economy may make planning more challenging than in recent times, slowdowns can provide an opportunity to rethink and refine your business, so you can emerge stronger and more profitable than ever.

“Business owners are accustomed to meeting challenges with resiliency and creativity. This extraordinary year is putting their ingenuity to the test,” says Jack Murphy, President of Business Banking at Citizens. “As I speak with businesses in our community, I’m impressed by many companies who are taking the initiative to sharpen their focus during these difficult times. Innovative businesses view this time as an opportunity to reassess, evolve, and improve every aspect of operations. Their commitment will enable them to emerge stronger and more resilient than ever.”

Create a strategic plan for your business by looking at each of the areas below.

Marketing

While the principles of marketing have remained constant, the tools available to communicate the benefits of your offerings have evolved in the past few years. Now can be a great time to assess how well your messaging is aligned with the needs of your audience — and how effectively you’re carrying that message to them.

Specifically, think about your:

• Message: While your communications should be consistent, so that your audience knows what differentiates your company (e.g., high quality, broad selection, great service, etc.), you also need to make sure you’re attuned to the current situation. For example, if your business model relies on high quality and premium pricing, you might consider letting your customers know that you can also provide some more affordable options during this downturn.
• Media: Are you using the best channels to reach your target audience? For example, are you using email and social media as effectively as you can? Test different media to see how well they perform, including online tools like paid search or an email newsletter. Or, you might use direct mail or other, more traditional tactics. One silver lining of this downturn is that some media costs have come down, so testing new ways to reach your target audience may be more affordable than in the recent past.
• Segmentation: What are you doing to keep — and sell more — to your best customers? Do you even know who they are? If not, assess your customer records to identify your most profitable buyers. They may not be your biggest customers; for example, you may have regular customers who don’t cost you a lot in customer service, returns, or special orders. Once you know who your best customers are, think about how you can keep them on board through outreach, such as an email newsletter or special offers. Knowing who they are also allows you to market to more people just like them — for example, through targeted social media.
• New markets: Is it time to consider expanding the markets that you sell to? While the U.S. economy is currently in a slowdown, other areas, such as parts of Europe, are rebounding. You may not need to look overseas to expand; depending on your business, growing your footprint may mean opening a new location a few blocks away or selling into a new state. But, don’t let your current territory define where you consider offering your products and/or services.

Products and services

Changes to the economy, consumer preferences, technology, and other factors create new opportunities for your company. As part of your strategic planning, determine how you can pivot, partner, or innovate to maintain your relevance and appeal.

Think about your:

• Market awareness: How well do you know what your competitors are doing and what your customers and prospects want? If the answer is “not very,” consider conducting research into their needs. This doesn’t have to be complicated or expensive; it can simply mean handing a preprinted card to your in-store visitors to ask about their preferences, calling some customers or prospects, or using an online tool like SurveyMonkey™ or SurveyGizmo™.
• Offerings: Is what you sell aligned with the needs of the marketplace today? Are you evolving your offerings to stay competitive? Is your pricing consistent with customer preferences and your cash flow requirements? Consider making adjustments to your business model to better serve customers today. For example, can you move any (or more) of your offerings online? If in-store visits are challenging, can you adopt curbside pickup or an appointments model to maintain foot traffic?
• Partnerships: Is your best strategy to go solo, or are there partnerships that can help you grow your revenue? For example, some neighborhood businesses have banded together for promotions of commercial districts. If you’re a cheese shop, you might partner with a wine store to create boxed wine and cheese gift packages. Or, if you’re a graphic designer, you might partner with a web site developer to take on larger projects that neither of you could do alone. Think about the services that complement yours that you could offer to boost customer satisfaction and sales.
• Product profitability: If you haven’t conducted an assessment recently, now could be a good time, especially if what’s selling is changing. The 80/20 rule may well apply to your business, where 20% of your products account for 80% of your profits. Are there products you can eliminate to become more profitable? Can you boost pricing on any of your bestselling products? Are there ways to cut expenses from them?

Sales

It may be more challenging now to do sales forecasts than in the recent past, but setting revenue or sales goals is an important part of any business-planning exercise. Be realistic, but also try to stretch a bit to spur innovative thinking.

Think about your:

• Sales approach: How do your customers first learn about your offerings? How do they conduct research and make a final purchase decision (if that’s your sales process)? Are there any points along that path where sales can be more involved (to expedite sales) or less (to cut sales costs)? With face-to-face meetings off the table for the foreseeable future, how are your salespeople or partners connecting with prospects?
• Sales leads: Are your marketing efforts generating enough quality leads to keep your sales team profitable? If not, assess the tactics that have brought in your most profitable customers and increase those, while dialing back the tactics or sources that bring you overpriced, slow-to-close, or otherwise low-quality leads.
• Sales team: Are they aligned with your customers and educated enough in your offerings to present your business case well? Is it time to reevaluate the size of your sales team headcount, training, compensation structure, or hiring plan?
• Sales channels: Are you selling in the right places? You may be selling purely in your own locations or through your own site. Are there other outlets you could use, such as other stores or online venues to sell through? Does it make sense to consider an affiliate model where you provide an incentive for third parties to sell your products? Depending on your business, you could even consider franchising your business, or acquiring a competitor or partner.

Technology

Doing more with less to increase efficiency is a key success factor right now. Finding tools to automate manual tasks to save time and cut down on costly errors will help you move quickly toward your goals.

Some of the most common application areas to assess are:

• Accounting/billing
• Analytics
• Collaboration/conferencing
• Customer service
• Expense management
• Office productivity
• Payroll/benefits administration
• Sales/marketing automation
• Security
• Storage/file backup
• Workforce scheduling

Cash flow and financing

Healthy cash flow is essential to attaining your goals. Devise a cash flow management approach that’s aligned with your current situation — you may need to monitor cash flow more closely than usual. Also, line up financing to get you through dry spells.

Think about:

• Your expenses: For example, can you renegotiate your rent, revise your insurance coverage, sublet part of your business space, or find less-expensive suppliers? Are there tasks you can do more cost-effectively in-house?
• The financial management tasks your company does in-house. Can you boost efficiency by using productivity tools such as payroll, benefits administration, retirement, or other applications or third parties?
• The financial support that might make sense for your company. Speak with your business banker about the most appropriate tools for you to attain your objectives.

Ready to take the next step?

Download the Small Business Guide to Resiliency to the New Normal to get tips on how to navigate your business during the coming months.