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Crises scenarios and recessions are tough to navigate, but seeking ways to increase the value of our product offerings is the best way to survive the hardship. It sounds easy to say, but people frequently report coming up short when they sit down to brainstorm.

We’ll begin with an overview of the PIVOT approach that helps you do just that, and follow with some expansions on the concept of zeroing in on trouble areas that sap your revenue potential.

P – People. Remembering who we are here to serve. We can get too wrapped up in our products and services, what the features of each are, etc. But all of that is too inwardly focused, and it’s important to remember that all of what we create and offer is geared toward our audience.

When things get hectic it’s easy to lose sight of that audience, but our messaging and culture are at their best when we stay focused on people.

I – Inquiry. Asking the right questions. What are they going through? We can’t fully provide value and address needs if we’re not conscious of the head space of who we are talking to. It’s easy to think we have this dialed in, at least superficially, but we need to go deeper than that.

V – Value. How are we delivering value and how are we improving their life today? Particularly in times of crises it makes sense to shift from a more sales-oriented approach to a focus on being useful to your audience. When they feel you’re serving them, particularly in tense scenarios, your perceived value increases significantly — as does trust.

This can guide content we create — whether that means social media posting, blogs, videos, or even ads we create.

O – Outreach. How are we reaching these people? How are we finding them where they are? This often involves finding creating ways to attract attention without being obnoxious. This will vary month to month and is situational; what makes sense in a given circumstance may no longer make sense a week later when things have changed.

For instance, during the quarantine a lot of companies are relying heavily on email outreach to pitch to people, but it’s become totally overwhelming. Not simply because each individual company is emailing too frequently, but also the cumulative effect of the sheer number of companies sending emails becomes a real intrusion into the inbox.

The result for many is to simply tune out, making email communication irrelevant.

T – Trust. We must trust ourselves in order for others to trust us. But this is deeper than simply meaning a trust in our abilities, and also means a trust in the process and that ultimately we will end up where we need to be. Operating at our best potential is just as much about staving off fear, since fear is paralyzing for creativity and finding solutions.

Eckhart Tolle talks about the value of the pause, of checking in with ourselves, and how that helps to overcome the ways in which we get jammed up in our own thoughts. He gives an example of putting focus on parts of our body, on knowing that piece of the body is there without looking at it. How do you know?

The feeling that answers that question changes our mind’s focus. He says it’s not possible to have a complex thought for more than a few seconds while the mind is focused on the body in this way, and the interruption in the common sense of living in our heads is a change of gear. It’s the case that once a stream of thoughts is interrupted, it goes away altogether (at least for a reasonable amount of time) and its negative effects go with it.

If we’re feeling anxiety or fear that is hanging us up, this can be a simple way to shift and return to a freer mental space.

What PIVOT looks like in action:

This quarantine is a prime example of the PIVOT principle in action. Look at businesses everywhere. How are people now handling meetings primarily?

Meetings have shifted to video conference calls rather than perhaps meeting in board rooms or coffee shops. This same concept is consistent in all sorts of industries.

Restaurants have maintained business by offering delivery or curbside pickup as alternatives to the typical ways customers come get food from those establishments.

Consultants have shifted to webinars, video chats, or even online courses in an even greater sense than they had before, all to meet the needs customers have in a scenario where meeting in person isn’t viable — either because of geographical distance or social distancing driven by national situation.

The most important part of this is not to stagnate.

Business owners are tempted to hunker down and “ride out the storm” in crises. While this may seem rational at first blush, it actually leads to invisibility, potentially losing customer base, or even creating a negative perception in the audience that is hard to walk back.

(E.g. is the sudden lack of visibility seen as abandonment?)

Businesses can see a recession scenario as an opportunity to reach people in new ways, which is the ideal way to “ride out the storm”.

Calculating a customer’s lifetime value:

Take the average purchase amount per product and weigh that against how many times a customer will buy that product. ($ per item x how frequently they buy that item.)

For instance, if you are selling a coffee mug for $12.99 but a customer is likely to only buy one per year, the lifetime value of that given customer is $12.99. The primary ways to improve this are these:

  1. Find a way to market other products to that customer so they’ve invested more than the initial $12.99 into your business. (Is this customer also potentially interested in 1-2 other products you offer, but they need to be told about them more effectively in order to buy?)
  2. Alter your product offering to a format that encourages more frequent purchases. If there’s a way to encourage a customer to buy 2 of your mugs per year, and if you have a moderate success at this within your customer base, that could be a much bigger bump in revenue than adding a few new customers.

This can also be an opportunity for some quick wins in your business from a revenue standpoint. Read more about this concept here.

The powerful effects of improving customer lifetime value:

Another example would be a medical office, such as a chiropractor, that sells therapy programs that involve ongoing visits. If the ideal lifetime customer value requires 13 visits, but you find that customers on average are only coming 10 times, you are losing the value of those other 3 visits.

Rather than investing time and money into simply acquiring more customers, you could also generate some meaningful revenue by addressing WHY those customers aren’t staying for the full 13 visits.

Is it an issue with the perceived value of your service? Is it a rapport thing that can be corrected with bedside manner? Could you implement loyalty/rewards programs in your business to encourage customers to keep coming back?

Any of these approaches, if successful at increasing average return business per customer, can make a big difference in overall revenue. An old business truism that is very much at play here is this: it’s usually less costly to hold onto existing customers than to find new ones altogether.

That’s because someone who is already your customer knows you and is familiar with your products or services. If it’s been a good experience and there is trust, this is a warm market that is much easier to engage with and offer things to than someone who has never heard of you.

And if there’s an issue that is damaging trust and rapport, something responsible for the fact that customers are falling off more quickly than your calculated ideal, it’s a MUST to address that issue. You’ve likely heard the analogy of pouring water into a bucket with a hole in it — if you don’t address this issue this will be exactly what your sales cycle is like.

You’ll always be hunting for new clients, always feel very busy and possibly suffer burn out, because you can never count on longer term clientele.

Even finding a way to prolong the average customer lifespan by 25%, multiplied on average throughout your entire customer base, can be enormous to your bottom line.

Coordinating with your sales team.

More often than not, issues with customer retention involve a disconnect somewhere between the sales process and the delivery of service. But from the operation standpoint it can be nebulous as to WHY that is happening.

You might be aware that a lot of customers drop off or fade away after a certain point, and you might see that it’s pretty consistent, but that consistency doesn’t necessarily mean the cause is clear.

Talking with your sales team can be illuminating. After all, they are the ones interfacing with your customers first, meaning they hear customer concerns, points of reluctance, and even what specific points made the customer comfortable enough to move forward.

What makes a customer say yes?

In short, the sales team has a lot of insight into what value your company offers is most attractive to customers. When you compare that data against internal procedures and subsequent communication with customers it can highlight where that value wasn’t delivered.

It might even tell you that your original assumptions of ideal average customer lifespan were unrealistic.

That may result in raising or lowering prices, finding ways to be more efficient at delivering the service (less of your time), or even shifting focus to a different service that ends up being better at creating that sense of value to customers.

Key takeaways:

  • Focus on discovering what value you’ve provided your customers that is most important to them. (Value they perceive, which is not necessarily the same as the value you assumed you were providing in the beginning.)
  • Wherever possible, find ways to market to your existing customer base to either increase how many times they buy from you on average, or prolong the span of time they continue to be a customer.
  • Shift your focus: be less concerned on always generating new sales and become more conscious of longer term relationships. (It’s cheaper to keep clients than it is to replace them.)
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