Your business’s identity plays an important role in how you connect with your customers. In desperate times, like during the depths of the COVID-19 crisis, many consumers changed how they shopped. Now that the economy is reopening and shopping and purchase decisions are normalizing, you’ll need to think about how you can rebuild your market position back to what it was before the crisis.
Here are a few areas that can help you rebuild and readjust your business’s market positioning.
Pricing your products and services: easy to lower, hard to raise
Pricing is always one of the most important parts of any consumer decision. Customers may think that their beloved brands, the feeling they get from using them, and the way their products/services function are what drive their purchasing decisions. But the truth is that without a reasonable price, they would never make it to checkout.
During COVID-19 a few things happened to pricing throughout the economy. First, businesses halted their pricing increases and, in many cases, lowered their prices. For goods and services targeted at low to moderate income customers, prices were reigned in as much as possible. Second, businesses hastily rolled out substitute products and services that could be delivered remotely at a much lower price than their in-person alternatives. Many did this out of necessity as their business simply couldn’t function in a world with social distancing.
Now that people are returning to stores and other gathering places, you need to make a decision about how you’ll re-establish your pre-COVID pricing. Why? Because your costs never really went down by much, and they’ll certainly bounce back once the economy is fully reopened.
How can you raise your prices? It can be very difficult. For example, streaming service Netflix decided to raise their prices in the early 2010s but had to quickly backed away from that decision as users threatened to leave the service. That’s because big price increases without a justification causes customers to look for alternatives.
If you plan to raise your business’s prices, how will you justify it with changes to your offering? If you switched to online-only and now are switching back to in-store, is that enough to justify bringing back your prices to their pre-pandemic levels? Take some time to assess:
- what you sell
- how it benefits your customers
- other ways it might benefit your customers that you can take advantage of, and
- how they access it
You can use this type of analysis to propose new values to your customers so that the pricing changes don’t seem unjustified.
How can you rebuild familiarity with your brand?
If you feel like your business has fallen off your customers’ radar, it probably has. Brand awareness and familiarity are the two biggest factors that lead a customer to jump from “considering a purchase” to “completing a purchase.”
Marketers typically describe marketing activities as those that have either a “low conversion rate/high reach” or those that have a “high conversion rate/low reach.” As an entrepreneur, and especially during the COVID-19 crisis, you’ve likely been focusing on the first of those two.
Now that economics are changing, you need to make a big effort to expand your reach through marketing. This mean you may be using marketing tactics that might not convert directly into customers today, but will build your customers’ awareness and connection to your brand. Invite customers into our stores for event, get involved in the community, and produce online content that demonstrates your unique expertise.
After a year of physical separation from your customers, now is the time to have in-person interactions that will remind them about your business.
Conduct a gap analysis for your business:
Resuming normal operations after COVID-19 is a good opportunity to assess your business situation. This is called a gap analysis, and you likely conducted a similar assessment when you started your business.
First, take a close look at your customers. How do they define “quality” in your industry? What attributes makes products and services functionally and emotionally “worthy” to them?
Next, take a look at your competition. What competitors survived the crisis, and what products or services are they putting on the market now?
By gathering these two sets of information you can draw a clear line between what your customers truly want and what the marketplace is offering them. Any way in which customers are underserved is an opportunity for your business.
Once you map out your competition versus how your customers perceive value, see if there are any opportunities to be the option that has a high perceived quality. Perhaps you can offer something at the same level as the premium brands in your category, but at a price that’s slightly or moderately more affordable. This is the position with the strongest value proposition for your potential clients.
Start rebuilding your market position today
Resetting your business’s positioning doesn’t happen immediately. Most brands wish that they could simply pick up where they left off before COVID, but the reality is that you need to reshape your customers’ understanding of your brand. This requires a lot of work, but it can also create new opportunities and the potential for your business to be repositioned in a way that might be better than its position before COVID.
If you need funding as you work on your market positioning, Pursuit can help. We offer more than 15 different business loans to help you keep moving forward. Reach out to us today.
