The Covid-19 pandemic has thrown a wrench into everyone’s plans. Business owners thinking about growth and scaling up are today worried about their mere survival. And the hard truth is this – the worry today is not just about surviving the pandemic. It’s about recovering from the economic depression that this crisis has caused.
These tough times are an opportunity for business owners to take a look within and innovate. For this, there is a lot that regular small business owners can learn from tech-heavy businesses on how to grow lean and minimize overheads.
Here are four pointers.
Change Your Pricing Strategy
One of the key characteristics of the SaaS business model is the recurring pricing structure. Typically, SaaS businesses charge a monthly or annually recurring fee from customers for access to their products.
The reason this works is because it creates a predictable income stream to the business that has relatively lower churn rate. For the customer too, this is beneficial since it creates a predictable overhead.
In his book, “The Automatic Customer”, author John Warrillow talks about creating a subscription business in any industry. He argues that customers are by nature fickle. Also, markets shift all the time with competition always breathing down your neck. With a subscription model, small businesses can rest easy knowing that a larger chunk of their customers are likely to stay with them for the course of the subscription period.
The subscription model can be applied to any industry where there is a recurring event. Salons, for example, can offer an annual membership that entails customers to any number of haircuts or trims over the course of the year. A lawn mowing company can offer subscription services that offer a cheaper, regular mowing alternative to regular mowing services.
Tracking & Monitoring
A big reason for low ROI on your sales and marketing campaigns is poor visibility on how your money is spent. Online businesses invest heavily in analytics that gives them a highly accurate view on where every dollar is spent.
This is true not just for ad campaigns or tracking visitors. Simple tasks like reaching out to prospects are integrated with email tracking tools that give an accurate picture of the open rate and click rate. This is a goldmine of information that can help businesses tweak processes to improve efficiency.
One of the many ways that online businesses keep efficiency high and operational costs low is through automation. Automation allows a business to execute repeatable tasks with software scripts that do not need human intervention.
For example, a sales team in a small business unit may spend a good number of hours each week on reaching out to new prospects and following up with old ones. Cold email outreach and following up is a classic example of tasks that can be automated – this frees up hours that can be deployed more productively.
Use the Power Of The Network
Online businesses, particularly SaaS, overwhelmingly rely on the power of the network to make sales. This includes the use of referral and affiliate programs to incentivize users to sell the product for you.
A large portion of small business revenue is made through word of mouth referrals. With affiliate programs, you can create new incentives to customers that hitherto did not have any. This will help you with accelerating this inbound source that can be heavily profitable.
So how do you get started on this? The good thing here is that launching a website does not cost thousands of dollars like it used to. With services like Wix, PageCloud and SquareSpace, you could launch a website this evening for just a handful of dollars.
There are affiliate networks that businesses could sign up for as little as $50 a month. You could also launch a reseller program that not only helps you scale up, but can also provide you with an additional recurring income stream.
In effect, you could have an affiliate program up and running in no time thanks to the tools available in the market today.
We have barely scratched the surface with respect to the lessons that small businesses can gain from modern digital businesses. It’s up to you now – what other lessons do you think are applicable for today’s small businesses? Share them with us in the comments.