My business survived and thrived during the 2008 crash. Why does 2020 feel so different?
Updated: Apr 16, 2020
Late in 2007, I launched a video marketing SaaS platform. It seemed like horrible timing — start a business right before an economic meltdown? Brilliant!
Marketing budgets tightened. Sales teams shrunk.
Tech vendors, channel marketers and resellers who were our primary prospects were desperate. They needed ways to stand out, convey differentiators and keep filling sales pipelines — all with less money.
Ironically, market conditions played into our hands.
Online video was fresh, sexy and (relatively) cheap. Plus our platform did cool things that others didn’t. We could take a vendor's video and automatically co-brand it for each of their channel partners and personalize it for each individual sales rep.
Our platform delivered eVideo campaigns in bulk, then notified each rep in real time whenever a prospect watched one of their videos. All the reps had to do was call the person they knew had watched a video and start up a conversation. Lightning in a bottle.
I looked back at our pricing model from 2007-2010 and had the crazy realization that we used to charge about 10X more than we charge today. But no one complained — it was a great value, because it cost less than other marketing options and it actually worked!
2020 should be an opportunity, right?
You’d think a pandemic that makes people stay home, rely on remote-working technology, and glues them to computer screens would be a major opportunity for an online video platform to make some quick money.
But the reality is more bearish this time around…at least so far. Shelter-in-place orders and economic uncertainties have caused a more noticeable reluctance to buy among businesses owners and execs. Even when a purchase can help them right now.
What’s different this time? Here's my guess...
2008 led to straightforward financial fear. It was touch-and-go for awhile, but once TARP was in place, the banks were bailed out, and the house of cards was still standing, there was a collective sense that the country would pull through and get back to business. And companies resumed spending.
Upgrading technology offered concrete benefits and ultimately lowered costs, so it was seen as a smart business move. (Many of my vendor and reseller clients would go on to have fantastically successful years in 2009 and beyond.)
Today's economic stew is doubly toxic.
2020 has served up a toxic stew combining financial fear (unanticipated business disruptions) and physical fear (life-threatening Coronavirus concerns). Mix in a lack of clear leadership at the national level, inadequate testing data and conflicting pandemic modeling and the result is a severe case of economic indigestion. Business people are feeling nauseated and anxious about the future.
Certain businesses deemed “essential” are thriving, to the extent their supply chains remain intact. But businesses labeled "non-essential" (including high numbers of SMEs) are basically closed. They're burning through cash due to fixed expenses and trying to do right by their employees, but many are teetering on the edge.
Some very well-established channel partners I know are scared and approaching cash flow walls way more quickly than they expected. And many sales reps feel paralyzed, too.
Is anyone buying?
Some large and cash-rich companies are still buying, but suddenly they're in the catbird seat. They know they can bargain hard with vendors who desperately need pending deals to close.
On the flipside, struggling companies have pretty much gone dark. And no amount of sales effort (awareness-building, education or begging) can magically change the fearful mindset of a prospect whose business is cash-poor and credit-strapped.
At this point, many American companies (and employees’ careers) are living or dying depending on the direct cash support they'll receive from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was designed to aid businesses and prevent workers from losing their jobs.
But literally as of today, all the approved small business money has been claimed — over $350 billion of it. And now Congress is wrangling over whether to approve more and how much.
What steps can you take?
Start with this REALITY CHECK: Before most prospects and customers will be ready to invest in new technology again, they need to regain financial stability and their owners and execs must be able to envision success beyond the current pandemic. We all need to be equipped to ride out the period between now and then.
First, get your financial safety net in place to survive the next 2-3 months — put on your oxygen mask (or protective face mask) first!
Next, get creative and do what you can to help your prospects and customers. Do not try to sell to them right now.
Instead, ask yourself, what solutions do my prospects and customers really need right now? The answer isn't likely to be a technology solution you sell, but rather the need for a financial solution. You can provide monetary help to current customers in a variety of ways — from payment extensions, to discounts, to temporary account holds, etc.
But don’t forget to watch developments about the CARES Act and share what you learn with your prospects and customers. The more you know, the more you can be an ombudsman and trusted advisor for them. Help them find shortcuts and encourage them to apply for aid when it's available.
Once you’ve decided how you'll offer help, do some one-to-one outreach via email and one-to-many outreach via social media. Focus on offering 100% help and 0% sales.
I'm looking past the pandemic.
My team and I decided to help (not sell) by temporarily offering free video marketing tools for resellers and salespeople. They get unpaid access to a simple, easy-to-use app, and they can do unlimited one-to-many video outreach using social media.
We know this will cost us now, but there's likely to be a silver lining down the road. We're earning the trust and loyalty of new users as they experience the power of video marketing first hand — during their greatest time of need. By communicating more effectively, they'll elevate their status as trusted advisors.
Get positioned for a rebound, and feel good about it.
History says that COVID-19, like all viral pandemics, will run its course. Now is the time to improve your position for when business begins to normalize.
I'm going to spend the next few weeks of lockdown giving freely and being the best, most generous and trusted advisor I can be. Worrying about other people's businesses instead of my own feels good — it's the right thing to do. And each of us doing what we can to help others gives us the best chance of turning this toxic stew into a heaping helping of good karma.