Change or transformation? How do you know which way to go?

The story of this week is about a time when in one famous industry change was not enough anymore and they needed to go through a transformation process. The two biggest players in that industry were actually not doing anything wrong, they had a fail proof system for decades and everything was going more than ok, alas the market and their customers took a sudden turn at some moment and being the massive entities that they were, it was very hard to make as sharp of a turn so quick.

For years they were going forward because of inertia gathered in decades of successful business but it was becoming clear that small changes were not enough at that point. The transformation process took years for both, internal teams, external consultants, redesigning processes and procedures, reallocating resources and moving people around.

Of course the transformation will still need time to complete, the culture inside is still fighting hard to get back to what they know best, but I am sure that the reinforcements and anchors we left in place will assure they go in the right direction, even if not at the speed we hoped.

This story is about understanding that no matter how big you are, how many client you have and money you make, when the time comes you need to be prepared to transform in order to stay relevant, otherwise you will only join a group of famous stubborn companies that disappeared in the past.

In order to understand what a trigger to transform looks like you just have to look at the year 2020. And how the reaction between companies and clients transformed. For a long time the sales strategies, but also the buying behaviours of the customers were suspended. Relationships built over time, loyalty programs, special packages or brand loyalty have all been called into question by uncertainty. In order to counter the effects of the shock that the whole planet was going through, companies, but also customers started looking for solutions to keep a sliver of normality. Thus, after a week or two in which we were all brave, we moved on to chaotic and even a little desperate actions in some cases, to avoid complete disaster.

When the terrifying lockdown was abandoned, whose epigones in various forms have haunted us to this day, we understood that we needed to build different approaches. After two months locked in the houses, the priorities and especially the desires of our customers have changed and it is the role of the seller to transform the way the interaction takes place to restore the lost connections. As in any true thriller, we experienced the following scenario – we understood that it was a difficult situation, we knew what transformations were needed, but out of fear, resistance to change, or whatever reason we found each of us, we got stuck.

Many of us chose temporary, safe solutions, we offered customers freebies, bonuses, discounts, we made very advantageous packages. In the long run, if this is the new commercial normal, the customer will always want reduced, free, bonus. Temperance is needed. But I forgot what was most important - especially in difficult situations, sales is about the customer. And the best answers come from him.

The easiest thing for us was to make small changes in the hope that at some point everything would return to the normal we knew. But we made the changes as in Caragiale's work - "to be revised, I accept! But let nothing change; or not to revise, I receive! but then let it change here and there, namely in the essential... points". It was perfect to have understood that there was a need for transformations as big inside the company and in the way we do business as there were at the global level. We can no longer solve it through changes, we need transformation. In addition to the transformation of business, an organizational culture is needed to support the implementation of a new strategy.

Two of the most visible changes were moving sales online and restaurants switching to delivery to save what they could. We saw a 32% increase in online sales in 2020, but not enough growth to cover the overall decline in sales. Those who were active online anyway will enjoy keeping some of the increased turnover. Those who have turned to online temporarily to save their business will be happy to return to "business as usual" at the first signs of relaxation. The customer experience, but also the commercial differentiator, in many areas, cannot be moved online. Maybe they will keep the online channel active as an alternative source of income. Online has saved many organizations from disaster, but in order to be the new majority way of making sales, it is necessary to transform the habits, the organizational culture, but also the buying behaviour of customers. Transformations like this take a few years and I don't think online will be the overarching solution in the long run, not yet. Many companies want the customer to return to stores, restaurants and cafes to regain impulse purchases.

If we take the example of restaurants, the transition to online plus delivery saved business, but the experience of going to a restaurant or café was perhaps only 20% related to food and drink. It's about an adventure, a space, an interaction with people, with culinary stories, and that can't be brought home via delivery. The culture of these companies is based on the creation of experiences for guests, care for the customer, attention to details. The easiest to see was during the relaxation periods when restaurants, cafes, resorts were full and customers returned to their pre-pandemic habits.

Sales remains the engine that drives the business forward. The only way to recover from a more difficult period is to return to the previous level of sales and, as far as possible, to the previous level of profit. To achieve this as quickly as possible we must adapt to the age of the customer. A time when the customer has more and more access to technology, information and makes educated decisions. Add to these elements that now define people's buying culture and the pressure put on by the crisis we are going through, we understand that approaching the customer has become a whole new game. More than ever the story has to be about the customers, learning more about them, their struggles and difficulties, their businesses, their goals and their fears. The need is no longer strictly about products and services, customers expect to receive innovation, ideas, meaning and purpose.

My recommendation is a transformation process built on 4 pillars.

1. Analyse the business environment and how to adapt the strategy.

2. Build a business culture that supports the new strategy.

3. Use empathy to better understand the customer.

4. Learn new sales approaches to reach your customer better.

We need to get back to basics and transform the way we interact with our customers. We need to return to real emotions and empathy. Let's put more emphasis on story and human connections and less on cold information and numbers. We need to shift from a culture focused on product and numbers to one focused on the customer and the experiences we build with them.