Post Covid-19: SMEs new mantra – business model innovation, brand building and digital marketing
Rajesh Radhakrishnan June 7, 2020
CMO, Vritti Solutions
MORE IN Marketing
Covid-19 crisis has created a big wake-up call for the SMEs. Today, there is a severe supply chain disruption in the world due to lockdowns and liquidity crisis, which has resulted in the under-performance and shut-downs of many SMEs. In such a scenario, Darwin’s rule of ‘Fittest will survive’ can be best applied.
The government understands very well that SME’s are the engine of our economy. Only they can make the country ‘Atma Nirbhar-Self reliant’. Hence came the most significant announcement of granting 3 lakh crore collateral free or Guarantee free loans to SMEs to tide them out of this crisis which means not a single MSME unit needs to pay any collateral or guarantee for the loans availed under this scheme.
All these benefits will help only if there is a big change in SME approach to his business.
SMEs typically create innovative products but what they lack is marketing skills. They need to take an effort in knowing the client better, segment and focus on right markets, differentiate the product properly, establish communication according to segments and hit the right TG at the right time.
All this is possible for an SME in a cost-effective manner through Digital Marketing. Those SMEs who would focus on the aspects of innovation, digital marketing and brand building are best positioned to come out successfully in the present scenario. Gone are the days when only the big players best adopted digital marketing. Post-Corona every SME needs to implement Digital marketing initiatives, and only those SMEs which are adaptable and agile in implementing it will be able to survive and grow.
Its high time that SMEs will have to re-strategize their Business plans by incorporating all the three ingredients of Business model innovation, Digital Marketing and Brand building.
Business Model Innovation:-Interesting business models could further evolve if the SME understands the pulse of the market. Take the example of a typical retailer-distributor relationship. The retailer gets a 30-45 days credit from a distributor. However, because of the lockdown and liquidity crisis, the money of the distributor is stuck. Many products are left unmoving at the distributor level. In such a situation, the distributor could think of reaching the consumers directly through customized digital promotions and e-commerce. Credit sales model could be easily avoided, where instead of giving a three-month credit to the retailer, the benefit could be directly passed to the consumer through offers or discounts. In another new model, instead of the retailers, the distributors could tie-up with banks or finance companies to create offers via EMIs for the consumers.
Brand Building:-For example, the behaviour to use sanitizers, hand gloves and masks are going to become a permanent behavioural trait in the society, even if Corona is eliminated in future. It’s not only important that an SME manufactures better sanitizers, masks or gloves by better design but more important is “The Change of mindset from transactional approach to Brand building approach.”
Digital Marketing:-For every ten distributors, there are 1000 SME retailers. The SME retailer typically thinks that marketing is the responsibility of the manufacturer, and his job is only to fulfil. That may not hold post COVID scenario as more than half of the retailers would find it tough to sustain, if they do not innovate. Post-COVID, a retailer will have to think of innovative models of getting close to the customer, which could be achieved best with digital marketing, and data analytics and CRM tools.
SMEs should focus on implementing “KYC-Know Your Customer”. The more you know information about your customers, the more are your chances to succeed. The data analytical tools could be linked to the CRM system to get beautiful analytics about your customers’ preferences. The customers could be accordingly targeted with customized social media campaigns, SMS and e-mail marketing and other tailored solutions. Retailers should think based on 4Ps of marketing, i.e. product, pricing, place and promotions come up with unique campaigns through digital marketing in e-commerce space. The customer should get quality products economically.
Implementation of CRM by SME, whether in B2B/B2C space could be used to lower cost or improve profits. It can be best used to identify key target groups, who have got the money or can spend the money in today’s situation.
For example, the IT sector has not been much affected by the COVID crisis. So if you are a consumer durables retailer, CRM-Digital marketing combination could be utilized to target potential customers who are employed in the IT sector. So a mass targeting can be avoided, and sharp shooting of the TG can be made best possible here. One needs to identify the right TG segments, know their requirement and come with the best possible solutions with proper promotions.
The liquidity situation is tight in the economy. So money needs to be used judiciously. So within available resources one needs to come out with products and ideas which will help you make inroads into the mind of the consumer. It has to be chalked out – what is happening to my customer, am I capturing every aspect of him, who has got money? Who would buy what – and how could one effectively reach him to avail of effective results. What best could be done for referral leads? What about loyalty programs etc.
Post-Covid SME players across sectors such as manufacturing, services, logistics, supply chain, ware housing, real estate, education marketing etc must unlearn and quickly learn this new mantra.