The ongoing COVID-19 pandemic has disrupted and devastated many businesses across the U.S., with permanent closures now accounting for more than 50% of all pandemic-related business closures, as reported by Yelp. The main reasons for these closures include a significant reduction in demand for products/services, as well as workers’ concerns about safety and health. However, there are several crucial COVID-19 business lessons to learn from these closures.
Here’s a look at five important COVID-19 business lessons.
1. Business Agility and Mobility
To stay ahead of the threats posed by a pandemic, you need to think and act fast. This means your business should always be ready to re-deploy and restructure its resources on time. This is particularly important because it will allow your business to reinvent itself and adjust to its new environment with relative ease.
2. Loyal Customers are Assets
It costs much more to acquire a new customer than to retain an existing one, and this cost has increased by over 50% in recent years, as reported by HubSpot. Customer acquisition costs include advertisement costs, promotional expenses, pricing incentives, and online expenses. Generally, retained customers can help boost your business in times when the demand for products goes down, such as in the COVID-19 recession. For this reason, make sure to have active customer loyalty programs to reward customers and retain them.
3. Your Website Should Always Be Functional
The rate of online shopping in the U.S. has gone up during the COVID-19 pandemic, with the online buying of jewelry and accessories increasing by 15% each, as reported by Statista. Since online shoppers need to access your online store to order products, your website should always be in good shape. Many online shoppers are more likely to continue shopping online even after the pandemic, thanks to the convenience that it offers. Therefore, ensure you ease their online shopping experience by regularly updating your website, improving user experience, and making it appealing.
4. Invest in Cyber Security
If you are an online-based business, your business will likely suffer at least one cyberattack incident over its lifetime, says the U.S. Government Publishing Office. Considering cybercrime costs the U.S. economy up to more than $100 billion annually, cyberattacks can equally send your business into financial turmoil. With the rate of cybercrime increasing in the COVID-19 recessions due to the increase in telecommuting, your business is at risk of data breaches and malicious attacks. A strong cybersecurity system can come in handy in protecting your business against such losses. Take note that cyber liability insurance should also be part of the cybersecurity system of your business.
5. Have a Feasible Business Recovery Plan in Place
According to the Foundation for Economic Education (FEE), virtually 60% of businesses that closed in the U.S. during the COVID-19 recession will never reopen. This is because of the substantial financial damage that such businesses have experienced. As an essential business lesson for possible future interruptions, you should always have a viable business recovery plan in place. This will help your business survive tough economic times and bounce back after a disaster. A good recovery plan covers the possible risks and includes frameworks to either mitigate risks or cover any resulting damage. For instance, purchasing the right business interruption coverage can help a great deal in reviving your business after a disaster.
Use these COVID-19 commercial lessons to prepare your business for a disaster. Proper commercial insurance is also essential to protect your business from unexpected incidents. For assistance with all your coverage needs and questions, contact the experts at Knight Insurance Services. Our dedicated team is eager to assist you with all your coverage needs today.