Just as digital disruption was once the biggest threat for established companies across the globe, the rapid rise of uncertainty and volatility in 2020 has created a new paradigm for business — something we refer to as the ‘Flexi Economy’.
Prolonged levels of extreme uncertainty have created new consumer expectations, and those businesses who don’t offer flexibility as a key part of their product will be eclipsed by those that do. No longer are we suffering the social anxiety of FOMO. Ever-changing restrictions and snap lockdowns have created a different social angst — a fear of making plans. This is highly prevalent amongst future “booking” purchases like air travel, holiday accommodation, and tickets to events.
Rapidly changing government guidelines have meant that at any given moment we could no longer travel, dine out, get married, go into the office, or gather in large groups. Our plans were abolished, then re-made. We cancelled and rebooked — and we soon learned just how elastic our lives could be. We also discovered that many companies didn’t have policies that supported this type of elasticity. Yet.
This has presented businesses with a clear challenge: Flex or Fold. Cancelling plans is disappointing enough but losing money when things change is no longer an acceptable risk for customers to take.
Here are some things you can consider in order to build more flexibility into your business:
The flexibility overhaul.
Once a consumer has experienced flexibility in the purchase of a product or service, it’s unlikely they’re going to want to give it up easily, so it’s in the best interests of business owners to run the numbers on what offering total flexibility would look like for them. This could mean relaxing refund policies for reasons additional to pure quality issues (like change of mind or change of circumstances), removing hefty penalties for booking cancellations, waiving of change fees, or simply allowing bookings to be transferred into full credits on future bookings. This is an opportunity cost analysis — if your competitors are offering these things, how many sales are you missing out on?
Bring in a third party.
Fully overhauling your goods or service offering can seem daunting and thankfully there are many “bolt on” solutions that can bring flexibility to a business’ offering with lower risk. Buy now pay later (BNPL) services are very popular right now and they allow you to provide something to a consumer that wants to pay later, without having to mess about with payment collections or layby services. Providing a mechanism for trade, barter or gifting is also a way to avoid cancellation requests and this can include the provision of resale marketplaces for things like event tickets and the simple ability to change the name on a booking, such as a flight, to someone else.
Think outside the box.
When circumstances outside of your control impact your business it’s important to also be flexible in thinking about how you reach your customers. We saw many hospitality businesses turn on a dime to offer takeaway meals and drinks when in-house dining was impacted by rolling closures due to lockdown. Some of Melbourne’s best chefs and restaurants turned to companies like Providoor that helped them integrate an experiential element through the delivery of partially prepared meals, requiring customers to heat, dress and plate up the meal.
COVID has created a natural tension — we desperately want to put our dollars towards things we can look forward to but need flexibility in order to commit. Businesses that can recognise this and quickly adapt their offering to suit a consumer that is hesitant to spend their money will be the ones that succeed.