What is changing for customers and businesses – and which changes matter long term?
We’ve all been talking about the impact that Covid-19 is having on our lives – from 28% of the country suddenly starting to use video calls to 750,000 people signing up to volunteer for the NHS. At Frontier we’ve been discussing what this changing behaviour means for firms’ decision-making now. We can’t predict the future, but we can use economics and behavioural science to consider which new habits might stick (and which won’t). So, we are starting a series to help businesses understand the impact these changes could have in the long term.
Start filtering out the noise with five questions
As a first step, we are sharing a simple framework to help firms grasp how the headlines fit into today’s business planning decisions. Over the coming weeks we will be working our way through this framework, tracking changes and testing which of them could outlive the current crisis.
As firms address these questions, there are some key considerations to keep in mind:
- What is changing?
- Track the data. We are all experiencing this crisis ourselves – where can we avoid availability bias creeping into assumptions and ideas by sticking to facts?
- Look at different groups. For example, for whom is online grocery shopping an extension of existing behaviour, and where is it genuinely becoming a new habit?
- Will changes last?
- Consider how context is impacting the way people behave. Is volunteering going up partly because we have more time on our hands, social proof is in the news and easy options are available? Will these things continue?
- Think about the long-term economics. Will groceries still be delivered for free when delivery costs need to be covered?
- Does it matter for decision-making now?
- Look at competitors. What are others doing now that will affect competition after the crisis?
- Test where you are a “change maker” or a “change taker”. Can online retailers “teach” customers to accept wider delivery windows and slower confirmation of a more precise time?
- How can we monitor the direction of travel?
- Find the gaps. Do you know which current/target customers are doing things differently and are sticking to their new habits?
- Expect things to change. What will happen to the number and length of meetings as employees adapt to working from home after the initial spell away from the office? What about their energy and productivity?
- How does the broader context shape this?
- Create scenarios. How will a recession impact consumer spending in your market?
- Include those low-probability, high-impact events. What needs to be put in place now to reduce costs long term?