…and How to Adapt

Let’s talk about habits.  There is an excellent book for franchisors and small business owners to read to learn about their customers behaviors– The Power of Habit by Charles Duhigg.

In the book, Duhigg explains, “Habits emerge because the brain is constantly looking for ways to save effort. In another word, the brain will make almost any routine into a habit because it allows our minds to ramp down more often.” Habits often form without permission or intent.  They are powerful because they are neurological desires.

To create a new habit, a consumer combines a cue, a routine, and a reward. Habits are so hard to “break” because of this very process.   Duhigg goes onto explain that you can’t break a habit, only change it. The desire for the rewards doesn’t go away, only the process to achieve it.  This is a powerful statement when we talk about how consumer habits will change due to COVID-19.

The cues and rewards consumers had before the crisis will still exist. 

The cues and rewards consumers had before the crisis will still exist.  Keep this in mind as you read the many (there are many) articles that discuss changes after the COVID-19 crisis.

Let’s walk through an example.  A cue may be a desire to eat, or hunger.  The reward is taste satisfaction and stomach fulfillment.  How will the process change?  Remember, the brain is looking to save effort, therefore, won’t devise a process that is notably more complicated. 

Will consumers now eat more at home? Maybe, if they like cooking.  Will they eat out as much as they used to? Yes, if they perceive the food to be safe and have the same financial means. Will consumers carry out more? Possibly.  Will they eat continue to eat in restaurants?  It depends on if their value structure craves social fulfillment.

Another reminder about habit – routines developed are the easiest path with the least amount of risk.  Take a look at Uber.  The service is easy and has almost put cabs out of business.  However, is it the easiest?  Maybe not.  Hitchhiking is probably easier. Yet, hitchhiking has risks inherent that most of us are unwilling to accept.  As people come out after COVID-19, the desire for the easiest path with the least amount of risk won’t have changed. What will change is what people perceive as a risk. 

I discuss this theory to highlight that any article mentioning changes in consumer behavior must be put through this test.  Consumer changes are hard to predict. It’s not as easy as assessing a situation and then determining how you think people will react.  The people side of the equation must be considered, even more than the situational aspects.   

There are three consumer habit changes I see in the press often that I think are more valid than others. Let’s discuss each and how businesses and franchisors can shift their strategies and tactics.

Customers Will Re-Engage with Brands Online and Through Email

Iterable has found that email open rates have increased by 21% during COVID-19.  Customers have always desired to be in the know with brands they like.  This “cue” has not changed.  However, the process in which they receive this information has.  They used to be able to stop in a physical store, but they can no longer do that. 

As we move forward, customers are now more accepting of communication from brands online.  Instead of clicking “spam,” they are clicking “open.”  Brands need to rethink how they are communicating with customers. Where possible, brands need to be directly pushing sales through these communications.  For instance, if you have a restaurant, email our specific deals with a button to order right away. 

Think about this – Convey, a provider of Delivery Experience Management software, found that nearly 70% of customers said they want more communication, 86% said it’s ‘important’ or ‘very important’ for retailers to tell them when an item will arrive.  When was the last time your small business or franchisees sent out communication about a new product or offer?

Emphasis on Local

While most local businesses have struggled through this, there is good news.  People have a natural desire to be proud of where they live and their communities.  During COVID-19, the importance of local businesses has been highlighted more than ever. 

The “cues” have not changed.  In short, the desire to buy stuff.  It might be shoes, swimming lessons, or power tools.  However, could it be that the reward from the purchase now coincides with the desire for community pride?  I believe it could.  There is a clear opportunity for small and local business owners to highlight what they do within the community.  Do you employ local high school kids?  Do you donate to local causes and charities?  Then talk about this with your customers.  Let them know how committed you are to the community.

Customers Want to Feel Safe

According to Duhigg, keystone habits are “small changes or habits that people introduce into their routines that unintentionally carry over into other aspects of their lives.” Keystone habits create a domino effect that changes every aspect of a person’s life.

Safety will take on a new form after COVID-19.  Eventually, consumers will relax their sanitization standards, but they most likely will never go back to the previous standards.  Consumers will be more conscious of things like germs and unkept businesses.  All businesses will need to discuss the “customer journey” and make sure that sanitization is considered.

However, sanitization won’t stop there.  As highlighted earlier, consumers expect a different level of transparency and communication.  Your business or franchise must be prepared to inform customers about the steps taken to keep them safe.  Communication could include periodic emails, postings to social media, or stating policies on your website. 

Krieger Analytics

I am Matt Krieger, the founder of Krieger Analytics, a CFO advisory partner for small businesses and franchisors.  I also am the owner and franchisor of a concept called Monkey Bizness, in Denver, Colorado. 

As a small business owner, I realized the benefits that a CFO could bring to smaller organizations.  I also know that franchisors and small business owners didn’t have the need (or budget) for a full-time CFO.  That is why Krieger Analytics is a part-time resource for our clients.  While most think of CFO’s being involved in finance and accounting (we are), I am also involved in much more.  I partner with clients by coaching on strategy, providing clarity for their business, building efficient and effective processes, and making confident business decisions.  Conversations are free, so don’t hesitate to reach out at matt@k-analytics.com.


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