Previous Next

5 Ideas to Boost Cash Flow during Covid 19

  1. Whilst businesses have focused on the safety of their employees and clients, and the security of their supply chains. Strategically the next step is to try to keep cash flowing by managing near-term revenue and expenses.

    1. Secure near-term sales through risk reversal.

    Companies can secure near-term revenue by reassuring customers who are nervously navigating a tonne of uncertainty. Taking a risk with generous warranties and return policies can both calm nerves and close sales. Risk reversal is when the business carries the risk not the customer.

    Hyundai demonstrated this successfully during the 2008 recession, with their Hyundai Assurance return program and their breakthrough 10-year, 100,000-mile warranty program. The marketing campaign promised that if you lost your job after recently buying a Hyundai, the company would buy it back from you. Hyundai’s market share grew in the first 10 months of 2009 from 3.1% to 4.3%, and their sales grew nearly 24% the following year. They are reprising a similar version of their program today.

    2. Implement new revenue/pricing models.

    Companies should test new revenue and pricing models with their “superconsumers,” many of whom will gladly jump at the chance to secure goods and services they know they will want and need at a meaningful discount. This may require alternative revenue/pricing strategies, like gift cards and subscriptions, as opposed to traditional transaction-based models.

    Gift cards may seem like a retail specific idea, but it is a tactic more companies should try. The travel and leisure segment can offer their best customers ways to secure their elite status for next year by forward-buying travel in bulk at a discount.

    3. Don’t delay launch that innovation now.

    Launch near-ready innovations in the pipeline now. Most companies are risk averse regarding innovation. Customers who may typically nit-pick new innovation will now be grateful for new and improved products/services — even if they’re released before all the kinks are worked out. They likely will help you identify problems and fix them before a broader rollout.

    E.g. this is what Tesla is doing effectively with its auto-pilot software. The software is not finished, but they know that the best way to improve it is to gather actual driver data from Tesla owners using it in the wild.

    Others are simply moving up launch dates sooner to both help consumers hungry for distractions. Many TV and movie studios are making the mistake of delaying launches to maximize mass market revenue, missing the opportunity to launch these as high-priced, pay-per-view events.

    4. Query marketing costs.

    Look at marketing costs that you suspect do not provide a good return on investment. These are often hard to measure marketing costs and/or are geared towards motivating distributors/channel partners more than consumers. Does the distributor/channel partner golf day really generate sufficient ‘good will’ that it converts into sales many times the cost of the golf day?

    5. New kinds of customer acquisition.

    Finally, companies should seek to proactively acquire customers during this crisis. One of the best ways to do this is strategically sampling to acquire new customers. This is especially true of companies that sell intellectual property, like software, training, and services, which have low marginal costs.  Zoom has generated a lot of attention by offering its services for free. These investments now not only enhance their category and brand long term, but they often will convert into paying customers six to twelve months down the line.

    Another way to drive customer acquisition is via mergers and mergers & acquisitions. Valuations are as low as they’ve been in a while, so companies with the means should be aggressively shopping for acquisitions that bring over new customers, cross-selling opportunities, or new business models and categories.

    Companies need to resist the temptation to stay in defence mode during these difficult times. Instead, go on the offence by using radical generosity and thoughtful aggressiveness as guiding principles.

  • For advice, call the NT Business Helpline on: 1800 229 500


1800 229 500

Alice Springs
08 8951 5788

Darwin Office

Suite 2, 3 Whitfield Street 
Darwin City NT 0800 

PO Box 2414, Darwin NT 0801

Alice Springs Office

Central Australia Development Office (CADO), 55 Todd Mall, Alice Springs NT 0870 

PO Box 81, Alice Springs NT 0871

Copyright © 2021 Business Enterprise Centre NT.

Site by Clickstarter.