Four in 10 business owners say they’re in danger of closing within the next six months due to COVID-19, according to Marketwatch.
I wanted to better understand how these vulnerable businesses are pivoting to stay afloat, so my team at GetApp polled* more than 5,500 professionals who use our site.
Our findings can help leaders answer their number one question: What are the key things I should do now to ensure my company is set up for success during and after the pandemic?
Businesses are primarily responding to economic uncertainty brought on by the novel coronavirus in two ways:
Making immediate tactical decisions to keep their business afloat
Addressing long-term strategic software spend decisions
In contrast to areas of spending where they’re tightening their belts, such as travel, events, and hiring, many business owners actually see software spend or optimization as a key investment area during the current economic downturn.
This tells me that small businesses that don’t follow the software spending trends we've observed are less likely to recover quickly from the pandemic than those that invest in software. Of course, business leaders who are struggling should always make the most strategic decisions for their company's survival, but our findings can serve as benchmarks to show how your peers are responding.
Although it might seem counterintuitive to invest more in your company during an economic downturn, research and experience from the Great Recession shows this is exactly what smart businesses need to do. Much like the adage: “Work smarter not harder,” the key here is not simply to spend more, but to spend strategically.
Here’s what we found in a poll of our site visitors from March 25 to April 5, 2020:
Worldwide, 53.8% of polled businesses are choosing to either keep software spend as-is or increase it. It's worth noting that our poll included current customers visiting our site, businesses that have likely already made, or are considering, a digital transformation.
Companies that are able to think more about the long-term and choose to optimize costs (rather than simply cutting costs) are able to come out of economic downturns better poised for success.
This aligns with advice we heard from SCORE, a nonprofit that provides free business advice to small-business owners.
By upgrading their software, clients will be ahead of the curve with what I would consider the new normal that will apply to all businesses after the pandemic is over. One of my current clients is already in the process of a software upgrade and is experiencing growth to her practice when a month ago she was concerned about just holding on.
—Bob Paisano, SCORE Central/South Texas District Director
Now is the time for businesses to invest in innovation or automation. Take the case of cosmetics store owner Anteja Acevedo, who is planning on integrating augmented reality software in her store's website so customers can sample products online using their own photos.
"I wanted to create a better and unique customer experience online to adapt to this new normal," says Acevedo. "I have no hesitations about investing in this software because I believe artificial intelligence is the future of e-commerce."
This is a great example of being strategic in the implementation of new solutions to enhance customer value. Taking action now means your business will be ready to kick into high gear when the economic crisis settles.
Businesses rely even more heavily on software during situations such as the COVID-19 pandemic to ensure business continuity. Externally, it’s important that customers know you’re able to deliver. Internally, your employees need to understand goal pivots and that the company is keeping them safe.
Countless businesses are ramping up with various types of tactical communication tools, and we’re seeing that reflected on GetApp:
According to our internal data, video conferencing tools saw a huge spike in site traffic month-over-month, a trend mirrored in the larger economy.
Video conferencing software vendors such as Zoom are seeing an unprecedented increase in demand. In March 2020, the company saw a 1,900% increase in daily meeting participants, reaching more than 200 million from the 10 million participants they had in December 2019.
Besides the fluctuations of video conferencing trends, it’s also fascinating to see how quickly business leaders are creatively reaching solutions to sustain their companies and help them thrive, as well as potentially opening new ongoing revenue sources for the future.
For example, Gilles Bertaux, co-founder and CEO of video conferencing company Livestorm, shared with me that since the beginning of the COVID-19 crisis, his company has seen a 75% increase in revenue and a 200% increase in usage for its webinar segment.
We registered over half a million webinar participants in less than a month. Use cases have increased, spanning from managing governmental and health operations to yoga salons now offering their courses online. Overall, we see economic players who were slow to adopt such systems now really embracing remote work and communication, and we notice other players who are building use cases for remote work as their jobs are changing.
—Gilles Bertaux, Co-Founder and CEO of video conferencing company Livestorm
To expand on this example, workout and fitness companies have had to develop a business model overnight for conducting classes entirely online. Rather than planning to fully revert back to in-person classes after the pandemic, many are considering retaining online class offerings for customers who have come to appreciate the seamless way virtual workouts fit into their schedules.
To enhance adoption and make their tools even more appealing, software solutions are innovating to cover previously untapped needs. Microsoft Teams is adding AI-powered features that can remove background noise such as dogs barking or kids talking. Google Meet is offering advanced video chat features through September so more people can take advantage of premium packages. Livestorm has been sharing its video conferencing tools for free since the COVID-19 outbreak.
Telehealth as an industry was already seeing a steady increase prior to the COVID-19 pandemic. COVID-19 has contributed to exponential growth, as seen in this recent tweet from telemedicine software provider Doxy.me when it experienced a server outage:
In Europe, Doctolib is also changing the culture around doctor visits by providing teleconsultations for patients who are now unable to go for in-person visits due to lockdown restrictions.
According to Reuters, Doctolib’s consultations in France have increased 100 times since the start of the outbreak, and the number of doctors using the platform has increased tenfold. Those numbers are still rising.
In the United States, regulatory agents have eased HIPAA restrictions to allow smaller practices to use more private tools such as FaceTime or WhatsApp to consult with patients. Because some HIPAA-compliant tools were previously cost prohibitive to smaller practices, reducing regulations will likely increase widespread adoption of telemedicine after the pandemic.
If your company has been significantly impacted by the current economic downturn, it could be time to rethink how technology in general—and software in particular—can help your business recover. You may even be able to use this as a transformation opportunity to generate more sustainable profitability after the crisis settles.
I spoke to many business owners that are using this period to move from their legacy software to better, cheaper, and more flexible solutions. Whether it's rethinking your enterprise resource planning (ERP) software or your customer relationship management (CRM) tool, take action and reset your software stack now. Explore the broader market. Talk to new vendors and discover how their software can speed up your business transformation.
The survey referenced in this article was conducted by GetApp from March 25 to April 5, 2020 and included more than 5,500 respondents. The respondents were website visitors who were surveyed using a Hotjar poll on getapp.com, and the number of respondents varied by question.
This document, while intended to inform our clients about the impact of technology on business, is in no way intended to provide legal advice or to endorse a specific course of action.
Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.