by Jim Roddy, VP of Sales & Marketing at the RSPA
Wouldn’t it be nice to turn off this pandemic horror movie even for half a day? That would calm our nerves, but responsible business leaders can’t look away because the stakes are so high for their employees, their customers, their community, and their future. Multiple times each day, you need to gather every relevant data point you can, apply critical thinking, and determine how the information changes your organization’s go-forward plan.
RSPA members have been incredibly generous with their time and information during this crisis, sharing insights and best practices that enabled us to create the RSPA COVID-19 Crisis Resources Center. Members have also forwarded to me reports and articles that previously weren’t on my radar, three of which I’d like to share with you, along with details of actions VARs and ISVs are taking today.
Shift4 Data Quantifies a Heavy Coronavirus Impact on Restaurants And Hotels – Digital Transactions & Shift4
The link above takes you to the March 26 Digital Transactions piece, and this will connect you with updated information via the Shift4 website showing the economic impact of COVID-19 on various hospitality verticals. Every day, Shift4 compares transaction volume data from the past seven days with the week of Feb. 2. When I visited the site, the data was updated through Friday, March 27, and showed alarming numbers:
- Restaurants: down 79% (42M to 9M)
- Hotels: down 93% (144M to 10M)
- All other hospitality industries: down 71% (13M to 4M)
You can search state-by-state and even by zip code. California was down a staggering 94% overall (restaurants -87%, hotels -97%). The numbers weren’t much better in New York (-92% overall; -78% restaurants, -98% hotels) and my home state of Pennsylvania (-91%, -78% restaurants, -96% hotels). The state suffering the most in the U.S. is Nevada: -97% overall including -99% for restaurants and -95% for hotels. Not only have I never seen numbers like that before, I never imagined them.
Data dashboard: How COVID-19 is impacting local business revenue across the U.S. – Womply
Analytics company Womply tracks transaction data and has created for the public a 14-chart resource center that’s updated daily. In one chart, they separate data into retail/services, restaurants, grocery stores, and travel/tourism. In other charts, Womply breaks out numbers for bars (way down for the month) and sporting goods/guns & ammo stores (way up in mid-March).
Another chart tracks 21 separate categories and showed double-digit drops for 14 categories, led by 88% declines for both transportation businesses and arts/entertainment businesses. A map also shows state-by-state revenue vs. the same week in 2019 for restaurants, travel/tourism, and grocery. The maps are color-coded and let me simply break them down for you: restaurants and travel/tourism are dark red while grocery is bright green.
March 2020 Executive Briefing on COVID-19: Implications for business – McKinsey & Company
McKinsey does an excellent job analyzing the situation and modeling scenarios, but I think the biggest takeaway for VARs and ISVs from McKinsey’s report are these four recommended actions:
- Protect your employees; give them a sense of shared purpose
- Stress-test your financials
- Stabilize your supply chain
- Engage your customers
Let’s look at each of those individually with detail added of actions taken by VARs and ISVs (and actions you should consider, too) along with links to related resources:
- Protect your employees; give them a sense of shared purpose
- Communicate with your employees frequently; engage with them daily and share frequent updates on the state of your business.
- Talk with as many employees one-on-one as possible, but also share updates broadly via email so employees have notes to refer to. [COVID-19 Crisis: How VARs are Communicating with Employees, Merchants]
- Enable your team with remote tools.
- Have regular check-ins with each employee who is working from home.
- Understand new employee rights under the FFCRA (Families First Coronavirus Response Act) and related new laws, and then share appropriate details with you team. [COVID-19 Crisis: FAQs and Legal Updates Channel Executives Need To Know]
- Distribute on company letterhead a statement that you are considered an essential business. [Are Retail IT VARs Considered an “Essential Business”?]
- Conduct daily all-hands conference calls to talk through the situation. This is a great method to reinforce the team’s shared mission is to keep your customers in business during the biggest crisis they’ve ever faced.
- Stress-test your financials
- Don’t only review your financial forecast based on what you think will happen; map out A, B, and C scenarios (with A being likely and C being worst case) and take appropriate actions.
- If credit card residuals have been a boon to your business, understand how your financials will look if volume drops 90% for the next two or three (or more) months.
- Start the application process for loans, grants, and lines of credit now. Don’t wait until you need the money. Review your options using the RSPA Guide to Small Business Resources for the COVID-19 Crisis. Canadian members can consult A VAR’s Guide to Canada’s Economic Response Plan.
- Evaluate expense reductions and take quick action.
- Obtain legal and HR counsel before you make any personnel moves.
- Review your insurance policies. Most commercial insurance policies have a provision for business interruption.
- Stabilize your supply chain
- Communicate with your vendor and distributor partners to understand their current and future stock levels for key parts and equipment. Make this a regularly scheduled call until the COVID-19 crisis is over.
- Stock up on key parts and equipment in case delivery services become overwhelmed or disrupted.
- Ensure stock equipment is functioning and can be deployed if necessary. Right now merchants won’t care if it’s new; they care if it works.
- Engage your customers
- Talk with as many merchants one-on-one as possible, but also share updates broadly via email so customers have notes to refer to. Be helpful and show empathy. [COVID-19 Crisis: How VARs are Communicating with Employees, Merchants]
- Reassure them you are available for tech support and maintenance.
- Email merchants about best practices for cleaning and caring for their technology.
- Enable your merchants to take orders online. Whether it’s integrated with their core POS systems or separate, restaurants need this capability fast. [RSPA Restaurant Rescue]
- Give cash-strapped merchants the option to put fees for some services on hold vs. cancelling them. This might require conversations with your vendors first to see what discounts/relief they are offering during this crisis.
