Rebecca Minkoff knows a thing or two about how to thrive amid a downturn.
To stem weak demand for her then $495 to $595 handbags during the 2008 financial crisis, the eponymous fashion brand co-founder says she cut prices in half. The strategy helped the company grow 548 percent through the recession, said Minkoff in a recent installment of Inc.'s Real Talk: Business Reboot on May 14 with Inc.com's managing editor, Lindsay Blakely. Eleven years later, she said she's still employing some of that hard-fought knowledge while shepherding her $100 million brand through the coronavirus crisis.
"It's really been about survival mode," said Minkoff, who, along with her brother Uri, has been transitioning the company away from its former brick-and-mortar retail focus toward direct-to-consumer online sales. Here are Minkoff's top tips for reorienting a business for success, whenever times are tough:
1. Be honest.
When going through the trial-and-error phase of a pivot, make sure you're transparent with consumers when something doesn't work, Minkoff said. "If you mess up, admit it," she said. "People are more willing to forgive if you're honest."
2. Get closer to customers.
Minkoff suggested further that founders use this time to connect with consumers through social media. For example, she's been engaging clients through daily Instagram Live sessions, dubbed the Happiest Hour, and video styling sessions. Additionally, she's tracking sales reports to spot new trends among her shoppers. She said she is seeing an uptick in jewelry and puffy blouse sales as customers look for ways to dress up their video calls.
3. Get creative with marketing budgets.
Customer acquisition and advertising costs have plummeted, allowing companies like hers to reallocate marketing budgets. What Minkoff used to spend on a glossy magazine ad, she said, is now going to social or online ads.
Minkoff is meeting her customers on social media with promotions and content, which she said has led to a 70 percent increase in web traffic, year over year.
4. Treat employees respectfully.
If you have to lay off or furlough workers, do it as humanely as possible, Minkoff encouraged. Her company let some employees go after shelter-in-place orders took effect in New York in early March. After workers were notified, Minkoff said, she followed up with a private phone call and personalized letters of recommendation. What's more, she told each person that the decision had nothing to do with the employee's performance but was because of the current climate.
5. Try something new and be OK with failure.
Minkoff encourages founders to tinker with their business models or strategies until they find the right fit. While it may not always work out, you can use that opportunity to learn more about your company and clients.
Her company, for example, recently partnered with another brand for a cross-promotion campaign, she said, without divulging the name of the other firm. However, there wasn't much customer overlap between the companies and the partnership wasn't as fruitful as she had hoped. But it's not the time to worry about misfires, she said.
"Now is the time when companies have the opportunity to try new things and experiment," added Minkoff. "Right now is when people are laying the groundwork for what the new world will be."