Learnings from 2008 crisis

We have a global crisis going on. The tourism sector has been shut down. How long does the crisis last is anybody’s guess. So what do you do as a small business owner? Where to put your focus?  

I have a hard time offering good advice for this crisis, but I can explain what did we do and how did it feel in the last big economic crisis with our small adventure company. 

The crisis of 2008

In the crisis that started in 2008, I was part of an adventure company called 360 DEGREES. It was quite considerable in size but still small according to any measure. Less than 10 persons, less than 0,5MEUR annual turnover. When the crisis hit, the order books were quickly reduced from full to zero. It did not happen overnight like in today’s crisis, but still quite quick. 

I turned to books and was looking for as much management advice I could get. One piece of advice that stood out was not to cut any marketing expenditure and keep going as if nothing had happened. 

This is exactly what we did not do. Here is what we did

1. We reduced all spend to a minimum
2. Took the decision not to focus on marketing and sales
3. We did not compete on price but kept fair pricing
4. Decided to take some time for ourselves
5. Started to think about what will happen afterward… 

The thinking behind it was simple – there is no money in the market, so it is worthless to put efforts into winning sales now. Also, clients started to negotiate on price heavily. We focused on using the crisis to change the future. 

Did it work? 

Yes. When the crisis started to wear out after 2 years (Estonia was one of the hardest-hit European markets and we were focused on local incentive tourism mostly) the market looked different. What was different?

1. Fewer activity providers. It is like you have tens of kayakers on a bay and then freak-wave hits. After wave passes you look around and only see a couple still above the water (yes that is something I have experienced myself). 
2. Price competition was reduced. While customers were still bargaining on the price, they would accept fair pricing after checking the options and quality. 
3. Partners were more active. When strongest partners were starting to look for ways forward the alliances were formed that allowed all parties to grow.
4. Changed product preferences – market changed from hikes to games largely after and during the crisis as people were less ready to travel and more time conscious. 
5. Overall the market players left alive were much more professional and dedicated. 
6. Due to the alliances formed the entry barriers for newcomers went up. Trust built during hard times carried over to the growing market.

What can Loquiz do for you?

We will work to get through the crises. What does that mean?

• We promise not to discontinue any subscriptions during the imminent crisis because of the payment issues.
• If you are paying user then we will add the crisis time to your subscription. We will actually add 90 days to everone who has paid subscription at the end of March. So it is not time lost for you, you will regain it in the future. 
• We are introducing some quick additions that will allow you to build games indoors and in a way that players do not need to come together (more info here: https://loquiz.com/2020/03/31/features-to-battle-corona/). 
• We will be working on new game concepts with current users, that all users can apply in their markets. 

But most importantly. Your issues might be unique. If you have an issue you need to be soled contact us and let’s see if we can help you solve it. 

What you can do during the crisis?

First, survive and then start preparing for future growth. It will be tough, but it will be worth it.