BBB: COVID-19 report shows businesses are struggling, a new customer is emerging
The Better Business Bureau (BBB) released a comprehensive report Tuesday on the impact COVID-19 is having on businesses across the North American continent.
The BBB cited data gathered from the University of California at Berkeley that shows unemployment could reach as high as 25 percent, while tens of thousands of small businesses are barely surviving.
For its report, the BBB conducted a pulse survey with businesses and customers across North America on the perceived impact of the pandemic and how it's changing consumer behavior. The report also reveals realistic opportunities for businesses to pivot, refocus and strategize for a new future.
The bureau surveyed more than 1,300 BBB Accredited Business owners between March 23rd and March 27th.
Cash flow was at the top of business owners' concerns, along with keeping up with customer demand and paying employees. Of the businesses surveyed, 70 percent believed the coronavirus outbreak would have a significant negative impact.
The BBB said more than half of business owners surveyed said they do not have enough cash or credit to last them past 60 days should another unexpected crisis arrive.
Because of this, many companies are changing the way they do business - from eliminating expenditures, leveraging technology, or adopting a work-from-home practice for employees.
Businesses of course need financial relief, but many owners also told the BBB that marketing and communicating with customers remains an essential need.
The BBB created a
for small businesses that includes email templates, communication best practices and business checklists.
According to the BBB, the coronavirus pandemic is also affecting how much consumers trust certain businesses.
The bureau saw allegations of price gouging skyrocket after the pandemic hit North America. In fact, it increased by 279 percent from January-February to March-April. Masks, toilet paper and hand sanitizer were the top items reportedly being sold for as much as double the usual cost.
The top industries with price gouging allegations are:
- Online retailers
- Grocery stores
- Cable TV providers
- New car dealers
In March 2020, the BBB received nearly 7,000 COVID-19 related complaints and customer reviews. The hardest hit industries were travel agency, airlines, online travel, vacation rentals, hotels and property management.
Overall, the top coronavirus-related complaints reported to the BBB centered around cancellations, especially travel-related bookings, sporting events, fitness centers and education classes.
The BBB said there is a positive side to the impact the pandemic is having on businesses and consumers. Data suggests a new customer is emerging - one who is more aware and intentional about how they spend their money and who gets their business.
The BBB said this presents an opportunity for businesses to elevate their brands, as nearly half of consumers are more selective on which businesses to trust.
"Today, many businesses are forced to make tough decisions for their businesses, both during the pandemic and rebounding from it," the BBB said.
According to the survey, business owners expect the economy to recover when the pandemic ends. The BBB said this makes "preparation for recovery even more essential. Others have used this time to improve efficiencies, support the community and rearrange finances."
to read the full report.