NEW YORK (WCBS 880) -- "Shark Tank" investor Kevin O'Leary stressed business owners need to adapt to what he believes are permanent changes to consumer behavior as a result of the COVID-19 pandemic.
On the WCBS Virtual Business Breakfast, presented by The First National Bank of Long Island, the self-made multi-millionaire entrepreneur made several recommendations of digital tools, sharing actionable advice for business recovery with host Joe Connolly. Mr. Wonderful also revealed what some of his companies have found success doing despite the economic turmoil.
1. MAKE THE "GREAT DIGITAL PIVOT"
O'Leary divulged that only 36 of the 56 companies he had been invested in across "almost every sector" nationwide are still in business a year into the pandemic.
"They did the great digital pivot and that involves figuring out how to set up a platform - most of them use Shopify not Amazon, number one - to change their websites to be far more interesting and engaging," he told Connolly.
Shopify allows businesses to create their own e-commerce website using the platform whereas Amazon is the consumer-facing website for companies' online marketplace.
"They went to 4K photography, 1080p video, they told stories about their products, they had other customers talk about testimonials and how they were using them, so they really engaged people for the first time in ways they've never done before because they were forced to - everybody was working remotely," O'Leary said.
He also shared the trick to monetizing digital content on the WCBS Virtual Business Breakfast. More on that later in Mr. Wonderful's 3rd step to growing again.
2. PUT YOUR CUSTOMER FIRST
O'Leary said the best way to sell is to "promise customer support and deliver on it."
He told Connolly his frequent advice to young entrepreneurs is that the customer is always number one, and if you treat them like that, you can have a very profitable business.
"The differentiating factor in selling is customer service," O'Leary said, adding, "You can actually sell the same product for a higher price if you're in the top quartile of customer service for it."
The software tycoon invoked Apple as a prime example.
"When you buy a laptop from them, you're paying 50 percent more than the exact same machine's function on a Windows-based product or a brand you may not know, but because Apple makes you pay for customer support and you respect it and you want it, you pay a crazy amount more," he said.
3. REDUCE YOUR CUSTOMER ACQUISITION COSTS
WCBS Business Producer Neil A. Carousso posed the number one question WCBS 880 listeners had for O'Leary, which was "How do you monetize digital content?"
Mr. Wonderful responded the only metric for monetizing digital content is whether it can reduce customer acquisition costs for one's product or service.
"Basically, what you're trying to do when you make new digital content is to tell a story about your product, show it in its best light, try and get testimonials from other users who are using it and why they use it, and try and acquire customers at the lowest cost you can," the Shark explained.
"Remember, long-term outcome is basically customer acquisition costs have to be less than lifetime value of the customer acquired. Otherwise, you go out of business," O'Leary added.
He produces a plethora of content for the companies he's invested in and shows behind-the-scenes of commercial shoots, media appearances, and his daily life on his YouTube channel, which includes afternoon bike rides along Miami Beach, playing the guitar, cooking in his "Chef Wonderful" videos and enjoying O'Leary Fine Wines with his wife Linda.
A bonus step for growing your business again, O’Leary acknowledges, is a healthy work-life balance.
"I don't work 9 to 5, obviously, and I try and find life balance in doing the things I love to do while I'm working,” said Mr. Wonderful. "I work seven days a week, but I don't work every hour."