I've been discussing seasonal businesses with a few customers recently. Whether there are B2C or B2B, dealing with a peak and a low season completely changes how you can approach innovation. There are many reasons for that, but one that always strikes me as spectacularly missed: managers of seasonal businesses have constructed from years of experience a fine-tuned sense to antiquate the fluctuations of the next season.
Will it start sooner than expected? Is it kicking off in a way that will indicate an overall high or low in regard to the last years? Is there unexpected volatility in the profile of the recurring and non-recurring customers? Etc. They will probably even have a hard time explaining how they feel, but they'll know.
The thing is, this hardly-earned sixth sense very often dooms them when trying to innovate for five big reasons. If I try to sort them from the easiest to adjust to the hardest, they would be:
- Very evidently, the core financial structure and revenue streams of seasonal businesses are quite often closely tied to the seasonal cycle, but also, teams alternate from phases of hyper-mobilization at peak season to being more available for side projects at low season. This makes it difficult to invest time and resources to test innovative side businesses or changes in the core activity. At best, you play with an embedded lag in the way you will launch an initiative, sometimes having to delay everything until the next low season period.
- Further, customers themselves are not always available to test an innovation. depending on the type of seasonal business we are involved with, you can only activate early adopters and customers' feedback during peak or low season. This cycle of customer availability, of course, regularly conflicts with the teams' availability. Could you try a new offer for the next peak season when customers will be available? Yes, but then most teams won't be functional as they will have to deal with peak season.
- Then, we get into the culture zone, and things get even more difficult as there is a core rigidity in a business culture organized around the structure of a seasonal cycle. While these businesses are super-smart about fine-tuning things around, they are rapidly lost when you have to question or offer to change this structure. The season structure defines everything up to and including the market's mindset and vision. Try to push away from this structure and be ready to deal with significant doubts, distrust, and, at best, plain inertia.
- There's also an embedded short-term horizon that stems from the point above. Thinking in terms of a five-year horizon has become harder for everyone, but for seasonal operations, the horizon is just this: the season. Within the season, the actionable horizons tend to be the cycle's beginning, middle, and end, nothing else.
- Lastly (and probably more importantly), when changes happen in a seasonal market, they often come from a slow-moving tidal wave: a long-coming change in natality and demographics, the exhaustion or reboot of a major industry sector, the endpoint of decades of urban planning, etc. Points 3. and 4. make it unbelievably challenging to anticipate, plan, and adapt to such changes.