What happens to innovation in hard times? A considerable amount of soul searching has been taking place in boardrooms across the country where nervous executives, once committed to innovative customer-driven strategies, now navigate a precarious economic downturn that is evident not only in the news media but in their own bottom lines. How do you stay a course of aggressive CRM supported by fundamental cultural and technological shifts while the ground under your spreadsheet is shaking?
destinationCRM.com's panel of Experts on Call is the perfect place to cull practical wisdom in troubled times. During the month of March we challenged 12 members of our panel to suggest several strategies businesses can adopt to keep customer initiatives on track while weathering the economic downturn. Not surprisingly, a prevalent message was "back to basics." But not just old basics--new basics as well.
You didn't know there was a difference? While expert Paul Greenberg, author of "CRM at the Speed of Light," is not alone in insisting that "principles that govern the new economy are simply classic economic principles (profitability, etc.) accelerated in Internet time," I would counter that the shift in focus from product to customer is absolutely unique to what we call (or called) the new economy--it may, in fact, be its one enduring legacy.
So let's define old basics as a return to core competencies along with a reduction in costs. New basics, on the other hand, include any technology, process, culture or strategy that is customer driven. Not that a successful enterprise can have one without the other today. Understandably, the advice of our panel members includes a healthy combination of new and old basics. From the panel's cumulative advice comes the following top 10 strategies to keep the customer-driven enterprise on track in the coming year.
10 strategies to Keep the Customer-Driven Enterprise on Track
1. Get Serious about Being Customer-Centric
This is the most fundamental of the new basics. According to Greenberg, "The customer not the market, now drives the economy." He says the definition of the customer changed in 2000 to include "any person or group that gives you value in exchange for your value. That could mean your clients, your employees or your alliance partners."
"Organizations finally have to get serious about adopting customer-centric business strategies," adds Dick Lee of High Yield Marketing. "Why? Because buyers are getting serious about demanding better treatment from sellers." And when you talk about customers, you're talking about service. "The ROI in service can be extremely high," says Don Blumberg of Blumberg Associates, "particularly if you are building on an existing infrastructure and market presence."
2. Change from Growth to Profitability
This old basics chestnut is bible truth in hard times. According to Blumberg, "focus only on those project and system developments that improve bottom line results in customer satisfaction, and in the generation of real incremental revenues and profitability" with an ROI that can be seen in the short to mid-range (12 to 18 months).
Chris Selland, vice president of e-Support Now, advises a shift from customer acquisition to customer retention. "Profitability is king in 2001, so shift your attention away from getting expensive new customers toward leveraging and retaining your existing ones."
3. Stick with your CRM Initiatives
The most unnerving decision an executive has to make in tight times is not where to cut costs, but where to continue--or even increase--spending. Anything that doesn't have an ROI that you can hold in your hand today is tough to stick with. But as a rule of thumb, always stick with the customer.
This goes beyond technology into a company's culture and philosophy. "Now that you've probably gotten at least a fundamental CRM technology solution in place," says Matt Purdue, destinationCRM.com's director of content, "it's time to go back and make certain that your organization is continually focused on the customer from the top down. Assure yourself that every customer-facing employee has the decision-making power to positively influence your customer relationships. Don't get wrapped up in what the technology can do for you. Do get wrapped up in what you are--and are not--doing for your customers."
4. Focus on Core Competencies
A classic in basics. Greenberg advises a flexible approach. "If you are adaptable to rapid changes in customer demand, your core business will likely remain successful," he says. "Demand changes can occur overnight and you have to be ready" with a Web-based CRM strategy and effective customer retention efforts.
Tim McMahon of McMahon Worldwide, offers this variation: "Decide where your competitive advantage will be in the next year and invest in it." Be it price advantage, product or service features or indirect channels, "decide which horse you're going to ride and then ride it. The greatest danger lies in indecisive behavior such as waiting to see what happens or doing a little bit of everything, which amounts to making no decision at all."
The other side of this coin is to outsource whatever isn't core. "Smart companies will outsource non-bottom line operations to third-party specialists with complete confidence, says David Newberger of MOTB, "thanks to dynamic new technologies that enable supply chain, CRM and logistical integration. Expensive overhead is replaced by knowledge management, which results in asset enhancement, a less-leveraged balance sheet and a healthier bottom line.
5. Integrate--for Real
Integration at all levels of the enterprise, inside and out, is as critical as ever. "The topic of front-and-back-office integration (ERP to CRM) led to the rise of a new breed of technology in 2000 called EAI (Enterprise Application Integration)," explains Selland. "This year companies need to expand upon these strategies to integrate not only point applications, but also a) across customer channels and b) with their business partners. This implies a need for flexible technology strategies and even more importantly the elimination of operationally-focused stovepipes. Companies like Charles Schwab, Fidelity, Wal-Mart and others testify to the power of cross-channel integration. Allowing your customers to be treated consistently in your retail outlets, on the Web, on the phone, with your partners and so on is the name of the game.
Lastly, and it may sound academic, but to leverage your CRM investment you must understand its three aspects--operational, analytical and collaborative--and fully integrate them within your enterprise. "This integration is the only way to engage in full lifecycle closed-loop CRM," says Todd Nash, a consultant with Headstrong, "which is the linkage point and competitive advantage organizations are looking for this year and beyond."
The economy itself continues to become more integrated. "The vision of a connected economy is as real today as ever," says Newberger. "But it must begin at home. Seize the vision to drive efficiencies (and profits) by linking internal operations, suppliers and especially customers."
6. Maximize Your Supply/Demand/Value Chain
streamlining your supply chain will help your company better utilize its resources and help strengthen relationships with your suppliers," says Danna Voth, executive editor of E-Business strategist, "who, like you, don't want to get caught with surplus material and underutilized staff. Sharing immediate demand information with your suppliers can help them meet your needs with less waste and storage costs and pass the savings on to you.
On the demand side, "Centralized marketing organizations no longer compete--demand chains do," says Greg Erman, president of MarketSoft. "Marketing departments need to seize control of revenue creation through the entire network of people and customer-facing applications. Companies must coordinate every customer interaction, at every touch point, in real time, by synchronizing point applications in marketing analytics, sales, service, and ERP."
In the end, "Linking the information flow throughout your value chain in a trackable manner can make your entire value chain more efficient, says Voth, "as well as provide important closed-loop information for making strategic plans and tactical decisions."
7. Treat Marketing as a Critical Front Office Infrastructure
According to Erman, "In the past, marketing was viewed as a back-end system. It is imperative to consider your marketing functions as a company lifeline. The system must be available 24/7 to serve consumers and call centers so that you can take advantage of any opportunity to cross-sell and up-sell."
Marketing guru Anu Shukla warns against cutting marketing and advertising budgets: "This is not the best strategy," she says "because it can spiral the company into a continuing downward growth cycle," she said. Instead she advises reducing long-term, brand-building marketing expenditures in favor of investing in "e-marketing to find and analyze your most profitable customers, markets and products." Finally put in place closed loop measurement mechanisms for all your campaigns. If you spend $100 to get $1,000 in additional sales, have the systems to measure results accurately to "help weed out ineffective campaigns and funnel the budget towards high impact efforts."
8. Continue to Innovate
In the area of mobility, destinationCRM.com's Matt Purdue advises, "There are many instances of mobile solutions proving ROI, and if you haven't started planning yours, you are already behind. Start small with a portion of your sales or service force and one process that can be made more efficient. Pick a device that your employees might already be using, such as a mobile phone or a PDA, but one that is scalable enough to take on core tasks later. Choose a wireless network provider with enough bandwidth to cover your entire mobile force and one that can help you wirelessly enable your applications. Then go for it."
9. Invest in Analytic Tools
Analytics go hand-in-hand with anything that has an "e" in front of it; e-marketing, e-business, e-commerce, e-mail. "Web-based analytic solutions can help you make your demand chain a straight path to your target market," says Voth. "Knowing your customer's needs can help your company eliminate expensive marketing miscues and forecasting future requirement in ever closer increments of time can help you produce and deliver ever more appropriate products and services."
There is also the simple matter of wading intelligently through quantities of data. According to CRM Insights' Laurie Hayes, "Analytic tools can drive market decisions by making sense of an almost overwhelming amount of information."
10. Increase Global Outlook and Optimization
Despite problems at home, the global economy will continue to expand with or without your company's participation. "Recognize the impact of new global communications capabilities and changing transportation and distribution time, economics and cost effectiveness," says Blumberg.
"Both technology and changing political and legal structures are opening up world markets to all players. Failure to seriously consider overseas markets as well as overseas competitors can lead to economic disaster. As intellectual property becomes the key to business growth, no single country has a lock on new developments. To succeed in the next 5 to 10 years, corporations must take a more strategic view of global market opportunities and competitive threats rather than assuming that the U.S market position dominates."
To read each expert's answer in full, visit: