Create Your Own Upturn
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For many companies today, reducing the cost of the back office — “doing more with less” — has become the primary focus. Instead, companies ought to be “creating their own upturn” through a focus on an agile — and customer-centric — front office.
Companies that are not just surviving in this economy but thriving are using innovative ways to find, reach, and serve their customers. Some of the new market realities companies must address: globalization; immediacy of communication; and an empowered customer base that will shift its transactions to competing companies at the drop of a hat, while using the Internet as a bully pulpit when dissatisfied with an experience.
Successful companies respond with innovation, and recognize that they have an opportunity — if not a mandate — to consider new approaches to business while differentiating themselves from competitors. These companies rely on transformed marketing, sales, and service capabilities that embrace new channels, technologies, and business processes to more efficiently reach, sell to, and service customers. As a result, they increase the likelihood of repeat business.
High-performance businesses invest in the customer experience. Apple, for example, launched its much-admired chain of stores during the previous economic downturn, and developed what is now considered a best-in-class customer experience that spans the customer life cycle.
To create the right experience, companies must make a fundamental shift from managing volume to managing relationships. In the mix during that shift: strategy, customer data, marketing messages, the business proposition, employees, processes, technology, governance, and metrics involving performance management.
The ability to deliver the right experience begins with the customer. Companies must examine data to understand customers and segment them from an outside-in perspective. What do customers want, and how do they differ by needs, preferences, expectations, and lifestyles?
We’ve found a widening gap between customer expectations and the services a company delivers. That gulf resulted in 67 percent of consumers in a global study reporting that they had quit doing business with at least one company in the previous 12 months. [Editors’ Note: See David Rich’s previous The Tipping Point column, “New Routes to New Customers,” July 2009.] Another study suggested that 70 percent of consumers had changed the mix of companies with which they do business, either switching providers or spreading across a broader set of companies the dollars spent within a given industry or category.
As companies become increasingly global, understanding which emerging markets around the world are potentially the most valuable, and determining how to meet their requirements—in some cases, even before they recognize all of their ever-changing needs—can be particularly challenging.
However, the effort pays dividends: Research has found that companies profit from delivering a solid customer experience.
Build durable, profitable relationships based on customer knowledge. Focused, sophisticated data analysis can offer insights that help a company develop a comprehensive business roadmap. That roadmap may comprise everything from a company’s pricing models and research-and-development models to its processes, technologies, employee training and scheduling, and corporate governance.
In emerging markets, such as Latin America, Asia, and Africa, significant data analysis is required to tailor services and make them more appealing to the customers found in those markets. Multinational companies, although global, must act local if they are to succeed.
In addition to adjusting product assortments to reflect local preferences, some companies create a local image by working with local companies and engaging with employees in those locations to conduct fundraisers for community causes.
Envision the end-to-end customer experience with “tooth-to-tail” support. Companies must use their customer data, segmentation, and market understanding to build a strong foundation — with market positioning and branding — that will differentiate the company and resonate with valued customers.
High-performance businesses build on that foundation, managing their costs and directing available resources to areas where they can maximize their return on investment. From the bowels of a company’s research-and-development organization and its manufacturing operations to its shipping, sales, and warranty management, customer knowledge is used to develop appealing products and services at the right price point and on time, supported with the right post-sale services.
Orchestrate a comprehensive plan for the multichannel customer experience. Attention must be paid to details to deliver a consistent experience whether the customer interacts with the business in person, over the telephone, or via the Internet. Further, the channels must be fully integrated so that, during any given customer interaction, the service representative has access to knowledge about that customer.
For instance, if an individual purchased a life insurance policy from an agent, and that person later called the company’s toll-free number to remedy a problem or to get an answer to a question, the representative who answers that call should be able to access the person’s file. Armed with that information, the representative can more readily respond to the customer in a more satisfactory way.
Relentless attention to getting the customer experience right will yield increased customer equity. When customers are satisfied, companies may reap opportunities to cross-sell products and services, adding to their bottom lines. If approached correctly, the customer experience can also aid the acquisition of new customers, as they determine where they’d like to purchase products and services.
David Rich (email@example.com) is the managing director of the CRM practice at Accenture, a company that specializes in management consulting, outsourcing, and systems integration technology.
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