Amid Economic Uncertainty, Optimize, Don’t Downsize
I have my own opinions on where the economy is headed, but since I’m a words guy—not a numbers guy—I don’t feel qualified to share them here. The supposed experts—the political and economic pundits in Washington, on Wall Street, and in newsrooms all across the nation—have been speculating for weeks about whether the nation will be plunged into another recession. Some say it will happen any day now, while others have pushed it a year or two down the road. Though the timing is in question, everyone seems to agree that a recession is coming.
With such economic uncertainty looming, the knee-jerk reaction among business leaders is to scale back expenses. Software and equipment upgrades that had been in the budget are suddenly defunded. Hiring and salary freezes are implemented. Marketing and advertising budgets are slashed. And department heads are called upon to analyze their costs line by line to determine where cuts can be made.
For many companies, there’s not a lot left to cut. After years of economic hardship, many businesses have already exhausted the low-hanging fruit for saving money. They can’t get any leaner. They are already doing as much as possible with as little as possible, and further cuts will only reduce their ability to fulfill their core missions.
That leaves businesses with only one option: Department heads need to look beyond simple expense trimming and instead focus on optimizing what they already have. To weather the storm and come out on the other side better than before, cost optimization should be the economic strategy.
Cost optimization requires wise technology investments, with a goal toward proactively growing certain parts of the business, making the most of existing opportunities, and identifying new ones. Some key things to consider in this process are a greater use of customer self-service and process automation; deeper use of analytics to boost retention, improve targeting and personalization, and identify new sales possibilities; and better managing of customer data to make sure that marketing and sales efforts aren’t wasted.
Each of the three features in this month’s issue center on those ideas.
In marketing, for example, the data that companies collect and store about their customers can be optimized with artificial intelligence to uncover new opportunities. In our cover story, “Deeper Relationships Require Intelligence,” Geoff Webb, vice president of product marketing at PROS, explains that “machine learning-based models, tuned and optimized by AI engines, can now evaluate and look for underlying patterns and trends in massive quantities of data, and they can do it fast enough to keep pace with the speed of digital commerce.”
The same can be seen in customer service, where companies of all types and sizes might be better served not by trying to reduce head counts, but rather by optimizing each customer contact with artificial intelligence. Technologies like chatbots and intelligent virtual agents, supercharged by machine learning and natural language understanding, are enabling customers to self-serve more efficiently, while at the same time helping live agents provide better service to more customers faster. Read our feature “The Meandering Path from IVR to IVA” to learn more.
And in sales, technologies are available to help sales reps improve their chances of closing the deal by working more efficiently and intelligently. Software can help combat revenue leakage, as detailed in our third feature, “Strategies to Keep Revenue from Slipping Away.”
When sales systems and processes are not optimized, sales reps sell only to the same tried-and-true accounts, ignoring other divisions to see if new inroads can be made. Or they might focus on a single product line that they are already successfully selling instead of expanding their efforts to other product lines.
Anthony Reynolds, CEO of Altify, urges the following: “You need to think about your corporate strategy, methodologies, and technology to optimize the revenue opportunities in a customer relationship. This means addressing all sides of the customer relationship, whether it is sales, presales, customer service, or other company functions that are customer-facing.”
That’s a far better strategy to sustain any company over the long term, no matter what the national and world economies have in store. Belt-tightening might be a quick fix for a short while, but optimization can keep the revenue pipelines open during the lean times and long into the economic recovery and beyond.
Leonard Klie is the editor of CRM magazine. He can be reached at firstname.lastname@example.org.