The recession is ahead of our thinking about how to sell around it. Our first response is a tried and true strategy that is not right for all occasions. People will disagree with me, but so far we’ve seen a steady stream of one idea — staying close to the customer and attending to the customer experience.
There is nothing wrong with this customer-centricity and a lot to be admired. Attending to the customer experience is part of a customer intimacy strategy, and we should always stay close to our customers. But customer intimacy is not the only tool in the box. It should be one of many that we use, like a symphony conductor bringing in the strings and fading the percussion when the score demands it.
Customer intimacy is a great tool, especially when customers have cash and need to choose between alternatives. People buy from people, and they buy from the people they know. Today, customers don’t have much cash; the credit markets have been shredded, and even worthy borrowers have a hard time getting the capital they need to do business.
The credit crunch affects us all because the economy is really one big cascade mechanism. My profits become your revenue in an unbroken chain that keeps people employed and products flying off the shelves. Absent credit and cash, the mechanism seizes up, and all the customer intimacy in the world isn’t worth the proverbial bucket of warm spit.
What to do?
I think of a spectrum with customer intimacy on one end and operational excellence on the other, and CRM has a role to play all the way down the line. Right now we are stuck in the middle of the spectrum still favoring the intimacy end, but it’s time to think different.
Selling is always about innovation; not just your innovative product but innovative approaches that help us stand out against the competition. “Change the rules of the game” is how one sales manager once put it to me. Don’t settle into the same niche as every other salesperson or you will end up column fodder in some evaluation spreadsheet, and there’s no reward for second place.
It is time to think about innovating around operations, if you haven’t already. We have a $13 trillion economy, and the experts say the GDP will shrink by a trillion bucks this year. But that still means roughly $12 trillion worth of goods and services will be bought and sold. In other words, people and companies are still buying, just not as much. They will buy from you if you have the offers, packaging and processes that fit their current needs, and that all relies on operations.
An operational excellence strategy is available to almost every business, and although it represents a kind of innovation, it requires no major investments and it involves no long lead times. Want to improve operations? Great, it’s all about mental innovation. Operational improvements can come from such overlooked sources as employee input to enhance internal processes and outside vendors who can provide automation to streamline labor-intensive activities.
Good operational ideas can especially come from customers — admittedly an idea rooted in intimacy. If you listen hard they might tell you that yes, they have need, but no, they don’t have money — we’re used to hearing that. But if you listen even harder you might discover that customers have enough to buy in different configurations with different price points and different payment terms — things they might not think are possible so they might not ask. These nuggets provide the information you need to adjust operations.
So maybe you change packaging, deliver more product but less frequently, put more or less in the package depending on the need. Pay by the drink rather than by the bottle. Or maybe you reduce the contracts process to bare essentials with a contracts management system delivered on-demand.
Things change in recessions, and sometimes the changes are permanent. On-demand technology was a big winner in the last recession. In 2003, a bad year, I recall surveying the market and being surprised at the willingness of CRM buyers to evaluate on-demand CRM on an equal footing with on-premise solutions. It had not always been that way. In six months the numbers went from 52 percent in favor of evaluating to 85 percent in favor. The tide turned and it never went back.
On-demand has many advantages, but the key in this case was the operational benefit of delivering software services on a pay-as-you-go basis. Think about this. In 2003, on-premise CRM vendors stayed close to their customers, despite the fact that the customers had no money to spend on CRM. On-demand vendors sold to relative strangers over the Internet and phone — not terribly intimate. But while on-premise vendors were holding their customers’ hands, on-demand vendors were taking the business. On-demand vendors sold an operationally superior product in an operationally superior way.
So don’t shy away from customer-centricity in these times — you are the only one who knows if your business needs this approach. At the same time, be aware of your other weapons, and remember that this is a great time to upset the established order. If you don’t upset the apple cart, who will?
Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].