Traditional options are not enough
The global economic environment continues to gyrate wildly, with many countries
continuing to slide into recession. The risks and threats facing companies in multiple
industries are unprecedented, with many major organizations struggling to keep
afloat. Frozen credit markets have caused the collapse of major financial service
firms while others have been sold off, literally overnight. Consumer confidence
continues to decline and as a result many have sharply curtailed their purchasing.
For many, if not all companies, now is not the time to even think about investing in
customer focused initiatives. Or is it?
An intelligent answer has to carefully weigh all of the options. Traditionally, the
immediate and most accessible lever during tough economic conditions has been
to quickly take costs out of the business. Accordingly, we have become accustomed
to reading daily headlines announcing major companies shutting down production
facilities, targeting retail stores for closure, and laying off thousands of employees.
These actions are often taken to avoid even more dire consequences down the road,
including bankruptcy, liquidating the business or seeking an unpopular government
“bail-out”.
It is not surprising that customer-facing resources and related initiatives are often
targeted for cost cutting during these times, especially as companies turn to
traditional cost reduction approaches that may stave off immediate failure but do
little to create a sustainable profit formula. Additionally, with little or no previous
experience in using customer information in a down economy, companies often
bypass valuable customer data and channel interaction information when making
major operational decisions. Consequently, many companies are finding out that
applying yesterday’s restructuring options to today’s unprecedented and complex
economic challenges is not enough to save them.