How to manage the customer in challenging times
To be successful in the long run, the creation of the highest possible customer value is an essential objective every company should strive for. Especially in times of economic downturn, all functions within an organization need to contribute. Of course, the departments responsible for sales, marketing, service, and pricing have direct access to the customer and thus the main responsibility.
In challenging times, customer value becomes even more important because a crisis clearly shows who is a strong player in the market and who is just average. Right now, sales executives should increase their focus on creating value for customers in comparison to their competitors. Successful companies gain market share during a crisis and continue to do so afterwards!
Essential levers – Actions to be taken by business leaders
According to the phase the company is in and the challenges it faces, different actions can be employed. During the first phase, "organize survival mode", it is first and foremost crucial to receive transparency about the current and upcoming business situation. A real-time cockpit based on a clearly defined steering concept provides an overview of customers, orders, sales funnel, etc.. Besides that, all avoidable costs must be reduced to a minimum as soon as possible. Planned budgets should be re-allocated towards activities with the most value-add. A quick setup up of trainings to enable the sales force to perform "remote sales" is also absolutely essential in many industries. Therefore, digital tools need to be implemented, if they have not been already. Once "survival" is ensured, it is time to "stabilize the business". During this phase, companies regain control of their operations. Three levers are now crucial:
- Organize and run a systematic Sales Up! program: With clearly defined target customers and campaigns, sales and marketing can get back on track.
- Implement an optimized pricing approach: During the downturn, customer needs can be partially or completely different than usual. As a consequence, pricing modules must be adapted to the behavior of the customer as well as optimized.
- Automize processes: All transactional processes in sales support should be automized or at least streamlined to achieve cost reduction.
Having succeeded in crossing the valley of tears, it is time to "reset the course". The overall priority should then lie on the re-configuration of strategies for sales, service, marketing, and pricing. This includes a closer look at the value proposition, focus customers, product and service offerings, and channels.
Success factors for resetting the course
A look back at past economic crises helps to identify success factors in managing the customer:
- Speed: Market conditions can change rapidly. Speed is crucial for every sales, marketing, and pricing organization to be close to the customer and anticipate market developments. This requires effective and efficient processes, systems, and tools.
- Direction: Objectives are always beneficial, not only in the CSO area, and those with the highest priority should be crystal clear during a crisis.
- Precision: The right focus is of utmost importance for the CSO area. Bundling of efforts on the most attractive customer segments, regions, and products and providing the highest customer value at the best price is the foundation for success.