Opinion: Doing more with less

The emphasis for businesses now more than ever is to meet and exceed the customer expectation and drive up the customer experience in order to create customer advocates. But too many companies are hampering themselves with poor tools - as many financial organisations have found to their detriment.

By Jason Nash, Microsoft Business Solutions

The events of recent weeks in the world's financial markets can leave little room for doubt: an economic downturn on a frightening scale has set in. Whether it becomes a full blown recession or not, it's clear that large sectors of our economy are facing the toughest business climate for many decades. The 'end to boom and bust' has itself gone bust and we all have to do more with less.

While many commentators are reaching back to the last recession for comparison, in reality the economic downturn we face this time around is a rather different beast, if only because the world we live in is a very different place. Think back to the darker days of the late 20th Century. Most organisations had little or no web presence, while even those on the bleeding edge had sites that seem crude and rudimentary today. CRM systems were in their pioneering first phase where failures were unfortunately all too common and user adoption could be as alarmingly low as the return on investment.

"Normally an effective CRM strategy will be a powerful mechanism to acquire new customers, but in an economic downturn, customer acquisition can be less important than customer retention."

Jason Nash, Microsoft Business Solutions

Now fast forward to today. Internet giants such as Amazon, Expedia and eBay have made the World Wide Web a viable platform for commerce and created a solid bedrock for a digital economy where it's possible to do business easier, quicker and cheaper than ever before. The market for potential news customers for any company has gone global.

The emergence of Web 2.0 companies such as Facebook is now taking that internet revolution into a new stage, providing new channels of collaboration between people and between organisations and their customers. And the CRM market has evolved as well. The lessons of those clunky old 1990s systems have been learned and in their place have come more sophisticated, more cost-effective and more user-friendly next generations offerings.

So in many respects, we're better equipped to deal with a downturn this time around than we were before. The tools are there for us to improve our prospects, not only for survival but for riding out the storm with as little impact as possible. Some commentators argue that in a recession the business driver for CRM changes.

In normal circumstances an effective CRM strategy will be a powerful mechanism to acquire new customers, but in an economic downturn, customer acquisition can be less important than customer retention. If there's less money to go around, you need to be confident that your existing customers are going to stay loyal to you and that means ensuring that their customer experience is as good as you can possibly make it. Poor customer service is never acceptable, but in a recession it's commercially suicidal.

Again we see a very different set of circumstances to the last recession. In the 1980s and 1990s if a customer had a bad customer experience with, for example, a utility company, he or she would would complain to their close circle of friends and associates, but could do little more. Today such an unhappy customer can set up a Facebook group to spread the word; they can post on websites set up to criticise the utility company; they can post their complaints to the world via a blog; and they can switch utility vendor by filling out an online form and pressing 'enter' on their keyboard.

Economic maelstrom

So the emphasis for businesses now more than ever is to meet and exceed the customer expectation and drive up the customer experience in order to create customer advocates. All those tools that can be used by the customer to complain can also be used to evangelise. It will be the companies that use their customer management technologies and skills in this way that will be the best placed to survive the downturn.

Too many businesses are also going into this economic maelstrom hampered by disparate systems that don't communicate with one another seamlessly or which lack the flexibility to adapt and respond quickly enough to fast-changing market circumstances. Such companies find it difficult to get a clear view of their own business, let along the wider market opportunities, and are at an immediate competitive disadvantage. As more mergers and acquisitions take place as a result of the downturn, this is going to be a problem that get worse for a lot more organisations.

Take the banking sector as a good example – its collapse has after all been the most spectacular example of the economic nightmare in the recent weeks. At its simplest level, a working banking system is based on trust. The customers trust the institutions with their money. If banks abuse that trust, the result is customer dissatisfaction. If you sign up for a savings account with a really high interest rate and then that interest suddenly drops off - it was in the small print! - then you're clearly going to feel that your trust in the bank has been misplaced and you're not going to be happy about it.

In this current economic cycle, we've already seen trust in the banks eroded at an alarming rate and on a global scale. Banks are taking out full page advertisements in newspapers based around the single idea of 'you can trust us with your money – honest!'. Marketing and advertising campaigns built on low mortgage and high interest rates are, for now at least, off the agenda. The customer has also been empowered. With the partial nationalisation of many banks, taxpaying customers who now find themselves virtual owners of banks are getting more militant and the balance of power is shifting. Customers are just not going to put up with poor service any longer.

Banks are going to have to up their game when it comes to customer engagement. Some are already well placed. first direct has come first for customer service in the UK's biggest ever call centre benchmarking exercise, conducted by independent market research company GfK NOP, first direct scored 92% in the customer ranking, against an overall Top 50 average of 83%. But further down the ranking come a number of other banks. They already have a problem and the spate of mergers and acquisitions we've seen in recent weeks is only going to make their situation more difficult.

But it's not entirely doom and gloom. There are CRM solutions that can help – technology solutions, process solutions, people solutions.

Jason Nash is Dynamics CRM product manager at Microsoft Business Solutions.