Bangkok Post: The world windows to Thailand

BY INVITATION

Every downturn in history has been followed by an upturn, and it is well known that embracing a good customer strategy in a downturn greatly increases your chances of being in business when the recovery comes around. Ultimately, a recession can help differentiate companies and their service propositions. It is, therefore, worth the fight to make the case that cutting customer-service spending is not necessarily the right option.

In a challenging economic climate like the one we are currently facing, businesses have the opportunity to become more strategic - and more profitable - by applying their resources in a more efficient and focused manner. The key is to serve and develop the right kind of customer relationships and experiences instead of arbitrarily cutting spending on customer-facing activities.

The question is, when the finance director and shareholders are looking for a lower cost base for the enterprise to either stabilise or save operations to cope with the market pressures and a financial crisis, is it possible to convince them that this is not necessarily the right approach to a customer strategy?

The first step is to start a dialogue with stakeholders to explain why investing in customer experience is important during challenging financial times, namely:

FIt reassures the market that the company understands its customers and its business.

FExisting customers, on whom the company has already incurred acquisition costs, are increasingly intolerant of unintelligent, untargeted communications, and during a downturn competitors are hungrier than ever to acquire them, particularly your good ones.

FProcess failures, which in part reflect poor customer experience, increase cost and customer churn at a time when the priority is to reduce both.

FBusiness disruption, for any reason whatsoever, is increasingly common, and is more expensive to recover from if you have poor customer experience and customer-facing processes.

FIt assists in complying with the ever-increasing global regulatory environment. Inability to document customer experience, therefore, leaves you exposed and is no defence.

At this point, you may have got the finance director and other shareholders to sit up and listen. But for stakeholders to buy the argument that investing in the customer experience creates compelling customer differentiation, you must prove an immediate bottom-line benefit. Rather than cutting costs that make sense to the business internally, organisations should remove activities that, from the customer's perspective, do not add value.

This process starts by understanding what customers really value, and then systematically examines the value delivery chain so the customer dictates what to keep and what to cut. By getting rid of costly non-value-adding activities without damaging the brand or customer perception, organisations can start to reduce time to market and increase the right type of customer purchases, as well as reduce costs.

In the current climate, a company's ability to differentiate on product becomes far less significant. Innovation at the process level, however, affords companies the opportunity to spend time finding ways to make it easier for the right kind of customers to do business with them. Competitive differentiation is achieved by targeting the right proposition - first time, every time - by having offerings that are easy to understand, by getting orders right, by reaching agreeable payment terms and by providing a service that is consistent and competitive.

To do this, enterprises need to begin to understand the importance of truly integrating end-to-end customer-facing processes from front office to back office and of having a technology platform that can support business and market agility, and highly unique - and flexible - process flows. Increasingly, organisations are turning to process-centric customer-relationship management products to achieve this.

It's no surprise that customers are under the same pressures as enterprises during a recession. Their natural reaction is to cut spending and batten down their financial hatches, just like finance directors and shareholders. What this also means is that the purchasing behaviour of customers changes as they start to focus on better-value products and low-cost, superior services. It makes sense that an organisation's approach to its service proposition should also change. Customers who were previously profitable can, in challenging market conditions, end up being unprofitable. Spending more time understanding customer behaviour and profiles is therefore key to creating propositions tailor-made for a recessionary environment at a cost that is acceptable to the organisation.

Ultimately, it's the finance director's duty to cut production, slash non-essential costs and postpone expansion. However, a focus on customers and on delivering a solid customer experience will ensure that such actions position the organisation to pick up the right type of new customer during the cutbacks, as well as avoiding the worst.Courtenay Werleman is Business Unit Director for Southeast Asia at the customer interaction software company, Sword Ciboodle. Mark Manolas is Partner and Chief Operating Officer at Caelan Wright & Associates, and Chairman of the Call Centre Industry Association of Thailand.