5 Things A Company Must Do Now in a Slowing Economy


Published on

Want to come out of the downturn in a better position? There are things you can do now to improve your chances.

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • 5 Things A Company Must Do Now in a Slowing Economy

    1. 1. The MANDATE for Customer Focus in Challenging Economic Times Nedra Sadorf Hunter Business Group, LLC Hunter Business Group, LLC 4650 North Port Washington Road Milwaukee, WI 53212 414-203-8060 www.hunterbusiness.com
    2. 2. The Customer Imperative: Consequences of “Failure to Act” amount of new sales required just to maintain a 5% YoY gain Last Year Market Contraction (20%) Lost Customers (80% retention) $100M $20M $20M New Sales $45M This Year $105M
    3. 3. Executive Summary <ul><li>The most valuable core asset your company has is your relationship with your customers. </li></ul><ul><ul><li>Just as you wouldn’t stop maintenance on a key piece of equipment in your manufacturing process in order to reduce costs, you must also ensure that when you implement savings in sales and marketing plans that you continue to maintain the “customer asset” in peak working condition. </li></ul></ul><ul><li>It is key to ensure that in responding to the current economic challenges, we take actions which reduce costs without negatively impacting customers. </li></ul><ul><li>The experience that customers have with your company is pivotal to their loyalty. </li></ul>The mandates for customer focus are not “optional” or “nice-to-have” – they are essential to survival
    4. 4. Service Trumps Price Price will always be important in a customer’s purchase decision, but “outstanding service” is the number one reason customers do business with a company. Source: Harris Interactive, Customer Experience Report, March 2006
    5. 5. Business Strategies for Uncertain Economy <ul><li>In an uncertain economy, the business strategies for marketing, channels, IT, products, and customers change from “growing” to “harvesting” </li></ul>In a downturn…HARVEST In an upturn…GROW Savings for efficiency Investment for revenue Customer Objective Add core capabilities Divest non-core businesses Products / Services Optimize current IT Invest in IT Infrastructure / IT Squeeze value Focus on reach Channels Service for current customers Brand and name promotion Marketing Grow existing customers Acquire more customers Business Growth
    6. 6. Is Customer Focus Worth It? 6% 14% 31% 50% 2% % increase needed in customer retention to have same profit impact as cutting costs by 10% Increase in new product penetration from loyal customers Additional share of wallet granted by loyal customers Additional likelihood that a loyal customer will re-purchase or renew, compared to average customer Additional operating margin achieved by industry leads, strictly by having a better understanding of the customer Expected Results Desired Outcome
    7. 7. 5 Customer-Focus Mandates for Survival <ul><li>“ Strategic Business Development” </li></ul><ul><ul><li>Going beyond Lead Qualification in your BD efforts </li></ul></ul><ul><li>“ Teamwork: Inside and Field Sales” </li></ul><ul><ul><li>Leveraging field sales time, and building relationships and application understanding. </li></ul></ul><ul><li>“ You Can’t Be All Things to All People” </li></ul><ul><ul><li>Account Grading and targeted investment of resources </li></ul></ul><ul><li>“ Shift of Focus” </li></ul><ul><ul><li>Focus on selected verticals to leverage knowledge of customer applications </li></ul></ul><ul><li>“ Systematically ID and Mitigate Customer Pain Points” </li></ul><ul><ul><li>Prioritize investments around areas of greatest impact on customers </li></ul></ul>5 4 3 2 1
    8. 8. 1 – Strategic Business Development Results <ul><li>Shifting the business development focus from “lead qualification” to “meeting setting” </li></ul><ul><li>Validate the strategy and value proposition </li></ul><ul><li>Rather than simply passing qualified leads to the field, the BD function steps up to a greater accountability to actually set meetings for the field </li></ul><ul><li>Results in better leverage of valuable field time </li></ul><ul><li>Deliver value – not a sales call </li></ul><ul><li>The measurement of quality of the meetings set is the conversion of first meetings into second meetings. </li></ul>Goal Key Process
    9. 9. 2 – Coordinate Sales Activities Results <ul><li>Inside Sales must begin to work seamlessly with the field, coordinating their activities into current customer accounts. </li></ul><ul><li>Focus is on identification of applications within existing accounts, and maintenance of customer relationships. </li></ul><ul><li>Cultivation and contact continue, even in the absence of a current project. </li></ul><ul><li>Consistency and rigor to follow-up </li></ul><ul><li>Team planning sessions between field and inside rep </li></ul><ul><li>Leverage of non-customer facing tasks and time to inside rep </li></ul><ul><li>Shared view of customer information </li></ul><ul><li>** Assignment of additional account coverage to field </li></ul>Goal Key Process
    10. 10. Field Sales Call Field Sales Call Field Sales Call Direct Mail Inside Sales Rep Call Field Sales Call Field Sales Call Contact 1 $400 Contact 2 $400 Contact 3 $400 Contact 1 $10 Contact 2 $35 Contact 3 $400 Contact 4 $400 = = $1,200 $845 Cost per Contact = $400 Cost per Contact = $208.75 <ul><li>33% increase in Field Rep productivity </li></ul><ul><li>Decrease in expense to revenue ratio by 29% </li></ul><ul><li>General discussion </li></ul><ul><li>Leave brochure </li></ul><ul><li>Answer specific product questions </li></ul><ul><li>Product demo </li></ul><ul><li>Follow up and close </li></ul><ul><li>Benefits </li></ul><ul><li>Offer </li></ul><ul><li>General introduction </li></ul><ul><li>Answer product questions </li></ul><ul><li>Send additional material, specs, testimonials, etc. </li></ul><ul><li>Product demo </li></ul><ul><li>Follow-up and close sale </li></ul>How Does The Leverage in The Team Coverage Model Work?
    11. 11. 3 – Grading of Accounts Results <ul><li>Invest in accounts according to their potential value </li></ul><ul><li>Maximize ROI on customer investments </li></ul><ul><li>Provide ability to serve all tiers of customers – while maintaining profitability </li></ul><ul><li>Intelligently apply your service and marketing resources to those customers with the highest likelihood of growth </li></ul><ul><li>We can not be all things to all people – but must judiciously invest our time and resources across accounts </li></ul><ul><li>Grade accounts (from AA to D), based on current sales and potential </li></ul><ul><li>Assign a level of customer engagement for each grade </li></ul><ul><li>Include a mix of contact media </li></ul><ul><li>Economically rationalize the model </li></ul><ul><li>Build into execution plan and tracking </li></ul>Goal Key Process
    12. 12. Balancing Your Investments <ul><li>Example Assumptions: </li></ul><ul><li>Marketing budget is 8% of total revenue for five customers </li></ul><ul><li>Could split constant dollars among the five </li></ul>$2,000K $1,500K $750K $300K $50K $4,600K 144% $72,000 Mom & Pop: 5% $72,000 K-Mart: 10% $72,000 Kroger: 24% $72,000 Hallmark: 4% $72,000 Walmart: 8% $360,000 Total: Average Sales & Marketing Cost as % of Revenue Average Sales & Marketing Cost per Customer Potential Annual Revenue per Customer
    13. 13. Balancing Your Investments <ul><li>Example Assumptions: </li></ul><ul><li>Marketing budget is 8% of total revenue for five customers </li></ul><ul><li>Could maintain a constant Expense:Revenue % instead </li></ul>$2,000K $1,500K $750K $300K $50K $4,600K 8% $4,000 Mom & Pop: 8% $120,000 K-Mart: 8% $60,000 Kroger: 8% $24,000 Hallmark: 8% $160,000 Walmart: 8% $368,000 Total: Average Sales & Marketing Cost as % of Revenue Average Sales & Marketing Cost per Customer Potential Annual Revenue per Customer
    14. 14. Marketing Integration Media/Web/e-Business $ .01 - .05 Telephone Sales $8.00 - 24.00 Field Sales $40.00 - 400.00 Direct Mail $.25 - 5.00 © Hunter Business Group, LLC In the B 2 B Space, an integrated marketing system is not an event, it is a process. The Process includes the mix of media and content for each customer
    15. 15. 4 – Paradigm Shift: Vertical Focus Results <ul><li>Leverage strengths </li></ul><ul><li>FOCUS </li></ul><ul><li>Leverage investments in larger accounts across other accounts within vertical </li></ul><ul><li>Leverage applications’ needs across customers within verticals </li></ul><ul><li>Understand and tailor value propositions by vertical and application (Re-usable understanding; leverage of knowledge) </li></ul><ul><li>Select investments in vertical knowledge </li></ul><ul><li>Identify key verticals </li></ul><ul><li>Identify resources with greatest capability within those verticals </li></ul><ul><li>Validate applications and value propositions within verticals </li></ul><ul><li>Train & re-tool to deliver value propositions within vertical </li></ul>Goal Key Process
    16. 16. Conceptual Design: Vertical Market Alignment Group and serve customers who have similar needs into vertical “segments”. Within the segments, provide appropriate level of sales coverage based on expected value of each tier of customer. Strategic Account Managers Field Outbound Phone Outbound Phone Inbound Phone Financial Telecom Public Sector Product Services Key Accounts Tier 1 Proactive Accounts Tier 2 Maintenance Accounts
    17. 17. 5 - Capture Customer Pain Points Results <ul><li>Protect your customer base to avoid shrinkage through defection to competitors </li></ul><ul><li>A system is needed to capture pain points and build in an understanding of causes of defection (non-economics driven defection) and mitigate against those. </li></ul><ul><li>Identify key points of interaction within the customer experience (e.g., customer care center; post-sales engagement; sales process; service; etc.) </li></ul><ul><li>Establish mechanism to capture and categorize feedback </li></ul><ul><li>Identify responsibility to review and act upon the feedback </li></ul>Goal Key Process
    18. 18. Customer Satisfaction vs. Loyalty <ul><li>“… our research has shown that 60% - 80% of customers who defected had said on a survey just prior to defecting that they were satisfied or very satisfied ” </li></ul><ul><ul><li>“ The Loyalty Effect”, Frederick Reichhold </li></ul></ul><ul><li>Satisfaction is not predictive of future buying behavior, retention or growth </li></ul><ul><li>HOWEVER, satisfaction is a core COMPONENT of loyalty </li></ul><ul><li>AND, customer satisfaction is critical to pain point mitigation and precluding defection </li></ul><ul><li>85% of respondents…indicated they formulate their opinion of a company and brand by the contact center and the agent…63% said they would become dis-loyal because of a bad experience </li></ul><ul><ul><li>Benchmark Portal, Jon Anton </li></ul></ul>
    19. 19. Going Forward… <ul><li>Economic downturns do not last forever… but strong customer relationships do…and so can some mistakes…. </li></ul><ul><li>Questions? Contact Ron Chandler via email </li></ul><ul><li>[email_address] </li></ul>