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The insideEdge (SAPinsider Vol. 11, Iss. 1)

by Jujhar Singh | SAPinsider

January 1, 2010

Companies today are abandoning long-term goals to focus on immediate, cost-cutting measures. But is that really the best approach? Find out why the big picture is now more important than ever and how a customer-centric approach will improve your customer relations in the long run.

Jujhar Singh
Senior Vice President
CRM Product Management

Today’s business and IT leaders face a fundamental dilemma: How do we balance tactical needs and short-term priorities with long-term goals and customer expectations? Harsh economic realities and margin pressure call for operational efficiency, cost containment, and quick ROI to ensure short-term survival. At the same time, customers have become more powerful and more demanding than ever, and organizations must develop differentiated strategies to emerge as leaders in the long run.

Unfortunately, what I’m witnessing is that many organizations are playing it safe —they’re making timeworn mistakes by focusing only on cost-cutting measures. They’re making tactical decisions to increase productivity in a specific area (sales, for example) instead of being bold and investing in their future.

I’ve also seen companies abandon their long-term strategies. Instead, siloed thinking prevails — especially when it comes to technology investment decisions. If you’re focusing on point solutions that promise quick wins and efficiency gains, you may be doing so at the risk of differentiation and long-term success. It’s surprising to see companies embracing a tactical technology approach, losing focus on the customer at a time when customer retention is needed most.

In today’s economic and social environment, customers will hand their business to your competitor in an instant if you can’t deliver on your promises. Companies that design their products and services to optimize operational costs risk alienating their most valuable customers, resulting in higher attrition, decreased purchase volume and frequency, and more demand for discounts. That’s why a customer-centric approach is now more important than ever: It is the customer experience that will define the longevity and profitability of your customer relationships.

Of course, there are short-term necessities that companies must address right away. But adapting to this new reality requires audacity; you must act immediately while still keeping the big picture in mind.

For example, if you need a solution to increase sales effectiveness, make sure you decide on technology that also lays the foundation for future needs. Think beyond account and opportunity management and consider what credit checks, real-time offer management, price and margin management, or optimized supply and demand planning could bring to the table in the future. Lay the groundwork for innovative technologies that allow you to integrate social media channels and that harness the collaborative intelligence of your customer community. Even if it’s not a top priority right now, it will help you make better decisions, improve the customer experience, lower support and marketing costs, and increase customer loyalty in the long run.

I implore you: Don’t turn the wheel back. Focusing only on bottom-line costs and departmental goals limits the potential of your CRM investment. You can outsmart your competition by balancing cost-cutting objectives with efforts to improve the customer experience. I encourage you to read this issue’s articles from leading CRM experts to learn how you can maintain customer loyalty, act immediately, and grow strategically.


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