Building Advantage in a Recession through Stronger Customer Relationships
Date: Thursday , June 11, 2009
The world has changed dramatically in the last 6-12 months, as we all know. The weak economic scenario has changed the business focus of companies around the world. Most companies are faced with challenges in terms of costs and profitability like they have never seen before. The priority has shifted from growth and expansion to reducing costs and preserving and managing cash.
We also witness interesting behavioral changes. There is a new sense of urgency. Companies have moved from in-depth research about issues to immediate action. Studies are out…just doing it is in. And in an environment where things are constantly in a flux, there is a new appreciation for business agility. As the CFO of one of our clients related, “When every two weeks all bets are off and everything changes…we have to be more nimble to change rather than strive for accuracy, as none exists…”
It is also clear that there is receptivity to new ideas like never before. Customers are looking for innovation and leadership from their vendors and service providers, especially as it relates to the financial outlook of their companies. Business leaders are caught up figuring out where revenue will end up and, quite frankly, have little time for anything else. They are also more amenable to driving new ideas that might have been difficult or off the limits during better times. The key today is pragmatism, delivering thought leadership that will address the key pain points of business today: revenue pressure, need to improve cash flow, need to increase margins, and take cost out.
Today’s environment necessarily changes the perspective of how a company should interact with its clients and how the management team needs to redirect the business and their teams. Now is the time to draw close to customers. Listening and sensitivity in this environment is critical for the success of the customer and your own company. Customers are looking for solutions from every source, and it is up to your company to step in and try and help.
At this point of time we should think about this in terms of understanding our clients, redefining value in the terms that meet their needs today, and insuring that what we are offering is highly relevant to today’s economic picture. Organizations should coach employees who interact with customers, from both sales and at an operational level, to constantly be on the look out for opportunities to deliver increased business impact. We have to increase our outreach to insure that we remain in touch with our clients’ businesses. With the pace of change, a normal rhythm is no longer enough. You can’t possibly understand what their pain points are, nor be able to deliver meaningful content and ideas if you approach customer engagement as business as usual.
We are delivering new value to clients and are realizing ourselves the benefit that accrue from the new ways of doing business. Some of these areas might not have materialized if not for the current economy and listening to our customers. For example, we have introduced new commercial and pricing models. Clients are faced with capital constraints and are cutting back on extra expenses. This is of no surprise, but often the very areas they are stretched to cover from a budget perspective are the solutions that will help get them through these tough times. As a result we are now offering success-based pricing, and where implementation fees are involved, including these in a transactional cost model. This is a win-win scenario, as we are confident that our solutions will bring value and the customer benefits from that value.
Today’s environment has also led to a variety of new offers to the market. By understanding a client’s needs, organizations should not only be able to produce a point solution for the given client, but also should be able to provide a repeatable offer that can address similar needs of multiple clients. For example, one of the verticals we serve is the mortgage industry. New, tight credit parameters have led to fewer borrowers being able to qualify for the available mortgage products. We provide business process management services to our clients and have expanded our offerings to include FHA loans, reverse mortgages, and credit consultation to align with how they are now servicing their customers. Similarly, we now provide strategic assessment services to these clients, where we make suggestions on how to improve mortgage processes, reduce costs, and implement new technologies. Interestingly, this new offering also embraces a new commercial model. The assessment is free, allowing clients to pay us when they see results and increased revenues.
On a related note, Genpact has a strong analytics team. Access to information and data has taken on new relevance to guiding business. Analytics are being used to identify low risk customers for financial products and to increase cross sell opportunities. In risk management, our clients are seeking help in coming up with fresh models for loss forecasting, portfolio management, and high-risk account identification. Sales force effectiveness is also an area of need for clients, as sales teams are downsized, and resource optimization offerings for both inventory and network management are needed more than ever. Providing information services such as these helps the clients approach their businesses intelligently especially when their own teams don’t have the bandwidth to take this on.
Recession can be an opportunity to build advantage for your clients as well as for your company. It requires listening intently to your customers and taking advantage of the ideas that are naturally brought forward. This requires the management of the company to fully understand that a company is about making customers successful and keeping them for the long term.
Author is President & CEO of Genpact