The financial survival technique is evident in the Peppers and Rogers Group white paper titled, "CRM in a Down Economy." Written by the management consulting gurus, Don Peppers and Martha Rogers, Ph.D., the powerful argument describes the role CRM can play in this volatile environment.
"The bottom line is that CRM works in a down economy," says Don Peppers, partner with the one-to-one strategy consulting firm. "In fact, a well implemented CRM game plan is more important to a business during an economic turndown than during boom times. Both philosophically and practically, it stands to reason that the closer any company is to its own customers, the better able that company will be to weather any downturn or recession."
The white paper outlines three principal reasons why CRM efforts deserve increasing importance during a down economy:
- Managing customer relationships represents a "cheap growth" option for any firm. It can improve its business results in a more direct way, with more efficiency and less waste, even to the point of reducing its short-term marketing and operating costs.
- Investments in CRM process changes can be made incrementally, in small pieces. This is in stark contrast to supply chain integration and many other IT-led business efficiency improvements. Moreover, each incremental CRM investment can generate immediate, measurable cash flow benefits.
- Philosophically, it just stands to reason that the closer any company is to its own customers, the better able that company will be to weather any downturn or recession.
In an economic downturn it is likely that corporations will try to limit spending and CRM could be one of the areas that gets neglected instead of expanded. The white paper's compelling reasons for businesses to adopt stronger CRM strategies reinforce that the expenditure could largely contribute to corporate survival.
"A solid customer relationship management program allows for flexibility in both strong and challenging economic environments," claims Peppers and Rogers Group CEO, Steve Skinner. "When the economic environment shifts, companies can and should adjust their approach to CRM. In a strong economy, companies can afford to make larger investments in building their 'relationship equity' with customers through CRM infrastructure development. In tougher times, companies must recognize the need to shift the emphasis to harvesting some of that equity by using their existing infrastructure to grow their current customers and streamline marketing communications."
Founded in 1993, Peppers and Rogers Group helps clients devise strategies and plans for strengthening their customer relationships through training, e-learning studies, seminars, workshops and keynote presentations. "CRM in a Down Economy" is available for free through the company's Web site.