Customer World

When cash becomes a way of life

I was reading an interesting article in MSNBC, on how American consumers are preferring Cash over Credit Cards. This is a trend seen very recently by retailers in the US where Americans want to be a lot more "prudent" than ever before. It's  moving back to pretty much the days similar to what their grandparents used to do - buy only what's needed.

It made me wonder how should marketers re-orient their marketing efforts and messages given this trend. This I believe will be something most countries will witness as customer buying behaviour, over the coming year. Here's my take on what could they do:

1. Marketers who  embrace value & savings theme will get the attention of consumers. But, this can't be just lip service or mere messages. They need to identify products within their portfolio that can really deliver this benefit. Since consumers tend to be more " rational" now, fluffy propositions and benefits will never fly with them. Imagine how "fuel-efficient" Japanese cars caught the fancy of American consumers several years back. They genuinely delivered cars that were easier to maintain and run. Similarly marketers need to identify such benefit in their products. In my opinion, this could lead to packaging innovation. Moving to smaller packs unlike giant sized packs which drove "unwanted consumption" some years back could be an option. Consumers might not stock and consume but they might buy more often as need arises.
2. Payments could move prepaid - Imagine as a retailer, if there was budget cards for customers. Pre-paid loaded value cards that offer more value  for the  same amount of money. It could have  pre-loaded offers,  savings coupons etc. as a part of the pre-paid cards on offer.This can help track cash payments which often become difficult to track during these times. This also ensures there's a lock-in for repeat visits from the same consumers.
3. Service Innovation could trigger and extend existing customer relationships - Imagine an existing environment where customers want to extend the life of their existing products. This can lead to service innovation for white good manufacturers. Imagine an extended warranty offer for next 12 months for say just few tens of dollars more. This could be offered to existing customers as an option. Or an  AMC contract that protects any additional spends due to breakdowns during the next 12 months. Companies will have to start thinking service innovation in these difficult times. But, surely they are bound to resonate with consumers as they would be totally genuine and thoughtful.
4. Converting assets into cash - If the world earlier was "Buy now and Pay later", this is an environment for financial innovation, when liquid & priced assets bought in the past can be valued and turned into cash for their customers. It's needs prudent financial re-engineering like never seen before by financial services companies.
   

The key answers if you see is turning the traditional marketing thinking on its head. That's the real challenge marketers will face in the days to come.

Is the future of customer management in hosted solutions?

Destination CRM has an interesting article this trend. The article highlights the following facts:

Recent research from Gartner analyst Michael Maoz predicts that by the year 2012, 30 percent of investments in CRM will be via software-as-a-service (SaaS).

Gartner research indicates that the increased deployment of SaaS initiatives might have underwhelming implications for consulting and professional services. Maoz explains that many companies view software-as-a-service applications as plug-and-play. The implementations lack process involvement and merely connect applications in the cloud, rather than looking at the bigger picture of business process management. "CRM is not just the technology," Maoz expels. "It's more an issue of ‘How do I interact with my customer?' Using some of these SaaS applications without changing the business process could be just enabling [organizations] to do bad things even worse." In other words, without a bottom-up approach, deploying new applications in the cloud is automating a tired or flawed process. "Using software-as-a-service is not going to help CRM," Maoz states. "We shouldn't be enamored by cloud computing instead of in lieu of process improvement."

My View: I can't agree more with Gartner on this trend. Increasingly, clients will prefer this as a hosted and managed service. In fact, the second part of the article seemed more important to me. It's not only important to have SaaS as a model in customer management but the ability to understand the process and business impact & action is a key need where I see is a huge gap that exists currently in such models.

I believe there must be 4 stages before implementing SaaS in a customer management environment:

Stage 1: Define your CaaS : Customer management as a strategy - How are customers or prospects being defined by current and prospective value, opportunity and segments?

Stage 2: Define your IPPM: Set-up a clear interaction planning and process mapping & migration  of your customers and prospects.

Stage 3 : Implement SaaS:  Once you have done the above 2 stages, then plan your SaaS roll out.

Stage 4: Plan the analytics,campaigns & metrics: SaaS is just the start but post customer management in SaaS is critical. The analytics around customers, campaigns around potentially valuable segments and tracking key metrics is often overlooked.