Skip to main content

The New Cost-Effectiveness Argument

 You don’t buy size 12 shoes for size 9 feet. You don’t get a Bugatti Chiron for grocery store runs. You don’t swat flies with field artillery. And you don’t buy more contact center technology than your business can reasonably grow into.


The customer service neighborhood of CRM was the wrong side of the tracks for many years. The contact center could only cost the company money (so it was thought), so the responsible strategy was to cut costs to the bone and never spend anything there unless forced to. Asking for more staff or better equipment was like getting the state to renovate the prison library—impossible without somebody of the calibre of Andy Dufresne in The Shawshank Redemption.

That attitude was changing by the dawn of the 21st Century. Research proved that better customer service led to better retention, loyalty, and advocacy among customers. These led to a strengthened brand and increased revenue in the long term. New integration technology meant the contact center could save and even generate sales in its own right. The rise of online communities and social networking showed the strength of the motivated and well-connected customer. A shout of praise when a company went the extra mile for a customer in need could be amplified. So could a howl of outrage when one was treated callously, with potentially disastrous results. Spending in the contact center was not only necessary, it was the smart thing to do.

The freedom to make decisions based on results rather than thrift was never license to burn money, but it meant that customer service had a stronger voice at the budgeting table. Unfortunately, not everybody got that memo. Customer service tech can provide some amazing capabilities, and it’s possible to get swept up in what a system can do instead of what it must do. Buyers need to focus on fixing shortcomings before adding potential.

Analogy time: Buying technology is like furnishing a baby’s room. New parents may want a crib that has a changing table attached to it, and can transform into a bed when the kid outgrows a crib, and then into a desk or a toy box when they outgrow that. Sure, it’s good to be prepared for growth, but for the next two to three years all you need is a crib. And is the room itself even large enough for your growing offspring? You can house an infant in a large cupboard, but that’s not enough room for a toddler. Crib for now, space for later, and then you can figure out how to fill that space. For business, it’s current capability first, then capacity for expansion—not the expansion itself.

Likewise, a vendor trying to deliver too much, too soon might not find a welcoming business environment right now. Explosive growth has been the usual way to go, making noise and garnering attention, then trying to grow into the space thus created. This is not a time to be hiring 100 salespeople to fight for 70 jobs, or to focus on new customers while neglecting existing ones. Sustainable growth, or even reduced growth, combined with stellar customer care, is going to be the right call for most businesses.

Much of the above presupposes an organization based in the United States, or doing most of its business there. Our more civilized neighbors, who have managed the crisis better, might benefit from other strategies. But we all should remember first to do what keeps the lights on, then what's most effective, and tune for efficiency afterwards, as time and budget allow.



Comments

Last Year's Top 5 Popular Posts

SAP CRM and SAP Jam - News from CRM evolution

During CRM Evolution 2017 I had the chance of talking with Volker Hildebrand and Anthony Leaper from SAP. Volker is SAP’s Global Vice President SAP Hybris and Anthony is Senior Vice President and Sales GM - Enterprise Social Software at SAP. Topics that we covered were things CRM and collaboration, how and where SAP’s solutions are moving and, of course, the impact that the recent reshuffling in the executive board has. Starting with the latter, there is common agreement, that if at all it is positive as likely to streamline reporting lines and hence decision processes. First things first – after all I am a CRM guy. Having the distinct impression that the SAP Hybris set of solutions is going a good way I was most interested in learning from Volker about how there is going to be a CRM for S4/HANA. SAP’s new generation ERP system is growing at a good clip, and according to the Q1/2017 earnings call, now has 5,800 customers with 400 new customers in the last quarter alone. Many...

How to play the long game Zoho style

The news On February 7 and 8 2024, Zoho held its annual ZohoDay conference, along with a pre-conference get together and an optional visit to SpacX’s not-too-far-away Starbase. Our guide, who went by Chief, and is probably best described as a SpaceX-paparazzi was full of facts and anecdotes, which made the visit very interesting although we couldn’t enter Starbase itself. The event was jam-packed with 125 analysts, 17 customer speakers, and of course Zoho staff for us analysts to talk to. This was a chance we took up eagerly. This time, the event took place in MacAllen, TX, instead of Austin, TX. The reason behind this is once more Zoho’s ruralization strategy, transnational localism.  Which gives also one of the main themes of the event. It was more about understanding Zoho than about individual products, although Zoho disclosed some roadmaps. More about understanding Zoho in a second.  The second main theme was customer success and testimonials. Instead of bombarding us with...

Reflecting on 2023 with gratitude - What caught your interest

A very happy, healthy and prosperous new year to all of you. This is also the time to review my blog and to have a look what your favourite posts of 2023 have been. With 23 posts, I admittedly have been somewhat lazy in 2023. Looking at the top ten read posts in 2023, there is a clear clustering about a few topics, none of them really surprising. There is a genuine interest in CX, ChatGPT, and vendors.  Again, this is not a surprise.  Still, there are a few surprises in the list! So, without further adoo, let’s hear the drumroll for your top five favourite posts on my blog – in ascending order. After all, some suspense cannot harm. The fifth place gets claimed by my review of ZohoDay 2022 – “ Don’t mess with Zoho – A Zohoday 2022 recap ”. Yes, you read that right. This is a 2022 post. The fourth place got claimed by another article on Zoho, almost one year younger: Zoho, how a technology company reimagines business software . It is a reflection on the Zoholics 2023 conference ...

Salesforce stock tanks after earnings report - a snap analysis

The news On May 29, 2024, Salesforce reported its results for the first quarter of the fiscal year 2025. Highlights are a total quarterly revenue of $9.133bn US, resembling a year-over-year growth of 11 percent a current remaining performance obligation of $26.4bn US a remaining performance obligation of $53.9B US an operating margin of 18.7 percent. diluted earnings per share of $1.56 The company reported a revenue guidance of $9.2bn - $9.25bn US for the next quarter and a full year guidance of $37.7bn - $38.0bn US, resembling growth rates of 7 – 8 percent and 8 – 9 percent, respectively. With these numbers, Salesforce ended up at the lower end of last quarter’s guidance on the revenue growth side while exceeding the earnings per share projection and slightly lowered the guidance for the fiscal year 2025. The result: The company’s share price dropped from $272 to bottom out at $212. The bigger picture Salesforce is the big gorilla in the CRM and CX industry. The company has surpassed ...

Zoho - A True Unicorn

End of January Zoho held its 2020 Zoho Days, an analyst summit, which I was happy to attend, along with more than 60 colleagues, as the only analyst from Germany, as it seems. Sadly, it took me quite a while to complete this – Zoho deserves a faster commentare. But hey, let’s look forward and get rolling. Zoho is a privately owned enterprise software company that has quietly evolved from a small software company in 1996 to an ambitious global player that serves the SMB- and enterprise CRM market with cloud applications. The company has a set of 45+ business apps with more than 50 million users, 10 data centres and counting, and is available in 180 countries. The company is profitable and maintained a CAGR of more than 30 percent over the past five years. But why quietly? Because Zoho managed its growth pretty unusually (almost) fully organically with only very minor acquisitions. Crunchbase lists one. Following this unique approach, which defies the tradit...