Follow the money
Times are tight. In our boardrooms and at our kitchen tables we need to make prudent decisions about how and when to spend our money. Customer management departments are faced with challenging choices about where to invest and where to cut back. Customers’ demand for channel choice and their rapid adoption of social media call for investment, while tough economics call for constraint.
How do we evaluate the financial implications of proposed investments or cutbacks? How do we make hard choices? There is only one way. Follow the money.
Money must take precedence in every customer management decision. That doesn’t mean a draconian focus on cost reduction (a trap too many have fallen into). It means evaluating every proposal put to you, every tough decision you face, on the basis of its likely impact on revenue, cost and long term customer value. It means not spending money on the basis of some vague promise of improved customer satisfaction. And it means not cutting costs as a knee jerk reaction to the latest fall in the FTSE.
It’s tough to do – data can be hard to pin down and, typically, managers have measured just about everything in their operations except the impact on customer value. But it isn’t impossible. It calls for rigorous auditing, diligent benchmarking and a careful analysis of the link between business action and customer reaction.
The economy isn’t going to recover any time soon. We have to learn to be smart; to spend money where a return is certain and to keep our wallets closed when its not.
Posted by Mike Havard, Director, Ember Services