The unthinkable has happened. The credit of the United States has been downgraded from the highest rating of AAA to AA+. This, of course, is not good, and it will put more pressure on all businesses as interest rates and general uncertainty rise. This also will likely create more government intervention, which generally tends to do more harm than good…our system operates based on natural balances that occur in a free market system. Government intervention, while always well intentioned and sometime theoretically sound, throws that balance off. And if this entry feels like déjà vu, you’re right…check out my blog entry a couple years ago titled, “Is the World Really Ending?”
So how does this crisis affect our customer relationships? Our relationships will be impacted in at least one way, two ways if we are customer focused.
First, our relationships with customers will be impacted by ways in which they act differently. Times like these make people more cautious, less likely to spend as freely, more likely to demand higher value and returns for the money they do spend. Procurement becomes more powerful which drives value out of proposed offerings. These dynamics put real pressure on customer relationships.
There is not much we can do to change their behavior. It is a natural reaction to uncertain times like these. However, there is much we can do about our own behavior and how we react to this new or exaggerated dynamic.
1. Recognize that your customer is struggling and use your offerings to help them solve their problems. Not only is that the right thing to do, but it is also a clear demonstration of value. And when you can help them solve their problems, they will be much more likely to spend with you.
2. Continue your efforts to really understand your customers so that you are in a position to add the value they are looking for. If you have a good customer experience effort underway, expand it. If you don’t, start one. It may seem counter to spend more, or there may be pressures to cut costs, but if there is one area that calls for more efforts during times like these, customer listening would be the area.
3. Ramp up your efforts to build a real relationship…not a vendor/customer relationship, but a real partnership. Even if your customer is not currently in a position to purchase more from you, this effort will be time well spent. They will understand that you are in it for the long haul and not ignoring them while times are tough.
4. Understand their situation and, if possible without harming your business, be responsive to it. Can you adjust your offering to address only their most pressing needs and reduce the price accordingly? Can you do that in a way that still allows you to be profitable and maintain a good relationship with them?
5. Call on your good relationships to help you work with their procurement processes. With good relationships you have invested in over time, you may have built enough equity to get their assistance—chances are they are only slightly less annoyed with their procurement department than you are.
Yes, some of these may require resources during a time that companies want to cut costs and that might be tough. But your customers are worth fighting for. Customers are the only way out of this morass. Until customers are willing to spend more, growth will be somewhat elusive. We must invest in our customers and provide them the return they need to be successful. That, and only that, will drive your success too.