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Why CRM and Social Media is More Important in a Recession

February 11, 2009 by Jimson Lee

Please note it is your responsibility to evaluate the accuracy, completeness and usefulness of any information, opinion or advice contained in the content below.

The Recession is producing a cut-throat approach to sales.

In the past, SaaS companies used to go after customers using a traditional hosted or shrink-wrapped software.

Now SaaS is going after it’s own kind.

I’ve read so many press releases and seen so many ads on how you can switch your CRM companies at a fraction of the cost or your money back.

If you are on the other end of the spectrum, and your customer is ready to jump ship because of cost savings, then you have no choice but to match those prices.

Saving Money in a Recession

The first thing you should do as a household or company is look at all your recurring expenses and negotiate with every single one to get a better payment plan. That includes your credit card interest rate, cable company, or CRM subscription base.

If you are a SaaS sales or account manager, I would keep very close tabs on your existing customers, and keep them as customers.

Competitors are trying to undercut your price. Take a look at all the companies trying to undercut Salesforce.com, such as NetSuite or DataForceCRM. The potential targeted customer has already adopted SaaS, which is the first big hurdle. Now it’s time to steal them with a lower price.

It’s easier to focus on current customers, especially subscription based customers with recurring revenue. It keeps your Year-End numbers healthy because of predictability. So I would get on the phone and make sure that doesn’t happen.

Traditional Methods of Customer Service

The traditional methods of customer service or support is the phone, followed by email, and then to some degree, a live chat session or Instant Message (IM). (SMS text messaging is extremely popular to high school and college students. I am amazed how many of them can type with one hand under a desk and use the numeric keypad to type a text message “blindfolded”)

Knowledgebases are usually in a form of a Forum, although we’ve seen the rise of the Blogs since 2003.

And to keep up with news, using old-fashioned browser bookmarks or RSS readers are the fastest way to keep in touch with the latest news from your favorite web site or company.

The Web 2.0 Era

Staying in touch, whether you are at a service desk or offering a service, has changed the rules.

Facebook, Twitter, and other Web 2.0 applications are now the rage. I never thought a 140 character headline like Twitter would become so popular.

I no longer use bookmarks in my Browser to read the latest news, as RSS feeds such as Google Reader has simplified this for me. But now people prefer to go to Twitter for the latest news! I guess we live in a “Headline News” age.

Salesforce.com released Service Cloud, the next-generation solution for customer service that ties in Facebook and Google. The 7 components identified by Salesforce.com’s Service Cloud are chat, community, e-mail, partners, phone, search and social.

These 7 components are nothing new, but I think they are on to something.

The Bottom Line

Competitors will do anything undercut your price. Thus I would focus on keeping your current customers, especially subscription based customers with recurring revenue, as well as go after some new customers. How you want to divide the 2 groups is up to you.

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Written by Jimson Lee · Filed Under CRM Planning & Implemenation, Customer Service, Featured Story, Marketing & Sales 

Comments

One Response to “Why CRM and Social Media is More Important in a Recession”

  1. John Brown on August 23rd, 2009 1:54 pm

    You are absolutely right, the recession has caused many companies to rethink their CRM strategy. We have been noticing a trend where the established CRM vendors are not living up to the hype and as such, buyers are seeking out niche solutions. One such solution is http://www.micontacts.com.
    MiContacts is focused on sales prospecting. It aims to achieve a 30% growth in pipeline within 6 months – it claims to have achieved 38.6% in early Beta trials. It approaches prospecting from a KPI perspective – best practice KPI’s are inherent and the technology enforces them. It’s simple for sales people to record their notes, activities and collaborate with virtual prospecting teams (eg sales, pre-sales, engineers, etc). Managers have access to a clever Scorecard which provides comparative analytics across the sales teams – manage using facts and not fiction. Marketers can easily create telesales type campaigns and assign tasks to sales people.
    Whilst MiContacts may be all the CRM many companies need, I believe it will ultimately complement CRM by being a focused sales prospecting work-horse. Once an opportunity becomes a customer, then it will move into a CRM system. This will solve two problems:
    1. CRM processes are useless at managing sales prospecting
    2. CRM is not designed to be populated with potentially useless information
    It’s a new entry to the market and an interesting one to boot!

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