Dear Corporate Strategist:
After 13 years working within IT in various capacities from developer to director, I see the same patterns repeating themselves. In this age of outsourcing everything but the sales team itself (or did I miss that too?), it is ever more important to remember the faces of our customers and ensure that we are front of mind as a trusted provider.
It's a cyclical pattern, the same as the economy on a macro level; build, stabilize (and get lazy), recede. Technology companies too often fall into the same trap. "Hey, this [insert shiny object here] is really great, the customers are starting to respond to the marketing we've used, so it's all about building more and more clients. We'll take care of the existing customers after we fill our pipeline." After a time, the momentum builds to climax and profiteering reins. Generally this manifests itself in the form of the needlessly gimmicky v-next release or the endless service release cycle that fails to meet schedule or business needs of the market. Sooner or later, panic sets in and the first thing to go is the supporting arms of the organization. "We can sell our way out of this. After all, our existing customers don't create as much revenue anyway. Who needs them?"
The really smart companies start to realize that continuing momentum requires maintaining successful and satisfied base customers, generally starting with the early adopters. They hunt down the big game, and then turn them over to the farmers to nurture them into reference accounts.
After a while, they realize that the focus accounts become harder to bring down and start to settle for the non-strategic accounts. They lose sight of building beachheads in target markets, go after any account they can get and stop focusing on the strategic customers that create a compelling value proposition within a vertical or horizontal solution space. Then the wheels start to come off.
Taking care of your customers, reinforcing and ensuring the continuing value of your offering within the organization and expanding into the enterprise is not a short term proposition. It requires diligence, continued investment and becoming a trusted advisor on behalf of your customers. It is really quite simple: Take care of your customers or they will find someone else that will.
You cannot survive; especially in times such as these, with the assumption that your [insert product or service here] will always be the clear choice. As economic and competitive conditions tighten, the differentiating factor is how your total offering (including goods and services after initial sale) has helped your customer make money, save money, or otherwise justify their operations. You should not be selling a widget, you are generating a unique value to the customer's business. Bottom line, if you make your customer contact look good for their decision to continue doing business or making purchasing decisions with you, they will continue to do so. Remember, you are fighting the alternatives: The "good enough" competitor, the internally developed replacement or the "we can live without" argument.
"Solutions spoken here, we provide a fair value for a fair price. When you have to justify spending, we are easy to defend."
It is essential that you continue to know your customer to understand how they perceive your value. You must be able to predict their changes in strategy, adapt and continue to prove that you have their best interests in mind. This is not the time to think you can staunch the bleeding by infusing new blood (new accounts) and afford to take losses in your base. It takes much less effort, time and investment to continue to till the soil of the fields you already have. Also remember the axiom that 1 bad reference is equal to 10 good ones.
This is not to say that it is not important to continue to pursue new business development opportunities. This too, is vital for your survival. There will always be attrition, but don't think your competitors will sleep while you regroup. Too often I've seen companies eaten alive as their existing customer lists shrink while the new customer list fails to outpace the losses. Your competitors will be all to happy to sell into your base and slowly but surely build momentum and market share as a result of your myopia.
Another thought, it is a dangerous proposition at best to think that you can enhance your way out of a downturn. "Shinys" sell when people are looking to spend, solid value propositions and barriers to exit are the only salvation when cuts are the pervasive trend.
Step back, plan, and execute. Don't let the fight or flight instinct overwhelm good business practices. Protect your existing investments, narrow your focus to strategic battles and cautiously choose your next targets. Always keep in mind that the key to your success as a enterprise provider lay in the success of your customers.
Ted Cochran
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