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It’s Time to Adjust to the New Business Reality

In the late 1990s, acquiring new business was not a problem. The telephone seemed to ring off the hook. Companies did not need sophisticated processes to manage the incoming responses to sales calls, ads or direct marketing.

Incoming leads choked up the inquiry funnel. If prospects were really interested, they usually called back. However, the past 2 1/2 years have proved that times have changed. As Yogi Berra would say, “The future ain’t what it used to be.”

That statement is a prophecy come true for many businesses. What he meant is that you don’t worry much about the future when the present is so good. For business, this means that problems tend to be masked by the good times.

But when the good times end, it becomes clear that the problems were there all along, and that they are getting in the way of making business processes work.

What can businesses do to solve their problems? This three-step evaluation is a good start.

Step 1. A company must understand how it is doing business and define its true cost of doing business. How much does it really cost to manage the entire process of getting and keeping a customer?

Step 2. Identify the company’s key business strategy and determine whether this strategy is understood throughout the corporation. Here are examples of actions business-to-business companies have used to stay on top.

Dell Computer sells $43 million daily in merchandise. The thrust of its strategy is:

· Gain efficiencies by putting the clunky old business functions, such as order entry, invoicing, factory integration processes and inventory management, on the Internet.

· Turn the sales force into a team that partners with, rather than sells to, the customers by having value-added services at the ready.

· Follow rules 1 and 2 — or die.

The Isuzu Commercial Truck Division of General Motors, which has used incentives to drive business in the past, found that the intelligent use of both incentives and technology reduced its costs per vehicle and raised its market share to 45 percent.

Such smart strategy has let GM Isuzu slash its marketing spending from $1,800 per vehicle in 1996 to $1,150 in 2001 while increasing sales 63.5 percent in that period.

“I’m a true believer in incentives as part of the marketing mix,” said Todd Bloom, vice president of commercial truck marketing. “They can have a dramatic effect on your business.”

In addition, new technology to make dealers more aggressive in their marketplace has generated incremental sales of more than 10 percent.

Isuzu also initiated an innovative technology that shifted the marketing function away from corporate headquarters and into the dealer sales force. This was done through a method of providing corporate-approved creative materials by vocation, which could be personalized to the dealer.

Using a special technology through the Internet, the dealers log onto a Web site that gives them access to their dealership’s customer and prospect database. Within this site, dealers select sales materials that are automatically printed and sent to their customers and prospects.

Step 3. To help companies understand their processes, many advisers recommend that the following “Needs Assessment” program be put into effect as quickly as possible:

· Create a team with members from multidisciplinary departments.

· Examine all the resources in the enterprise that affect the initiative.

· Arrive at common agendas for the success of the enterprise.

· Have shared goals.

· Determine time lines.

· Get a budget approved in advance.

· Nothing is more important than a clear understanding of the data that underlies the database and reports. If the data is not of high quality, nothing you do will improve the processes. Examine the data for quality issues, accuracy, consistency and completeness. There is no sense in building out your technology if your data lacks enough information attached to at least 40 percent of your universe of records.

BMW, which has one of the best customer relationship management systems in the automotive industry, has a series of multidisciplinary teams who work continually to refine the processes and look for new opportunities to improve the systems. With 20 disparate systems feeding the customer database, it could get hairy. But BMW and its vendor, msdbm, have it figured out.

Once the Needs Assessment is completed, the next step is to begin to implement the findings. This is the fun part. This is the beginning of the strategies that allow the corporation to surge in front of the competition.

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