Managing Customer Relationships in Uncertain Times

“May you live in interesting times,” intones the old Chinese curse. Our times are more than interesting. They are troubling. Markets fall precipitously and rise tentatively. Credit is in crunch time. Doom and gloom are the currency of the day. However, despite the intervening problems, the economies in United States and other G7 nations will almost certainly flourish over the coming years. What exists in the immediate future is uncertain and there may be an understandable reluctance by management to invest too heavily in the future. This is particularly true of investments in marketing and sales, especially in areas that are perceived as discretionary or without an immediate return on investment. One thing is clear throughout the current business climate: the customer is king. Strengthening relationships with customers is no longer simply important; it is imperative. Each existing customer relationship is now sacred. Retaining and developing customer relationships are the life-blood of every company. After talking to our clients, both large and small, we find that there is a strong belief in the long-term economic health of the Americas and Europe. In the very short-term the U.S. Federal Reserve and other central banks are attempting to insure liquidity through increases in the money supply and cuts in interest rates. The attempt to inflate the economy with a continuing series of rate cuts, will spur investment over time. Certainly there will be increased government spending to rebuild and fortify existing defense, communications and healthcare infrastructure. Inflation, for the moment at least, is next year’s problem. Given the slowing of economies in the U.S. and Europe over the last several quarters, there has been much discussion of the form of a widespread global recession. Economists often picture economic downturns as a series of letters – a “V,” “U,” or “L” shaped recession. In the fall of 2008, most economists predict a U- or L-shaped recession with the sharp downturn followed by a lingering trough. Our view is that the recent turmoil in the market and the political structure increased the potential for a U-shaped recession. Our discussions with clients suggest that we may experience a continued downturn followed by an at least one temporary upturn over the next three to four quarters. Whether we are correct or not, business will go on. This blog series distills our thoughts and those of our clients. Opinions are many and varied. There is some consensus on actions, but less on their potential results. The following posts highlight a new role for customer relationship management in these difficult times, with a focus on nine issues that every company must consider over the coming months and years.