scott.gillum | Carbon Copy

The Death of Big Data?

Big data is about to get bigger. Deliotte predicts that by the end of 2012 more than 90 percent of the Fortune 500 will likely have at least some Big Data initiatives under way. Companies will likely spend $1-1.5 billion to enable their organization to collect, analysis and use “big data” with the intent of gaining a better understanding their customers. But according to Doc Searls author of the new book Intention Economy: When Customers Take Charge that may be a waste of money.

Searls points out in a recent article in the Wall Street Journal, that as fast as companies are configuring systems to capture data at customer touchpoints, consumers are disabling collection sites. In May of this year, ClarityRay reported that the overall rate of ad blocking in the U.S. was 9.26%, and even higher on certain types of site and browser (download the report on ClarityRay’s website).

In May, Microsoft announced that the “Do Not Track” (DNT) feature will be turned on by default in the next version of Internet Explorer. Add this to Dish’s ad skipping product, Hopper and you have an increasingly less assessable consumer. What does this mean, well according to Searls it’s leading to a point where the supply side will yield influence, and ultimately power to the demand side, the consumer.

Searls book explores how customers will transact over the next 10 years, and the rise of Vendor Relationship Management (VRM), think CRM built for consumers to aggregate personal information and signal their intention to vendors on their preference, terms and desired price. As Searls points out, sites like Priceline and Travelocity, have started this movement but they are still “siloed.”

The tipping point for the next wave is fully empowered consumer, untethered by restrictive contracts, and siloed information. In this new world, consumers will have software that can integrate apps with the services offered by companies, saving time for consumers and creating commerce for companies in real time.

Imagine a business trip in which your phone apps for travel, budgeting, mapping, all work together to compare offers, make reservations, and filling out expense reports along the way.

What will it take to enable this revolution? Ultimately, it comes down to the recognition that a free customer is more valuable than captive one. Companies who will thrive will identify opportunities that take advantage of consumer’s freedom that they have, or want. A mindshift from thinking of consumers as “targets” that live in “populations” who need to be “acquired” or “locked in.” To an empowered individual buyer who will signal their intent to a company, as long as there is a trusted relationship.

In this personal empowerment revolution outlined by Searls, the future of buying lies not in investing in big data systems to figure out consumers, but rather by integrating apps that enable “small data” to be used by consumers.

Big changes for big data are looming on the horizon…

B2B Marketers Take Their Seat at the Table

In 2004, I was part of research project with a professor at the Kellogg School of Management and the CMO Council that sought to understand what CMO’s believed to be critical for their success. The most common response was a seat at the table with other senior executives.

Four years ago, I was part of another research effort focused on the CMO’s top priorities, and number one on the list was to be viewed by their peers as strategic thinkers. Finally, I believe the day has come for that to happen.

Marty Homlish, the CMO of HP believes the line between business and consumer marketing is disappearing. Homlish states, “ Behind every B-to-B company is a consumer. The way you communicate to that person is as an informed consumer.”

Technology has allowed work to follow us home and our home life to the office. It has blurred the line between our personal and business personas. The concept of being ‘at work’ is now more a state of mind rather than a physical location or particular time of day.

If business buyers – who were once thought of only as rational decision makers – now need to be communicated with as informed and emotional consumers who no longer fit our past perception of work hours and locations, what might this mean for the future of business-to-business marketing?

To answer that question, one must first understand the difference between how business and consumer marketing operate. According to a Booz & Co and the ANA in The New B2B Marketing Imperative study, B2B marketing has primarily taken an “inside out” approach, focused on the needs of the company and accounts rather than customers.

By contrast, 85% of B2C marketers, who take an “outside in” approach said they were involved in growth initiative decisions which are considered to be strategic such as new market entry, customer relationships and market driven product development.

Additionally, 42% of B2C marketers play a key role in building customer relationships, versus 8% of business marketers. B2B marketers said that “Customers are rarely driving the process and their input is seldom integrated from end to end.”

If today’s business buyers really are “educated consumers” as Homlish suggests, then business marketers can no longer be left out of customer and product conversations. It also means that organizations that target business buyers, who has given lip service to transitioning from being “product led” (inside out) to “customer focused” (outside in) now need to act. And the tip of the spear for driving that change – is marketing.

By better understanding and influencing the needs, desires and emotional drivers of individual business consumers, marketers will be in the strategic conversation and lead the transition. This is the key to unlocking the executive suite.

However, the organization is not just going to give marketers a seat at the table and there is a good possibility that executives don’t get it. As one of the marketing directors said in the study; “Marketing is just not in the DNA of senior management.” You will have to make it happen.

The study concludes that; “Core marketing capabilities – those that directly influence customers – have the highest correlation to market share growth.” Senior executives may not understand marketing but they do understand growth.

The Top 10 Laziest Sales Tactics

Original post date August 27, 2010

The amount of “lameness” on the part of some sales people (and some marketers) has now come to a point that I think a public flogging is in order. To those Michael Scott’s of the world (and I like Michael), know that we are on to you. The following tactics have never, and will never, produce a lead.

1. Filling out a company’s contact form on the website with ”contact me if you need…” Yep, I’ll get right on that. (Click on the image below, it may take a moment to build).

Mike, for example, was able to jam an entire spam email onto our company contact me form, impressive. Sure, I will take the time to read the entire message box and get back to you.

But wait, sensing that I might not take him seriously, he submits the form again 2 minutes later.

2. Sending an email blast with the generic intro of “Dear Sir.” Forget everything you’ve learned about 1 to 1 marketing, personalization, relevancy, this just might work. Just get a list, and go.

3. Even better, the telemarketing of version of the “no effort” approach. Cold calling and asking; “can you please tell me who handles…” Instead of you doing your job, you’re now asking me to do it for you — beautiful.

4. Some telemarketers have taken it to a whole new level. Love the folks who leave a message without saying why they are calling, but then ask you to call them back. And my personal favorite — the rep who invented the “I’m returning your call…” It’s like the guy you knew in college that spent hours figuring out how to cheat for a test, instead of using the time to study.

5. Advertising your services in the comment section of a blog. Let’s take Jeff D, he didn’t even try to hide it in a link. He went straight for the kill.

It’s not all bad because he does give me “props” at the end of the ad…”I like your information it is helpful to me.” Mmm, is it helpful because it gives you an opportunity to display spam? Apparently so, because Jeff D comes back 6 days later, this time pimping new services, Website design and development. Notice I get no “props” this time. Pretty tricky changing the name of the company, almost didn’t catch him.

To Jeff D, and all the other spammers, know that bloggers decide whether or not to post your comments. The comments above never made it public, I saved them for my own personal enjoyment, and this blog post. Also, know that Blogspot, as well as other platforms, now have enable spam filters. Good luck on future postings.

6. Posting a discussion within a Linked-in group that isn’t a discussion, but rather, an advertisement for your company…it’s not a discussion; it’s spam, and it’s annoying.

Take Mr. Gupta for example, at Web Box Office. He’s advertising “Learn the secrets to success with attendee-funded webinars.” Sounds good, huh. Guess who’s paying for the webinar…you are, Mr. attendee, if you register.

7. Using the yellow pages as your prospect database. I’m not kidding, people are still using it. Just wait until they find out about the internet.

8. Offering something FREE, unless it is truly FREE. Taking a credit card number so you can start billing a customer after a “free” trial is not free. This is not selling, it’s scamming. There are rules, some people call them laws, governing this practice. See FreeCredit Report.com for an example of how not to do it.

9. Any email coming from Nigeria, or any other country, offering a fortune if you could just help them by giving them your social security number, bank account number, etc. To good to be true, something for nothing? Any of this ringing a bell? Ok, maybe I’m a little bitter because I’m still waiting for my $1M from the British Lottery Authority.

10. Actually, couldn’t think of a 10th, but I’m sure there’s one or more out there. I’d love to hear your experiences. Add your “Top 10” story in the comment section, but please easy on the spam. Jeff D takes up a lot of my time.

I know that times are tough, but with the amount of information now available in the public domain, there is just no excuse for these tactics other than…just plain laziness. C’mon guys, kick it up a notch! If not, I’ll be out with the Top 10 sequel or maybe a FREE webinar.

Social Media and the Upside Down Funnel

Original post date May 2010, the post was recognized as one of the best post on Social Media for 2010.

As with most new technologies, social media is starting to “settle in” and common applications of the platforms are becoming known. In many large B2B organizations, that means social media is finding a home in the marketing communications group, often landing in PR.

That seems fine for B2C organizations; however, I’m not convinced that it’s the right spot, and/or the only spot for social media in B2B companies.

The Upside Down Funnel

In most B2B organizations corporate marketing’s role is related to driving “top-of-the-funnel” activities. From advertising, PR, and now social media, the focus is on creating awareness…and hopefully, driving consideration and preference. There is another opportunity that may not be considered, a part of the funnel where marketing, in particular social media, can play a valuable role.

It’s at the very bottom of what I’ll refer to as the “upside down” funnel. To find such an opportunity you have to think about a funnel that starts with once a prospect becomes a customer.

Just as a sales funnel has stages so does the customer relationship management process. Companies should be actively pursuing strategies and tactics to retain, expand, grow and then leverage customer accounts to win business.

This is where I think the “sweetspot” is for social media in B2B. Here’s why: social media is about “consumers selling to consumers”, or “professional-to-professional.” If a company does its job of nurturing and retaining customers, it should be able to transition from having a relatively unknown prospect, to a known customer, to hopefully, a well-understood customer advocate…at least that’s the goal.

The Opportunity

If a company enables those customer advocates with social media it gives them a platform to spread the good word. The potential of this opportunity is huge, and for the most part, being missed at most companies today.

As we all know, word of mouth is the most effective marketing there is, enabling it with technology creates scale, and the ability to track it.

To do this successfully, companies have to first identify this opportunity within their organization; second, they have to change their current way of thinking about social media beyond its present use in marcomm and PR.

It means finding uses and opportunities within sales and customer service. Yes, listening to customers chat about your service on Twitter is important, but I’m talking about creative ways to use it for:

customer-to-customer referrals & recommendations
building communities
facilitating discussion groups

The goal is to find ways to emotional connect avid customers to the company and/or products, and then provide them with an outlet to communicate that passion.

What to Do

As relationships deepen, customers begin interacting in more personal channels. Through those interactions they are likely to share more intimate details about themselves, and their relationship with products/services and the company.

Companies have to be able to collect this information across channels to create a complete profile of a customer. If this can be achieved, an organization will have everything it needs to begin enabling, influencing and studying customer advocates.

Finally, watch out for the “silo” effect. Typically, at least three different organizations will be interacting with the customer as the relationship develops. But it’s only one customer interfacing with what the customer expects to be one company. The organization has to be “in sync” because the last thing a company wants is to provide a customer with a platform for communicating the wrong message. Turning an advocate into an adversary is not the goal.

Data Driven Insight

Original post date December 15, 2010

Last month I had the chance to be a panelist at a forum hosted by Wolfgang Jank and the Robert H. Smith School of Business at the University of Maryland. The topic was on Informatics – Data Driven Decision Making in Marketing.

Agreeing to participate without knowing what I would discuss, I searched my files reviewing old project work. Not only did I find a relevant effort, I also realized that I had spent two years working on building and implementing an insights program at a major Financial Services firm.

What’s interesting about the topic is that everyone will agree that they should be more data driven, or fact based, with their decision-making. Heads will nod when it’s discussed, it’s intuitive, and so the question…and the problem, is why doesn’t it happen?

The company I was working with had an abundance of data but were faced with two consistent problems related to the use of it:

Reps wanted better insight
Customers wanted a POV

The first issue we probably spent a good six months on defining what an ‘insight” was, how to create it, and who was responsible for doing it. The second issue was more complicated, and took much longer to resolve.

Over that two-year period, I learned how challenging it is for an organization to use one source of data effectively across the enterprise. Some of the challenges we uncovered were typical such as lack of resources, process, and funding. Others were more challenging: People funded their own resources and research to support their strategy, budget or group.

To begin to solve this complex problem we created a “data value chain” (see below). The starting point was having one centralized source for data. As we discovered, as data flows from across the organization to the customer, enhancements were needed to make it more valuable, like growth rings on a tree.

As data became more customized, and localized, it grew more valuable. This helped to identify why, for example, research that was being produced at corporate was not often used by the sales teams…it lacked relevancy, especially in regions outside of the US.

Once we got everyone on the same page the next challenge was to align the various groups in the organization across the value chain. We learned there could be as many as five different groups involved in handoffs as the data moved across the value chain. This help to explain why product groups were developing solutions without market insights, and regions were not leveraging corporate insights for business development.

As a result, we had to design process maps, hand-off points, engagement process, etc. The elephant in the room, and one of the biggest challenges was wrestling with the budget. The solution for that last huddle was turned out to be pretty simple.

The corporate “insights” team would work with those regions that wanted to work with corporate. Those regions had to be willing to fund resources to finish the “last mile”…building a solution or a customer business cases with a defined solution in mind. Even though everyone wanted more relevant insight, and more defined points of view, not all regions were willing to pay for it. Finally, to secure the funding to make the fixes we had to be able to answer a very simple question; “how does being more data driven provide value to the organization?”

The answer was getting the data closer to revenue or a sale….”turning data into dollars.” The epiphany wasn’t that the value was found at the end of the chain but the number of groups, and the coordination needed to be involved to reach that destination.

Selecting and Enabling Channel Partnerships

Original post date November 22, 2010

On Wednesday November 17th, I attended the Corporate Executive Board’s Enterprise Council on Small Business member meeting in Philadelphia. The meeting entitled Selecting and Building Channel Partnerships included attendees from about 10 member companies such as; Xerox, Symantec, Experian, Erie Insurance and Comcast, who hosted the event.

ECSB practice leaders opened the meeting reviewing recent research on enabling channel partners to effectively sell to small business (title of the post). The research compared the performance of high and low performing partner programs. The meeting also included a review of best practice case studies. Highlights from the research include:

How small business owners want to buy – business owners stated that the type of supplier most preferred was a local supplier (34%), followed by a sales rep selling multiple lines (26%). Top 3 reasons they buy from a local supplier; 1) location, 2) know them personally, and 3) responsiveness (immediate answers to questions).
What high performing partners want from companies – 1) Training (all types), 2) Evaluation (compensation related), and 3) Resources (access to information, additional infrastructure, etc.) This was interesting because low performing partners ranked Leads as #1.
High Performing vs Low Performing Partners – the size or maturity of the partner’s business did not impact the findings, however the age of the ownership team did; younger partners performed better than their older peers.
Partner Compensation – the preferred plan was overwhelmingly “percentage of sales” 38%; flat $ per unit commission 17%, and discount (either dollar or percentage) was 13%.

Highlights from the case studies and discussion:

Measuring Partner Performance – 61% of partners said that they are evaluated on a single metric. Number one metric “Volume of Sales”. Most of the attendees also agreed, only one had used an additional measurement for performance.
Net Promoter – the additional metric used was a net promoter score to measure the performance of partners…really interestiing application of this tool
Using a Third Party Facilitator – the use of a third party mediator was highlighted in one of the best practice case studies. The company used an outside facilitator to help the two companies negogiate a partner agreement. The goal of the mediator was to encourage honesty, and bring about an accurate appraisal of the relationship potential. Really interesting process to get at what’s in it for both parties, and for getting everyone aligned on expectations.

My key takeaway was that there is a significant opportunity to improve partner performance that is being missed. The opportunity is directing partners to desired customers and/or market segments. Granted some partners are selected just for that reason, but in general, companies do not typically articulate what customers they want or who are best for their products. A couple of members mentioned that they organize products against customer segments and assume that points partners in the direction of those customers.

I don’t think that is enough. At the end of the day, manufacturers know how to sell products better then partners. As a result, they should know which customers/type of customer will most value their product or service, and those customers that will be most profitable and loyal. Use this information to help partners understand, and identify what a good customer looks like, and why. Give clear direction on what you want. If there is one thing we’ve learned from previous research, it is clear communications with partners is highly valued, that in itself might be a wi

The Missing Social Platform

Original post date February 17, 2011

On the flight to LA the other day I read an article about Evan Williams, founder of Twitter and Blogger.com. In the article, Williams was asked what the difference was between Twitter and Facebook. He said, “Twitter has information about what’s going on in the world that you care about and that’s different from Facebook’s value proposition, which is a way to stay in touch with people you know.” Coincidently, The Social Network was the in-flight movie.

As I thought about those comments, and the movie, it exposed an area of our lives that seems to be missing from social platforms. If Facebook connects us with our friends and family, and Twitter to “the world we care about,” what connects us in our daily lives? I’m talking about our local area, city and neighborhood, our offline community, the world in which we live everyday.

The more I thought about the need the more it seems like it’s not as much a social platform as it is a functional tool or in other words, an enabler; how can a platform make our lives easier by linking our social network with practical and time saving tools.

For example, my wife is a “room mother” at one of our child’s schools. Her role is to plan, organization and host class events…and chase other parents to contribute time, money, food or all of the above. She uses old Web 1.0 tools like email, a group mailing list, and the phone to accomplish her tasks.

In addition, our kids are active in sports, which requires carpooling, registrations, getting directions to games, status updates on field conditions all done via separate web sites or portals. On top of that our lives – thanks to mobile devices – now mix personal and business hours all throughout the day, and they often collide.

My hope for Web 3.0 is that it will evolve as specific applications of Web 2.0 tools that provide efficiency. These applications will be developed through the greater understanding of how we live our daily lives. The paradigm shift is moving from investing time online to maintain our presence (through FB, etc.) to having online tools that enable us to be more present in our offline world.

What might that platform look like? It’s mobile, and it could include any or all of the following:

Reviews become Recommendations – components of Yelp, Tripadvisors, etc. for local restaurants and merchant, but also, reviews, recommendations and contact information for teachers, coaches, babysitters, etc.
Groups become Communities – like a Linkedin or Facebook group organized around local groups/clubs you participate in, including church, school, athletic teams, etc. Communities are built automatically when you register to join.
Discounts & Loyalty Programs become Active– a Groupon.com like application for local merchants, GPS and mobile enabled to pop offers in the store and automatically tracks your spend. Additionally it would allow us to pool and direct our points to local groups (see above).
GPS locator becomes an Status Alert – a mash up of GPS and Foursquare, alerting us to movement and activity of family members (especially teenagers) at any moment.
Lists with Automated Fulfillment – this is a big one, a digital list builder that sync’s with Peapod (or other Grocery Store home delivery service), with a shopping cart threshold that will automate trip deliveries and credit coupons.
Reminders become Personal Assistants – voice activated and controlled, adds and reads calendars. Helping us remember school plays, play dates, birthdays and especially anniversaries.

In the movie, Zuckerburg asked Sean Parker (co-founder of Napster) his advice about monetizing the site by selling advertising. Sean tells him not to because FB has a coolness factor about it and advertising would kill; “like going to a really great party and telling everyone it ends at 11 pm.”

I’m sure that if I spent enough time on Ioogle or looking in various Apps stores, I could configure solution for my need, but that would take time, rather than give it. What we “35-50 years olds” want is a time machine. Hell, it could include advertising and it would still be cool. Now that’s a great party…and we might even have the time now to attend.

The 5 Questions to Ask to Create a Compelling Value Proposition

Original post date July 16, 2009

I’m about to share with you the secret formula for; 1) creating a rock solid, compelling value proposition (for products, services, solutions, etc.) and, 2) aligning (enterprise wide) your corporate communications. It will seem like a very simple approach, and it is, but once you try to get consistent answers from the organization to the following questions (in order) you will understand why this is so challenging…and why so many companies fail.

Keep this in mind, effective communication to customers must happen through a consistent delivery of the right message, to the right customer, at the right time, in the right channels to facilitate effective, efficient dialogue.

This is how you do it. You have to be able to collectively (with the right internal groups) answer the following five questions in order:

Who? – what audience/segment are you targeting, and why
What? – what do you want/have to say to that segment that is relevant
Why? – why would they listen
When? – when do you contact them, and how often
Where? – where do they want to receive the message

Sounds simple right? Here are a list of challenges you will face when go through the process:

Who – right off the bat, you will find folks arguing about your target audience, the segmentation approach, the segments, etc.
What – oh, you’ll have plenty of things you what to tell whatever audience you settle on but you will struggle with relevancy
Why – now comes the killer question…why would they listen? Seen this question bring grown men (and women) to their knees. The reasons are many; Marketers don’t understand the products, products aren’t differentiated, etc. Getting this question right is the key to the whole process.
When – the challenge is deciding on at what point in a sales process, a marketing campaign, events, etc., and the frequency of contact. Touch them too often and/or at the wrong point you’ll get opt-outs, too infrequently, you’ll get no mindshare.
Where – notice that I said, “they”, and not “you” on where the communication happens. Yes, it’s about your customer and where they go for information not where you want to put it. Find out where your audience goes to get information and/or determine their perference for receiving it. The othe challenge is ensuring that the message fits the channel. Certain messages/value proposition, etc. fit a certain channel better than others. It’s worth the time to figure this out.

This approach creates an execellent output but it will take time, discipline and many iterations to get right…good luck.

How Social Media is Changing our “Work” Behavior

Original post date June 11, 2009
In 1962, Thomas Kuhn wrote The Structure of Scientific Revolution, and fathered, defined and popularized the concept of “paradigm shift.” Kuhn argues that scientific advancement is not evolutionary, but rather is a “series of peaceful interludes punctuated by intellectually violent revolutions”, and in those revolutions “one conceptual world view is replaced by another”.

Social media is creating a “violent revolution” as it relates to our definition of what is accepted as “work.” The paradigm shift is believing that it is acceptable behavior to spent half your time at work on Linked-In, Facebook or Twitter?

In a recent survey by Michael Stelzner, on social media marketing almost 10% of the survey respondents spent 20+ hours a week on social media marketing. Ask senior executives in marketing in my age demographic (age 40-44) and they’ll tell you; “I don’t get it…” In the past, spending time online at work to do personal business was viewed as a major productivity waster.

In a 2006, INC reported the productivity loss to be as high as $544 billion dollars (just think about that, if we all stopped surfing the net at work we could fund the Federal bailout of the Banking, Insurance and Auto industries). As a result, companies took dramatic measures to block or monitor access to sites, tools like IM and other “distracting” technologies.

Now after years of being told that being online at work was a bad thing, this new research and the appeal of Social Media sites, makes the case that it’s not only safe, but in certain cases, necessary to be online. According to the Salary.com & AOL survey, the average 2 hours a day American workers wasted in 2006 surfing the net is now the average time needed to do social media marketing…my, my how times have changed.

And what might be most surprising is that may be “OK” with the boss – the most active users of sites like; Facebook, Twitter and LinkedIn are small business owners according to Stelzner’s report.

Other interest findings from the research:

A New Day is Dawning – although 88% of marketers reported using social media for marketing, 72% have just started (less than 3 months).
Once You Start…You Can’t Stop – the research points out a direct correlation between how long marketers have been using social media and their weekly commitment. For folks just starting, the mean is 2 hours a week, compare that with folks who have been at it for years…an average of 20+ hours.
One Thing Leads to Another – the more time you log, the more tools/sites you’ll use. Similar to the old thinking that cigarettes and alcohol lead to the “harder” stuff, the same is true with Social Media usage. The “newbies” like to start with LinkedIn, hard core users are most interested in social bookmarking sites, FriendFeed and StumbleUpon.
Not the “Youngins” – contrary to popular belief, it’s the 30 to 39 year old segment that logs in the most time, with 44.8% reporting spending 10+ hours a week.
Small Business “Sweetspot” – small businesses love social media marketing because it has generated exposure for their business, leads and partnerships, and to close business.

So if you’re going to be logging some social media hours on the company dime you might want to follow a protocol to keep the lawyers happy. In an article entitled “Managing the Tweets” in the June 1, 2009 edition of Business Week the author lays out IBM’s social media guidelines.

The Price/Value Equation and the $1 Razor

Original post date April 1, 2009

A few weeks ago, my wife and I got a chance to get away for the weekend. On our way to the hotel I realized that I had forgotten my razor. We were passing a shopping center at the time so we pulled in and I spotted a Dollar General store. I went in and bought a $1 pack of razors. A commodity product, down economy, it was necessity; so I figured it was a good decision… until I used it.

The only way I can describe the experience is to say that I couldn’t tell if the razor had a blade on it until it sunk deeply into my skin. It skipped over some parts of my face and dug in on other areas. I had nicks and cuts everywhere; I looked like a schoolboy after his first shave. The lesson I took from this is that sometimes I think you have to feel the pain to understand and/or appreciate the value of quality.

From what I have observed lately, I believe companies are starting to, or will come to this same realization. We’ve all cut back to weather the economic storm. Are companies doing a much better job at managing costs now? Absolutely. Have they finally made the cuts they should have made a year ago? Yep. Have they perhaps gone too far with some of their cost cutting? We’ll see.

What’s important to remember about this economic downturn is that it started in 2007. It’s only gotten dramatically worse in the past six months, but many companies started cutting back long before the current “crisis” hit. As a result, three or four rounds of adjusting cost to meet declining revenues have already occurred.

The fat got cut a long time ago. They cut into the muscle around mid-year last year and now are cutting into the bone in many industries. If you’re a vendor or service provider like us, you may have experienced this first hand. But hang in there; I believe that companies will return to quality providers. It’s only a matter of time before the results of the “nicks” and “cuts” really begin to hurt.

Each company has a different tolerance for pain, but when, for example, the “cost saving” decision to change your outsourced customer service provider leads to rising customer attrition and declining service levels, those “cuts” will begin to sting. When this happens, and customers can see recovery on the horizon, they will come back to quality.

The question you need to ask yourself is; has your organization created the $1 razor? With all the cost cutting, is your product/service at the same quality level and/or can you deliver the same customer experience. When customers do return…so do their expectations.

Be careful, during an economic downturn the price/value equation can become unbalanced. Like many companies, you’ve probably created a lower cost, stripped down model, hoping to gain or hang on to market share. If customers return with smaller budgets, will they adjust their expectations of value as well? Should they expect less? Probably, but will they? Not unless you manage their expectations.

Adjustments will have to be made, and it will not be a smooth shave. You may already have the “nicks” to prove it but don’t let your customers end up feeling the pain.