In markets on January 17, 2012 at 2:42 am
Firms competing in mature markets usually apply two broad strategies to secure growth and profitability. The first strategy centers around aggressive pricing. This strategy is particularly tempting in downturns or to force competitors out of the market. But overall, it is a shortsighted strategy and hurts long-term profitability despite apparent initial success in terms of growth. The cut in margins is usually the start of a downward spiral followed soon by some cost cutting in its various forms, which is the ultimate goal of most Business Process Management (BPM) projects and the only justification for oversimplifying customer-facing processes with flowcharts. The result is poorer service and product quality, the outsourcing or even complete elimination of services with all its dire consequences but without bringing back margins to sound levels.
The other strategy is about focusing on customer outcomes. This requires a shift from the notion of products and services as a commodity to that of shaping the perception of the customer in terms of value received. In this setting the customer judges about the successful outcome of a business process instead of a bureaucratic system. In most cases this is a substantial differentiator from the competition. However easy it sounds this shift is not something that can be achieved overnight and it is certainly no one-off procedure.
Starting with the focus on customer outcomes requires goal-orientation, transparency and empowerment in process planning and execution. It considers knowledge and an organization’s adaptive capabilities to put it into action for accommodating different customer preferences. Giving participants the means to create a value perception interactively instead of mere exception handling along a sequence of predefined steps builds the cornerstones of long-term customer relationships which result in increased loyalty and revenue.
In value proposition on November 5, 2009 at 6:10 am
In mature markets with fierce competition there are usually two broad strategies to foster growth and become more profitable. The first strategy is to be price aggressive. This strategy is especially popular in downturns or to drive competition out of the market. Yet it is a shortsighted strategy and does not do much for profitability on the long run even if it may be instantly successful for a short time in growth terms. If businesses cut their margins this usually initiates a risky downward spiral. Reduced margins are often followed soon by some cost cutting, which then results in poorer service and product quality or the complete elimination of services, layoffs, still more reduced capacity of servicing customers, ensuing negative publicity and word of mouth and a long and often futile struggle to bring back margins to healthy levels.
The other strategy encompasses the shift to a customer-driven organization. Now this term is used in abundance but what is it all about? The main idea behind the customer-driven approach is that of another transformation taking place, namely from the notion of products and services as a commodity to that of shaping the perception by the customer (“the experience”) in a very particular way that is a real differentiation from the competition. However easy it sounds this transformation is not something that can be achieved overnight and it is certainly no one-off procedure.
A customer-driven approach is marked by flexibility and quality. Flexibility means an organization’s capability to accommodate different customer preferences (which may change over time); quality means that all customer communications have to be accurate, clear, consistent and relevant. Relevant communication again is personal and relating to individual context based on consolidated data. These are cornerstones in building long-term customer relationships which result in increased loyalty and revenue.
ISIS Papyrus understands the challenges large corporations face to manage processes and to produce, manage and distribute personalized, data-driven and process- related customer communications to remain competitive in today’s market. ISIS consultants analyze a corporation’s unique communication goals and then provide the tools and expertise necessary to produce high-volume, personalized paper and electronic communications that significantly improve customer and prospect responses as well as client satisfaction.