Many businesses are currently struggling to find ways to cut costs and make ends meet, and ambitious new strategies and growth goals are being put on hold till the economy rebounds. But even in a time of uncertainty and contraction, smart companies can find opportunity and growth.

1. W H I T E
P A P E R
How to Profit in a Downturn
4 Customer-Centric Strategies for Growth in a Challenging Market
Executive Summary
The sub-prime meltdown hit the housing and financial markets hard, but its ripple
effects, combined with rising gas and food costs and general economic uncertainty,
have resulted in a slowdown being felt across industries and around the world.
Many businesses are currently struggling to find ways to cut costs and make ends
meet, and ambitious new strategies and growth goals are being put on hold till the
economy rebounds.
But even in a time of uncertainty and contraction, smart companies can find
opportunity and growth. The secret lies in the invaluable assets your company
already has: your customers.
In this white paper, learn how your organization can use customer-centric strategies
and CRM tools to maximize the value and loyalty of your customer base, get insight
into new areas of opportunity, and do more with less, not only surviving, but thriving,
in a time of economic uncertainty.

2. Introduction: Tough Times Unfortunately, companies' internal adjustments are
just the tip of the iceberg. Market volatility, economic
Call for Strategic Moves uncertainty, and negative headlines have made customers
skittish—about their finances, their purchases, and their
While the word “recession” causes many to bristle, vendors and partners. Consumers and businesses alike
there is no question that financial markets in developed are rethinking their plans and budgets, concerned about
countries worldwide have taken a lashing due to the the hit their own finances have taken or could take as a
sub-prime lending collapse and ensuing credit crunch. result of the current economic situation. As they do so, the
The financial services and housing industries took the knowledge that many of their vendors are busy grappling
first—and worst—hits, but the ripple effects, combined with cuts and their own financial concerns may lead
with the high price of oil and other commodities, have some customers to question whether their best interests
led to a widespread economic slowdown that is affecting are really top of mind for their vendors at the moment.
businesses across most industries. Unless steps are taken to correct this perception, a lack
of customer trust and loyalty is the inevitable result—and
If any word best characterizes current economic
one with the potential to have a more lingering effect on
conditions, it may be “uncertainty.” Not all companies are
your business than short-term cuts or losses. Erosion
pessimistic, per se, but at a minimum, most are feeling
of your customer base and customer confidence could
cautious, as uncertainties
present serious long-term problems for your company. As
abound: regarding consumer
a result, it’s imperative to give customers the increased
Companies that take spending, commodity prices,
attention they need in times of uncertainty—in spite of
their focus off of customer construction costs, interest
reduced staff and budgets and a multitude of other issues
satisfaction at this time rate changes, GDP growth,
and distractions arising from current conditions.
inflation, and more.1 And in a
risk more than losses:
July 2008 speech to Congress, Companies that take their focus off of customer
they miss out on Federal Reserve chairman satisfaction at this time risk more than losses: they
a compelling opportunity. Ben Bernanke cautioned miss out on a compelling opportunity. The fact is that
that the U.S. economy faced existing customers are the secret to weathering the
“numerous difficulties” 2 current storm. With new-customer acquisition costs far
and serious risks in the road to economic recovery, exceeding retention costs and difficulty attracting new
leading many companies to believe that a recovery is customers in a down market, it does not require advanced
not yet imminent and that they could be grappling with calculation to understand why companies should be
a challenging market for many months ahead. Similarly, looking to their customer base as a cost-effective source
Bank of Canada governor Mark Carney has recently of revenues. Similarly, with the credit crunch and the
underlined that the “deterioration in economic and reduced availability of private equity funding, mergers and
financial conditions in the United States will have direct acquisitions are expected to decline globally in 2008,4
consequences for the Canadian economy,”3 and indeed, meaning that most companies will need to look internally,
the downturn is far from reserved to the U.S.: countries rather than externally, for additional sources of revenue,
around the world are feeling the impact. focusing on organic growth.
How are companies dealing with the uncomfortable To survive and thrive in a downturn, businesses need to
combination of an economic slowdown, high costs, and adopt a thoughtful and strategic approach to building,
widespread uncertainty? First, job cuts have become extending, and unlocking the value in their customer
a necessity for many businesses as they try to reduce relationships. The tools to implement these strategies are
expenditures. Accompanying these job cuts, many customer relationship management (CRM) solutions.
companies are engaged in belt-tightening, trying
to cut costs as they prepare for whatever the months
ahead hold. Using Customer-Centric
Strategies to Survive and Thrive
The concept of “customer-centricity” has been steadily
gaining traction across a number of industries for the
1. Hines, Patricia. “From Crunch to Squeeze: Global Impact past several years. More than just a feel-good concept,
of the Credit Crisis on Commercial and Small Business
when taken seriously, customer-centricity is a model that
Lending.” TowerGroup, January 2008.
can profoundly impact a business’ processes, culture,
2. Bernanke, Ben. Semiannual Monetary Policy Report to the and technology. Customer-centric strategies make
Congress, July 15, 2008. the customer the focal point around which a company
3. Carney, Mark. Opening statement by Mark Carney, Governor
of the Bank of Canada, at a press conference following the
release of the Monetary Policy Report, April 24, 2008. 4. Hines.
Pivotal CRM | White Paper 1

3. structures its operations. The goal is not only to deliver When a prospect becomes a customer, the real
a more satisfying customer experience, but to provide relationship management begins. Businesses need to
greater customer insight and value to the business, implement consistent and reliable processes to ensure
thereby improving profitability. that the drive to acquire customer knowledge does not
drop off at the point that the business is won, but
Given that retaining customers, finding new avenues for instead intensifies. During and after the welcoming
organic revenue growth, and improving performance of new customers and processing of their orders,
despite cuts are among businesses’ most urgent needs companies need to use CRM workflows to build out
under current economic conditions, customer-centric deeper customer knowledge and strengthen the
strategies offer compelling advantages, now more relationship, using a CRM-defined relationship plan
than ever. to ensure regular touch-points and continually refresh
and add to their customer intelligence.
So how can customer-centric strategies help your
company survive and thrive under tougher economic Under tougher market conditions, this holistic view of the
conditions? As the concept suggests, it all centers on customer and regularity of contact becomes invaluable.
the customer. Not only does your business have a complete and current
view of the customer, but also an established relationship
1. Get Closer to Your Customers to leverage. This provides opportunity to your company on
multiple levels.
As customers react to negative headlines, economic
uncertainty, and market volatility, your business cannot First, companies with a 360-degree view of customers
afford to keep them at a distance. In fact, you need to get provided by rich CRM data can more accurately assess
closer to your customers than ever before. customer value. This value is not always direct or obvious
from basic account data. For example, a customer that
Customer-centric strategies are predicated on the represents modest revenues to a business might be
establishment and ongoing enrichment of customer part of a family, parent company, or conglomerate that
knowledge and the need to collect and apply this overall represents major profits to the business, and might
knowledge intelligently at have influence over several other potential or existing
every stage of interaction. customers. In B2B scenarios, a customer business might
True customer value is not This means not only getting to represent significant revenues to a company, but it could
always direct or obvious from know your customers better, be that only a few divisions, departments, or offices are
basic account data. but having the tools to take the true sources of this value, and the opportunity to
advantage of this knowledge extend and expand this relationship is being overlooked.
where and when it offers the For large companies with multiple product lines, operating
most value. To accomplish this, companies need to use regions, and divisions, the same customer might be a “tier
CRM systems to their true potential: not just as data 5” asset to one area of a company but a “tier 1” customer
systems, but as the technological enablers of customer- to another area. Furthermore, a customer might have a
centric business strategies. moderate direct impact on revenues but could be bringing
in exponential value by referring other customers to the
Building up this customer knowledge begins long before
business. With the proper application of CRM technology
an individual or organization becomes a customer. It
and strategy, all of these different facets of customer
begins the moment they are identified as a prospect.
value can be made clearly and easily discernible within
Using good CRM marketing tools, companies can build
the system.
out prospect profiles that combine demographic data and
publicly available information with behavioral responses Applying this knowledge, the company can ensure that
and information provided by the prospect through each it keeps its focus on customers with an understanding
marketing or sales interaction. Using this information, the of their true overall value to the business, making it
business can more effectively segment its audience and clear exactly which customers are most critical to the
target its marketing activities, engaging the prospective business’ bottom line. As economic conditions impact
customer with high personalization and relevance from the not just companies, but their customers, this can also
earliest stages of the relationship. help companies take a longer-term and better-informed
approach to navigating the downturn. For example,
When a prospect becomes a defined business
a company may want to extend particularly flexible
opportunity, this rich CRM profile ensures no employee
payment options to certain customers, with a view to
need ever walk into a sales opportunity blind. With
keeping its most valuable customers for the long term,
comprehensive information about the prospect, past
rather than losing them to short-term economic dips.
interactions, and the lead source, sales personnel have
the background they need to position products and
services more effectively and win more business.
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4. Furthermore, as they look to increase revenues from Providing high-quality customer experiences is
their existing customer bases, companies that have rich understandably challenging when trying to operate with
customer profiles are also better positioned to identify reduced resources. Yet as previously noted, the risk of
new revenue opportunities by up-selling and cross-selling losing customers in a time of uncertainty and skittishness
products and services. Given the significantly lower cost is very real, and failure to keep focus on customer needs
of selling to existing customers versus acquiring new and sentiments could significantly worsen the long-term
ones, this can prove a very cost-effective approach to impact for companies of what should otherwise be only
revenue growth. With deep information about customer a temporary economic setback. Hard-earned customer
attributes and interests, relationships could be quickly lost if companies provide
companies can apply inferior service due to cutbacks.
The same CRM tools that strategic plans to expand
and deepen their relationship How can companies possibly improve customer service
help companies increase
with the customer, up-selling while cutting costs? The reassuring answer is that the
the value of their customer same CRM tools that help companies increase the value
and cross-selling the most
relationships can also help relevant products and of their customer relationships can have an indispensable
them serve customers more services. Regular touch-points side benefit here: they can also help companies serve
cost-effectively. established through a CRM customers more cost-effectively.
relationship plan provide the
Some cost-saving insights that can be uncovered through
perfect venue for exploring
CRM have already been hinted at in this paper. When
customer interests and introducing new offerings. The
companies understand customer interests and attributes,
items discussed and customer reaction can be clearly
for example, they can focus their efforts more strategically,
noted within the CRM system to ensure customers are
reducing wasted expenditures on poorly targeted
not offered the same products and services by different
marketing campaigns and sales efforts. CRM data can
parties or at successive meetings unless appropriate.
be used to more effectively segment customers and
Similarly, a good relationship plan and comprehensive prospects to improve the relevance and success of sales
customer profile are of tremendous value in identifying and marketing activities. In the same vein, CRM systems
customers at risk in a time of uncertainty. Regular that provide users with an instant understanding of true
touch-points give the company the opportunity to customer value, including referrals and influences, can
gauge customer sentiment and address any concerns be helpful in determining the level of service appropriate
proactively. Thorough profiles that aggregate data across for an account. This need not mean providing inferior
different areas of the business are also essential to service to any customer; nonetheless, it is important
distinguishing true risk from false alarms. For example, a for a company to understand when the cost of serving
customer cutting back on their purchases with your firm a customer is out of alignment with the value of the
may simply be belt-tightening—or they may be in process customer to the business, so that it can assess whether
of switching to a competitor. The ability to differentiate a better solution or more appropriate fee structure could
between the two scenarios and react accordingly is a be offered to the customer to keep them profitable to the
function of having a true 360-degree view of customer company. Such insights can help companies prioritize
interactions and a sound relationship plan that enables their expenditures and focus reduced budgets on the
you to gain more insight into your customers’ actions. most effective activities.
As these customer-centric approaches suggest, customer Some of the greatest cost savings from CRM, however,
intelligence is a company’s true goldmine in tougher come from the automation and process streamlining
times. Getting closer to customers is the smart way to achievable with CRM tools. To really look at how
grow revenues in a time of economic contraction: as customer-centric strategies can be embedded within
you increase your value to them, you increase their their organizations, companies need to drill down to
value to you. the level of customer-facing processes. Greater speed,
consistency, and efficiency in these processes benefit
the customer as much as the business, so fine-tuning
2. Do More with Less and standardizing customer-facing processes is
As many companies deal with the cutbacks that are the a natural part of implementing a customer-centric strategy.
almost-inevitable result of a tougher economy, they are Using a flexible CRM system, companies can build
faced with the challenge of trying to do more with less these optimized marketing, sales, and customer service
thanks to lower budgets and fewer staff. At the same time, processes right into the system, automating formerly
expectations remain demanding: customers and internal manual tasks and streamlining the flow from one step to
and external stakeholders alike demand that companies the next. Workflow tools define exactly what needs to be
find ways to perform despite these constraints. done as part of each process, eliminating confusion. For
Pivotal CRM | White Paper 3

5. complex processes involving multiple stakeholders, steps growth and overall profitability.”6 Though this prediction
can be automatically assigned and can run concurrently was specifically targeted at the financial services industry,
or in succession, as appropriate, allowing for smoother there is little reason to think that businesses in many other
collaboration and time savings. Multiple individuals industries, most of which face similar margin pressures
can serve a customer as part of the same process in and competitive struggles, will not equally need to pursue
a coordinated manner, because every person is kept different revenue sources to succeed and differentiate
fully informed through the CRM system’s centralized themselves. As companies seek new ways to grow
point of reference. At any organically, not only in response to the current economic
time, team members or situation, but also to general competitive and market
Deep CRM data is a executives can check the pressures, they are increasingly under pressure to find
treasure trove that can CRM system to see exactly these “creative” new streams of revenue. Luckily, this is
be mined to uncover new what stage a deal or process another area in which good customer intelligence can
product or service ideas and is at, allowing for better provide immense value.
coordination of personnel and
revenue streams. resources, as well as more In addition to helping pinpoint opportunities with individual
accurate and hassle-free customers and position relevant products and services
revenue forecasting. This allows for greater efficiency and to increase up-selling and cross-selling success as
productivity, effectively empowering businesses to do described above, deep CRM data is a treasure trove that
more with less. can be mined to uncover new product or service ideas
and potential revenue streams. As company personnel
Recent analyst opinion supports the contention that engage in regular interactions with customers according
automation, process reengineering, and streamlining are to the relationship plan, they have frequent opportunities
key to responding strategically to the current economic to listen to customer concerns or feedback that can help
conditions. TowerGroup, for instance, notes that: identify product or service gaps and generate ideas for
new offerings. Similarly, if a company is considering a
As a result of recent losses and persisting uncertainty, new offering but wants to test the idea before investing
2008 will witness a spate of downsizing and consolidation. in it, close customer relationships and regular planned
Savvy companies will reduce their expense base more interactions provide greater opportunity to solicit input and
effectively by fundamentally reengineering their business gauge interest—potentially creating a built-in market for
processes…. Streamlining to gain cost efficiencies and the offering before it even launches.
agility is essential. However, downsizing alone cannot lead
companies to greatness.… [A]utomation, interconnectivity, Moreover, companies that focus on strategically building
and online service capabilities have become a necessity.5 up customer intelligence have the perfect information within
their CRM systems to perform advanced analysis to spot
As this passage suggests, both process and technology trends and identify important correlations that can help
are critical to survival. Downsizing without accompanying them gain insight into potential opportunities. For example,
efforts to refine processes and use automation and looking at the common attributes of their most valuable
interconnectivity to offset cuts will leave companies customers could help companies focus on new offerings
unable to operate resiliently. This could explain why, in for these customers; it could also provide insight into how
spite of budget cutbacks in other areas, many companies they might replicate their success with these customers in
are increasing their technology budgets: it seems clear other accounts. Analyzing trends around revenue sources
that technology is essential to enabling companies and customer retention rates can also help companies see
to succeed in spite of other cutbacks. As companies exactly the ways in which the economic downturn is hitting
examine where they can focus their technology budgets their business—and their customers—and react more
to give them the greatest advantage under current strategically, stopping negative trends in their tracks before
economic conditions, a CRM system’s ability to support it’s too late and spotting positive trends they can take
both cost efficiencies and new revenue opportunities advantage of before the competition.
make it worthy of serious consideration.
With the customer data to uncover new ideas and
the customer relationships to help test and validate
3. Find Creative Revenue Opportunities them, companies can identify more creative revenue
Cost-cutting is critical to weathering a downturn. But opportunities and pursue them with lower risk.
is it enough to help companies thrive in the long term?
Analyst firm TowerGroup notes: “In the years ahead, a
key factor for competitive differentiation will be the ability 4. Benefit from Globalization
to counter the pressures on profit margins with much Today, many companies operate on a global, or at least
more than just cost efficiencies. Successful companies multi-regional, basis. For most, the process of becoming
will find creative revenue sources to sustain continuing a global business has had its growing pains. Many
businesses have struggled with the challenges of growing
5. Kopp, Guillermo. “The TowerGroup Top 10: Business Drivers,
Strategic Responses, IT Initiatives in Financial Services.”
TowerGroup, December 2007, p. 9 6. Ibid.
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6. through mergers and acquisitions, trying to combine globally, expanding the relationship on a whole new level
disparate systems, processes, and cultures; others have and taking it to new heights of loyalty and profitability.
faced similar challenges when expanding organically
into new markets with new regulations, competitors, and As companies look for creative ways to grow under
considerations. For a lot of companies, achieving their current economic conditions, the smart ones will think
vision of becoming an effective global business is still beyond the confines of their region. By taking customer-
a work in progress. centric strategies to a global level, companies stand to
benefit in an unprecedented manner from the efforts
Challenges aside, the current economic situation offers and investments they have made both in international
a perfect illustration of why “going global” can offer expansion and in their customer relationships.
great benefits to companies. As interconnected as
world economies are, events that work to the detriment
of one country’s economy often bolster another. As a Conclusion:
case in point, while the U.S. sub-prime crisis is wreaking
economic havoc around the world, it is having a much
The Time to Act Is Now
harsher impact on developed economies than on While companies are bound to take different approaches
emerging ones. While some countries are bracing for to weathering current economic challenges, what seems
an uncertain and volatile year economically, others are indisputable is that they will have to take action of some
positively bullish. IMF growth forecasts for 2008 for China kind to effectively survive them. With every passing week
(10%), Russia (6.5%), and India (8.4%) significantly that a company does not have a well-considered strategy
exceed the average of 4.75% worldwide and 2.2% for in place to combat the downturn—one that goes beyond
industrial countries, not to mention the U.S.’s weak 1.9%.7 just cost-cutting—it is missing opportunities to better
position itself for ongoing growth.
What this means is that a diversified global company
with the resources and infrastructure to support strategic In this white paper, we have presented four key ways in
pursuit of worldwide opportunities is in a perfect position which customer-centric strategies can help companies
to mitigate the effects of the current economic slowdown increase revenues and cut costs to help counteract
in North America and Europe. This is where the rubber the negative effects of current economic challenges:
meets the road for global companies: do they have the by deriving greater value from their customer base, by
systems in place to take advantage of these conditions? increasing productivity and streamlining processes, by
Those that do can place their focus on regions of growth finding creative revenue sources, and by taking advantage
and significantly offset the impact of the downturn. of existing relationships to exploit global pockets of
opportunity. We contend that by using CRM to implement
Used in tandem, global strategies and customer-centric these customer-centric strategies, companies can not
strategies may just offer companies the greatest only survive a downturn, but thrive in it.
advantage yet. Of course, regardless of their region
of operation, companies can use the aforementioned While it is critical that companies act immediately to
customer-centric strategies to deepen their customer embrace customer-centric strategies, they can rest
relationships, maximize the value and opportunities from assured that such a move is neither a quick fix nor
their customer base, and cut costs through process a short-term solution. By introducing tools and strategies
optimization and automation. But when taken to the that provide more customer focus and insight, companies
global level, the opportunities made possible through this are taking part in a seismic shift in the modern business
scenario expand dramatically. world away from product-focused operations toward
customer-centric ones. Even if steps taken now are
For today’s company, a true “360-degree” customer view in response to current market conditions, companies
is a global 360-degree customer view: one that reveals should not be short-sighted: they should take care to
worldwide value, opportunities, and connections. Using reengineer processes to be effective over the long term
this view, a company’s operations in India or Russia can as well and choose flexible, powerful supporting solutions
see which businesses and individuals the company has that will evolve with their customer-centric strategies. In
relationships with in other regions and use this information doing so, they will not only empower their employees to
and related contacts to help build new business in their derive value and growth in the short term, but create a
region. The simple fact is that just as companies have resilient platform for ongoing insight and returns from their
gone global, so have their customers—opening up customer-centric strategies.
a wealth of new opportunity. For example, a manufacturing
company that is a customer of your business in the U.S.
may well have plants in India or China. With a global
CRM view, your company’s operations in those regions
could use the U.S. relationship to approach the overseas
branches about additional opportunities. In this way,
companies can build their relationships with customers
7. Hines.
Pivotal CRM | White Paper 5

7. Pivotal CRM
Pivotal CRM helps organizations create superior customer experiences and offers rich functionality, a highly flexible
application platform, a full customer relationship management application suite, and best-in-class customization
abilities, all with a low total cost of ownership. The Pivotal CRM software suite includes a powerful application platform
and additional capabilities in analytics, mobile CRM, partner management, and marketing automation.
Designed to produce meaningful increases in revenues, margins, and customer loyalty, Pivotal CRM is used by more
than 2,000 companies around the world.
For more information about Pivotal CRM, please visit www.pivotal.com, or in North America, call +1 877-PIVOTAL.
For more information or a complete list of our worldwide offices, please visit www.pivotal.com.
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