There's no denying it any more. We're in for a rough ride in 2009. Budgets and staffs are shrinking. Projects are going on hold. Visibility is low.
But even in the most difficult economic climate, there are business opportunities for the disciplined and resourceful. Here are some strategies we see our client organizations using to not just cope but shine in these uncertain times:
We're all familiar with the 80-20 rule: the principle that 80% of your revenues come from 20% of your customers. If you haven't already done so, identify your most valuable customers, find out what they want, and make sure they get it. This is still the most reliable way to ensure that you get what you want from them.
How do you know what they want? Industry research firms like Forrester and eMarketer are great resources. So is your web traffic data and your call center. But the best way is to ask them directly through interviews or online surveys. When you really understand your customers and how they interact with your business, it's easy to spot opportunities to win them over with more relevant messaging, well-chosen usability enhancements or more effective merchandising.
Large enterprise projects tend to absorb the bulk of an organization's attention and resources. But smaller, less resource-intensive projects can have a greater impact on your bottom line with less pain and risk.
Take cosmetic site improvements. While many people equate website progress with more and better technology, simple aesthetic enhancements can be the most profitable. Here are two examples from our own practice:
- A leading social media site was driving lots of visitors to its homepage, but failing to sign up very many of them. By tuning up their homepage messaging and streamlining the sign-up process, they increased member registration by 200% with no changes to underlying technology.
- An international hotel group sought to improve the sign-up rate for its customer loyalty program. By more clearly communicating program benefits and streamlining the registration process, they increased their sign-up rate from 8% to 16%. Again without laying a hand on their technology.
You probably had an extensive project pipeline before the economy slowed down. Have your priorities changed? Now is the time to revisit your pipeline in light of new realities and re-prioritize it based on factors such as:
- Expected ROI
- Time to market
- Overall cost, and
Once you've identified your most high-potential projects, move them up the priority list and make them your focus for 2009.
If you're not already doing so, now is the time to mine your website traffic for profitable insights. There are still too many companies that aren't fully benefiting from web analytics. What are the top paths that visitors take on your site? Where do they leave it? Which customers and activities produce the most revenue? The answers to these questions will help you focus limited resources where they matter most.
For example, research shows that the majority of website visitors no longer enter websites through the homepage. Instead, they're landing on lower-level pages directly from search engines like Google or Yahoo! Do your top landing pages offer all the information that a visitor needs to make a decision to do business with you? Do you even know what your top landing pages are?
A year ago, good interactive talent was scarce and expensive. Today it's a buyer's market. If you can afford to hire, now is the time to recruit some of the great talent that's available out there. If you're not in a position to add headcount, you can still make the heads that you have smarter. Sign them up for training in critical skill areas like search marketing or web analytics, invest in new software tools or add some great new books to your company library.
Many organizations struggle to think and invest for the long term. But diminished expectations and smaller budgets can open a window of opportunity.
For example, if you don't have the resources for major initiatives this year, invest in the first phase of a larger project instead. You can start by gathering requirements or creating a proof-of-concept.
If you don't want to start something you can't finish, you can invest in a small, stand-alone project with lasting upside. Customer interviews or surveys can generate insights that will benefit your organization for years to come. Customer personas are another tool that – created once – will inform your marketing and web initiatives over many campaigns.
While the strategies described in this newsletter can be especially useful in a slow economy, they are the same things you should be doing in any economy – good or bad. So develop these habits now and you will doubly benefit when the good times return.Next Issue: Shoot, ready, aim: Deadly project planning mistakes.
Cutting customer defections by just 5 percent has the effect of boosting profits between 25 percent and 95 percent.– Harvard Business Review
By Charlene Li and Josh Bernoff
Probably the best treatment to date of the social media opportunity. An Amazon.com Best of 2008 pick.
Learn more at Amazon.com