CRM and Recession

Posted: October 22, 2008 in CRM, Current Affairs


“History does not repeat itself, but it does rhyme.”  Mark Twain

There is a considerable amount of speculation about how the molten mass of what was once our financial system will affect our real economy and, closer to home, the CRM industry.  Many observers take as their first approximation, the Great Depression that started with the stock market implosion of 1929.  I am not that pessimistic.

Some of those prognosticators are betting on a repeat performance of “history” but I don’t share their doom and gloom.  When tempted to, I refer back to one of my patron saints, Mr. Twain.  Groucho is another patron saint but, although he lived through those times, his contribution was to take our minds off of the carnage by making us laugh.

It can be argued that, in a way, history did repeat itself in so far as the current problems were caused by lax oversight and the corruption it spawned.  No matter, that part will always be the same and even the ancient Greeks had that figured out – just read Euripides or Sophocles.

However, it’s what happens on the upswing, once we’ve bottomed out, that matters and that’s what causes History to only rhyme rather than a more sever recapitulation.  So what does the upswing look like at this early time?  For starters, government is doing a lot more than it did in 1929 – back then they did nothing — we’ve learned that much, at least.  The intervention in the global financial markets along with practices that were first innovated in the Depression will prevent the calamity from getting completely out of hand.  Nonetheless, that’s just not losing, which is, of course, very different from winning. 

I agree with those who believe we’re still in for a bit of a recession and that it could be significant.  The last significantly bad recession happened in the 1970’s when inflation ran out of control and oil prices ran quite high for the times.

Getting people buying again will not be as simple as having a sale or implementing technologies that are advertised to “accelerate the sales process” and I expect the next economic expansion will need to be a top down thing because the grass roots are scorched.  If that’s the case the buyers of first resort will be large companies sitting on cash as opposed to small companies that are searching for venture capital.

Even such companies will be careful with their spending and they will be highly value conscious.  I wouldn’t expect them to invest much in an early stage idea the way that typical early adopters buy things more or less to see if they can get a competitive advantage from a new widget.  The translation here is that buyers will be looking for value, for certain ROI and a logical business case. 

So where does that leave us?  It appears to me that the melt-down of 2008 will be seen as the mother of all disruptions in a lot of areas not limited to the technology market, but that’s a good place to focus.  Disruptions are disrupting and that’s as plain and true as it is redundant.  It’s also true that disruption makes things new again and what might not have been possible in the old regime suddenly is.

In business and in CRM there are really multiple disruptions taking place right now, which is why the current times are so challenging.  Financial risk looks different today than it did a year ago, energy prices are very high despite recent price reductions and the business environment is sluggish and will continue that way for a while.

This environment provides a perfect opportunity for innovative technology to come to the rescue as companies search for ways to do more with less such as  maintaining contact with customers without necessarily having to meet face to face.  Technologies that help us understand customers and their buying needs and impulses have been developing over the last several years.  These new tools are about to be placed in a crucible and some will work while others will fail.  From all this we will get new business processes, new products and new companies. 

Change is difficult.  It’s hard and people avoid it when we can but change eventually happens when the consequences of standing still look worse than the consequences of taking a chance on change.  I can see that in CRM for example, we’ve been talking for a long time about the ascendancy of the customer.  CRM 2.0 has been all about that trend but now there is a new urgency for vendors to align with customers and their needs rather than dictating to them.  Companies that have so far only watched the parade go by will have to learn to march quickly.  It’s time for all of us to change, standing still is not an option and we can only imagine the disruptions ahead.  It may not be pretty, but that’s the way we do things.

 

So, what did you think?

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