Nearly every day, I read about companies struggling to grow revenue. So, what do they do? They resort to corporate restructuring (they sell assets, spin off a division, set up a real estate investment trust, move to a lower cost state or even move headquarters and factories to other countries) or implement across-the-board, painful cost cutting to grow profits.
Sure, businesses get bloated over time, and there is a need to reduce headcount, change department heads and automate processes. Or the business strategy can change, and once important divisions are no longer key to the corporation; therefore, spinning off a division may allow it to prosper under new owners and/or management—all done in the name of creating shareholder value and raising stock prices.
I watch in amazement when businesses don’t look harder at how they can run what they have more efficiently. Yes, it may be more work than manipulating assets or the balance sheet, and the headlines aren’t there, but doing the blocking and tackling in business is what will create the long-term win for all of the stakeholders: employees, customers and investors.
Employees don’t have the luxury anymore to view their job as just a place to get a paycheck. If a company is going to succeed and prosper (i.e., preserve and add jobs), employees need to be thinking like business owners. Let’s take a proactive, bottoms-up approach and ask:
- How can I reduce costs?
- How can I speed up cash flow?
- What can my department do to become more efficient?
- What can my department do to increase sales?
- What can I do to make customers more satisfied with my department and my company?
In the world of customer communications and document management, this means:
- Getting more customers to opt in for e-delivery
- Looking for efficient ways to cross-sell at every opportunity
- Modifying forms so they are crystal clear and don’t result in calls to the call center
- Getting more customers to visit your website and register for self-service
- Leveraging the rapid growth in mobile devices
- Getting customers to pay faster and more efficiently via electronic check versus credit cards
The goal—having low cost to service (and satisfy) customers who:
1. Receive all communications via e-delivery
2. Pay monthly on automatic recurring payment plans via automated clearing house (ACH)
3. Use the portal for self-service
Of course, just saying these things means nothing. It requires focus and action. Let’s face it: Paper and the United States Postal Service (USPS) works for the majority of end customers. Customers are happy to leave things as they are, unless they have a compelling reason to change.
However, staying with the status quo goes with an opportunity cost to the company. You, as management and “owner” of your company, must acknowledge this opportunity cost as you compare it to other opportunities. From my experience, rarely are there investments that have a better return than ones which deliver the above goal through e-delivery, e-payment and self-service, and rarely are you going to find opportunities with so little risk of achieving the desired outcome: lowering the cost to service a customer while maintaining a high level of satisfaction.
So, what are you waiting for? Now is the time to break with the status quo. Opportunity knocks, and next month we’ll talk about some paths to get there.
Richard Rosen is the chief executive officer of The RH Rosen Group, a firm that provides solutions to help businesses improve processes and customer communications with the intent to create real, recurring benefits in: cost reduction, electronic payment, shipment tracking and printing/mailing. Contact him at RichR@RHRosenGroup.com or visit www.rhrosengroup.com.