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Darim Rahmatallah and Adrian Pearce from tech company Thales give advice on how to improve the customer experience and increase profits during times of economic uncertainty.
This year has brought a unique mix of challenges to software-led businesses. Macroeconomic conditions have forced software buyers to evaluate their wants versus needs, leading to software vendors experimenting with products, pricing and value to reduce risk, prevent churn and spur growth.
Software buyers may start making cuts to reduce their budgets, and customers may question if they even need certain services.
These changes sometimes cause software vendors to skimp on digital transformation to protect their revenue.
This can lead to the reliance on outdated and cumbersome processes and affect the customer experience (CX) when the customer does not receive the same value of service as before.
Poor customer relations leads to a decline in revenue, and ultimately exacerbates the very problem it was trying to avoid as vendors end up hurting themselves and their return on investment (ROI).
What’s the solution?
In such times, companies should be both creative and strategic to stay afloat and potentially thrive in an economic downturn.
It is important to lean into digital transformation and foster a software-monetisation strategy that can increase value, decrease costs and create an enriching customer experience, all of which will have a lasting impact on your profitability.
So how can you ride the wave of digital transformation and continue growing without having to surpass your budget? Put simply, it comes down to working with what you already have and being imaginative in the ways these resources can be used.
Namely, there are three ways to leverage software and data tools for success despite the economic odds.
Lean into new ways to sell
With CX becoming more central to company success, customer retention and engagement can make all the difference.
In an economic downturn, software vendors can’t spend too much time developing net-new products that may or may not appeal to a market of customers trying to downsize their costs. If they do, this can often result in wasteful cycles, high costs and compromised vendor relations.
When you have a product that you know works, you are better off trying to improve it to make it more appealing and better serve customer needs. Simply put, be creative with what you already have.
Identify new ways to offer and sell your product. Use the resources you have available to experiment, for instance by combining different product and service bundles and functionalities to create something potentially more valuable to the customer. Sometimes the provider has too many options that overwhelm the customer. Bundles make this easier.
By being creative and strategic, you become more flexible and expand your range of offerings that align with the demands of your target market.
Rather than new customer acquisitions, you can upsell with new offerings that impact your ROI.
With more optimal bundles, customer engagement will increase and increase potential for word-of-mouth advocacy for you as a vendor among their communities, indirectly accelerating growth.
Utilize data for new opportunities
Customer success depends on understanding what your customer is using, how they’re using it, why and why the usage is either rising or falling. These can all be identified using data.
Your data shapes your knowledge of customer behaviours and interests, the way you package and offer products, your business model choices, etc. Data allows vendors to have the information visibility to experiment with different bundle combinations and create something potentially more valuable to the customer.
With the data we get from customer usage, we can better understand what features are providing them with the most value and use this information to develop more personalised offerings.
To really show customers that you’re attuned into their needs, you can sell these features on a subscription model, allowing them to opt in to the tools they want, opt out of what they don’t want, and ultimately feel they’re getting a bespoke service for the best value.
And, as far as subscription models go, these usually benefit both buyers and sellers – it’s less of an upfront cost for buyers and a form of long-term revenue for sellers. They also help maintain your customer base and create opportunities for growth, such as appealing to a new target audience.
Are the offerings optimal, or are there alternatives you can try? That’s where the data comes in – it allows you to test, measure, learn, adapt and adjust as you go.
Deploy automation
Many organisations rely on manual processes to provide their goods and services. As a result, it can take a lot of time and effort to process orders and deliver to the customer, and sometimes push the customer to handle complex tasks or arduous steps such as consulting vendors for support. Customers shouldn’t have to interact much with the back-end processes.
In an uncertain economy, CX is the currency by which companies can stay afloat and potentially excel. Optimising your CX includes empowering the customer so they can be flexible in how to purchase, deploy, distribute and rebalance – a lot of which falls under the self-service umbrella. This is where automation comes in.
Automation can be leveraged to save on operating costs and avoid the noise created by manual disruptions and mitigation, such as working through issues and addressing client concerns.
By automating back-end processes, you can optimise the products and services you offer, including self-service for a more empowering and seamless customer experience.
Develop a flexible strategy
With the impending economic downturn, a lot of organisations will be looking to customer success to survive and/or grow. Some will focus on growth, while others will tighten their hold on existing customers.
Under such conditions, things like customer success and drawing more value from your business’ services will matter.
Taking a gentle and flexible approach will result in higher returns for vendors because they won’t be imposing restrictions and frustrating their customers.
By leaning into the tools of digital transformation – having reliable data, being creative and adaptable, and automating resources – organisations will be able to optimise their software-monetisation strategy, enhance their CX and enjoy positive net gains in the long run.
By Darim Rahmatallah and Adrian Pearce
Darim Rahmatallah is the software-monetisation expert at Thales, where he has worked for more than 20 years. He has worked in software licensing for more than a decade.
Adrian Pearce is the principal business value consultant in Solution Sales for the EMEA region at Thales. He has more than 30 years of experience in product management and sales relating to software solutions.
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