Curt Frierson, EVP Technology and Education
Let’s face it, the prevailing outlook right now for many businesses is not exactly positive. Countless organizations are being required to rethink, not just their strategies, but their entire business models. The combined forces of short-sided strategy and swift economic change have already spelled disaster for some unfortunate businesses. For those of us still standing, additional challenges and tough decisions continue to confront us on a daily basis. After fighting through these challenges for some time, it can be easy to succumb to the “just let me get through this” mentality. Strong businesses though must stay focused on the future, carefully looking for ways to use these challenges to build a stronger foundation on which to emerge from this downturn.
Safe Systems is not immune from the conditions that affect so many of our customers. In fact, it has been necessary for our management team to become intimately educated on the difficulties our customers face in order to plan a more realistic long-term growth strategy. Our traditional revenue mix has shifted dramatically. Denovo institutions are few and far between and new branch additions have become scarce. We have seen significant changes in the needs of our customers; as a result, the opportunities to best ensure a strong future for Safe Systems have changed as well. It has not been an easy transition; we have suffered our fair share of bumps and bruises along the way. Fortunately though, we’ve been able to weather the storm and position ourselves for solid future growth. This would not have been the case if we had maintained the course of our traditional business model. Looking back on our experiences, a few key concepts become evident that have allowed us to develop a winning long-term strategy.
1. Listen to Your Customers: By far the most important concept, “listening to your customers,” is critical at all times and in all industries. It is widely known that it is easier to keep an existing customer happy than to win a new one. In an economic downturn, paying attention to your customers’ needs is even more essential because new customers are harder to come by. The number one priority should be to understand your existing customers’ circumstances so you can adjust your products and services to best fit their changing needs. Besides retaining more business, treating your customer as a stakeholder can have an important additional benefit. The more involved they feel, the more likely you are to get ideas on how to make your products and services better. This can, in turn, increase satisfaction in your other customers and he help win additional clients.
Listening to our customers has always been vital to our success. Safe Systems’ Account Management program was started years ago in order to create an internal advocate for each of our customers. Our Account Managers are charged with understanding each of our customers’ needs and ensuring their continued satisfaction. This strategy has allowed us to greatly increase the number of customers we serve while still maintaining close relationships and outstanding customer retention. Safe Systems recently witnessed the power of this “listening to our customers” through our regional User Group meetings. These meetings provided us with invaluable insight into our customers’ environments. We were able to gauge how well the changes we had made to our services were being received and prioritize additional improvements to our services that were important to our customers.
2. Don’t Go at it Alone: Navigating your way through a troubled economy can be quite scary. The old rules seem to have been thrown out the window and the future is full of uncertainty. This is not a time to rely solely on your own experience to guide your business. The good news is there are many other institutions out there that are having similar issues as you and looking for other business leaders to collaborate with. User groups, industry conferences, and peer groups can be invaluable resources from which to draw inspiration and support.
In the past few years, Safe Systems have become active in several industry groups, attended numerous technology and banking conferences, and participated in user groups held by our strategic partners. Aside from the information presented at these events, we found that the opportunities to collaborate with our peers provided us with great ideas to integrate into our own business.
3. Focus on Your Core Competencies : Expanding into new products or markets to offset falling revenue is often the first impulse for many businesses. While this may seem like a logical strategy to provide continued growth, institutions should wade carefully into these waters – especially in a time of uncertainty. Chances are good that the already established companies in that space won’t give up market share without a fight. This does not mean that this is a bad strategy, simply that you must carefully weigh your options and design your strategy to align with your core competencies. This will reduce the time and costs of developing new services and reduce difficulties of entering a new market.
Although Safe Systems has recently developed many new service offerings, such as NetComply, Managed Antivirus, and SafeSysMail, we have taken great care to ensure that each was based on technologies and processes in which we had extensive expertise. This strategy has significantly eased the introduction of these services into production and reduced the overall costs of the new services, resulting in a positive impact to the bottom line.
4. Increase Employee Communication: During great financial times, sharing the good news with your employees is fun. When the information isn’t so good, some businesses tend to be tight-lipped. This is the wrong time to stop communicating with your employees. Your staff is eventually going to be impacted by the financial condition of the business. Keeping them informed of the situation will allow your most valuable resources to better understand the decisions that are being made. Maintaining a level of transparency can also help employees feel a sense of ownership, which may make them more willing to go the extra mile to help pull the company through a tough time.
Safe Systems now holds monthly company meetings to review the previous month’s financials. This step allows our management team to proactively inform our employees of any irregular trends that are developing. An additional benefit is that it encourages employee buy-in when they can see the positive impact of previous decisions, which helps improve the probability of success for future decisions.
5. Minimize Costs Without Impacting Service: This strategy is easier said than done; however, it is absolutely critical for getting through a weak economy. Most businesses have a few obvious areas where costs can be easily minimized or eliminated. Once the low hanging fruit is addressed, the process gets much more difficult. The trick to executing this strategy successfully is to find areas where alternatives exist that can provide the same or better level of service in a more cost effective manner. This may require a measure of creativity and possibly some difficult decisions, but the reduced costs that are realized can help your emerge from the downturn in a better position than you had entered it.
As our revenue mix has shifted, Safe Systems has responded by reallocating resources to areas of growth and leveraging partnerships to help deliver some ancillary services. By drawing on our relationships with trusted partners, we have been able to offset the need to hire additional employees while still being able to deliver outstanding service to our customers. We are also better able to handle peaks in business volume without the risk of carrying unnecessary labor expenses during slower periods.
Looking back on our recent experiences, it is clear that the strategies we employed turned out to be critical for our continued success. Safe Systems has been able to retain a strong balance sheet and position ourselves for a positive future. We are excited by the opportunity to continue to serve our customers and provide quality solutions to address your needs. Although none of us are completely out of the woods in regards to the economy, we are starting to see some signs of recovery. Now is the time to make the remaining necessary changes to your strategy in order to enable long-term success in the future.