November 13, 2012
What in the name of Armageddon does the so-called “fiscal cliff” (over which the U.S. government is rumored to plunge in 2013) have to do with Social CRM/Big Data? As it turns out, quite a bit. First, a little background is in order about this much ballyhooed fiscal cliff and why some believe we are about to tumble headlong into oblivion. Then, we’ll look at what this means to businesses.
Why Reducing the Deficit is Leading to the Fiscal Cliff
The phrase “fiscal cliff” refers to the simultaneous spending cuts and tax increases that are slated to take place at the end of 2012. In addition, provisions that limit the reach of the Alternative Minimum Tax (income taxes) and cut payroll taxes are also scheduled to expire at the end of this year.
Just to make matters worse and encourage the political pundits into apoplexy, automatic spending cuts, as per the language laid out in the Budget Control Act of 2011, are also currently planned for the 2013 fiscal year. While this should rightfully drive the governmental budgetary wonks crazy, many otherwise calm, cool and collected business people are worried that this combination of actions will plunge the most powerful government on planet earth over this mythical cliff, thereby causing another recession.
Since recently the U.S. economy has been dependent on fiscal stimulus – see automotive industry, banking and investment industry bailouts – many economists, while happy that the tax increases and spending cuts would reduce the size of the national deficit, feel as though the sudden changes would plunge the country into another recession. It is for this reason that many elected officials want to avoid the “fiscal cliff” that is currently looming in the distance.
Staring Into the Abyss
While it is perfectly reasonable to be worried about the prospects for the fragile U.S. economy if the government falls off this fiscal cliff, the odds are pretty good that cooler heads will prevail – among both political parties – at the last possible second. One is reminded of the lyrics of the song by musical group Dawes: “When My Time Comes.”
You can judge all the world on sparkle that you think it lacks.
Yes, you can stare into the abyss, but its staring right back.
The fact is, many industries and the companies that comprise them have already fallen over the fiscal cliff or are standing on a banana peel and teetering very close to the edge. Some of these industries and companies include:
- Airlines (Have you taken any plane trips, just for fun, lately?)
- Companies that make and sell supersized fast food products (Sales down for the first time at McDonalds and the mayor of New York is demonizing supersized portions)
- Manufacturers of large, low-gas mileage vehicles (Anybody thinking of buying a Hummer?)
- Traditional newspaper publishers (With critically low levels of cash, some such as the N.O. Times Picayune are publishing only 3 times a week)
- Traditional book publishers (Big publishers are merging with other big ones to survive)
- Big box retailers (BestBuy, JC Penny both report sales declines)
- High fructose corn syrup producers (nutrition experts blame this substance for everything but typhoid fever)
- Big box video rental retailers (Blockbuster is in the tank)
- Single-purpose gadgets (Blackberry is hanging by a thread)
And, as they say, the list goes on and on.
The companies in these industries have been buffeted by advances in technology, hammered by a struggling economy and, in the case of processed food companies, beaten down by weather patterns such as the long-term drought. However, each of the categories, have been guilty of another cardinal sin and this transgression has forced them to line up next to the U.S. government on the edge of the fiscal cliff. They have failed to systematically listen to their customers and make strategic changes to products and engagement with these people – their customers. They’ve failed to properly use the powerful tools – made possible by the amazing advancements in social, mobile and digital media – Social CRM/Big Data.
How Social CRM/Big Data Can Help Companies Avoid Their Own Fiscal Cliff
Advances in technology or changes in customer preferences can be a company’s best friend or worst enemy. When Apple, or Amazon Kindle introduce a new tablet which is capable of downloading and presenting hundreds of newspapers, books and magazines, those large, expensive printing presses and the people who run them at the New York Times, HarperCollins and People magazine go from asset to liability overnight.
When enough moms discover Facebook, Pinterest and Twitter and begin posting negative content about high fructose corn syrup in soft drinks or the effects of supersized fast food on the obesity of their children, the industries that spawn these products are painted with a very broad and negative brush. However, these actions can be predicted and ameliorated with enough data, tools to understand this Big Data and tactics to deliver messages that are counter-arguments.
While Social CRM/Big Data can’t help all of these industries and companies from tumbling over the fiscal cliff, it can help every company, and perhaps even the federal government, understand the concerns of their customers, engage them with compelling dialog and keep them away from the big fall. Here are just some of the ways that Social CRM/Big Data can help companies avoid the abyss.
- Social CRM/Big Data programs enable companies to use social, mobile and digital media to efficiently “listen” to the needs, concerns and wants of current and prospective customers and build a large, useable repository of this critical data.
- Digital, mobile and social media can be deployed in a manner that is consistent with the customer preferences. Wasting time and promotional funds on expensive and broad-based mass media is eliminated or at least reduced when Social CRM/Big Data tactics are used.
- With enough customer insights, gleaned from Social CRM/Big Data campaigns, the company’s products can be modified or scrapped altogether to meet changing customer demands. Following this line of thinking, the daily newspapers and monthly magazines will then realize that they are in the content aggregation and delivery business but NOT necessarily in the business of delivering this content via ink-on-paper.
- Ailing companies can also use Social CRM/Big Data to amass enough pertinent data to be able to predict the actions of potential customers and use the knowledge to avoid expensive mistakes on new products and services that have no hope of success.
Can Business and Government Avoid the Fiscal Cliff?
Industries that are on the brink of the fiscal cliff and the companies that comprise these groups don’t have to stare into the abyss. They can adapt to a quickly changing marketplace. By truly listening to their prospects and customers, making tweaks and even wholesale changes to their products and marketing and then communicating the benefits of these goods and services via the social, digital, mobile or traditional media that they – the customers – prefer, companies can move away from the cliff. This is a textbook example of Social CRM/Big Data tactics.
Is it possible for the highly politicized branches of the U.S. federal government to use these Social CRM/Big Data strategies? Perhaps. However, it will require all concerned to be logical (which is typically a challenge in political environments), collaborative and to seek the greater good rather than short-term political gains.
- Art Young, Client Development