Q3 (calendar) wraps with a pending government shutdown, the end of Breaking Bad, talk of a 16-0 team in football (way too early, not played anyone yet, most games at home, no injuries), a Manchester United slump, and improving prospects of sanity in US-Iranian relationships. Quite a quarter across all spheres and we’ve posted our comments on the impact of the quarter on service organizations in our previous blog (Looking back: Process Inefficiencies and Market Conditions Hinder Growth in Q3).
We now step into an extremely important final quarter of the calendar year. The time when budgets are set, renewals are made or lost, plans are solidified, bonuses are determined and a whole lot more. For industries like retail, this quarter is make or break given the pending holiday season, while other industries see a slowdown with the coming winter. Service requests and incidences peak or dive given the industry one resides in, but Q4 is seldom the time to take a break.
As we pointed out in our previous blog, 72% of service businesses are currently run as profit centers. In the fourth quarter, we see these organizations continue to drive their focus on profitability. The top areas of focus projected for the final quarter of the calendar year are (percentages reflect percentage of respondents):
- Cost containment – 43%
- Revenue growth – 40%
- Collaboration between service and other business groups – 38%
- Customer experience management – 37%
- Global growth or expansion of service business – 37%
No significant surprises in the areas of focus, but once again we see an increased attention being paid to the collaboration element, between service and other business functions. This is primarily tied to the service-sales link, an area where organizations are really struggling in their efforts to improve account management and drive revenues (it will also be a core topic of our research coverage in Q4 2013, Q1 2014).
Customer experience management wasn’t reflected as a key area of focus in Q3 and neither was global expansion. Given the fight for customer commitment and customer loyalty especially at the time of renewals, the increased focus on customer experience management makes sense. Even if it isn’t tied to renewals, we see more and more organizations looking to formalize CEM initiatives within their businesses. In our recent CEM Strategy survey, of the 35% of organizations that did not currently have formalized CEM initiatives, more than one half indicated the start up of CEM initiatives in the coming 12-24 months. Once in place, the extension of these initiatives across multiple geographies is the next stage in order to ensure consistency of brand and excellence in service delivery to customers across the globe.
In Part 2 of this blog, we will chat about some of the key investment areas in Q4.