A Recession Strategy for Web Apps

In hard economic times, web-based applications are now an important element in an organization’s survival and growth strategy. Recessions are all about cutting waste and focusing in on activities that will have immediate, positive outcomes.

Whether they are public-facing or used internally, web-based applications can touch every business function. Because of their inexpensive deployment and their ease of updating, they are ideal for short, targeted activities.

In a recession, these benefits become magnified. The trick, when developing web apps in a tight economy, is to keep your eye on the ball. When the team is focused on ensuring their designs produce solid business results, they get solid management support and help the organization keep things moving.

Match Up With Executive Priorities

For the last few years, we’ve been studying how the best teams succeed at staying focused on the business. When we talk with executives during this research, it’s often easy to see what they are focusing on. In both good times and difficult periods, there are only so many ways to help an organization grow.

In fact, there are only five executive priorities: increase revenue, reduce costs, increase new customers (market share), increase business from existing customers, and increase shareholder value. It’s important to understand how your design matches up with each priority, so you know where to put resources and what to emphasize.

Increasing Revenue

The web now plays a strategic role in selling. In e-commerce, the checkout process is the engine that drives the sale. Even in organizations where revenue comes from an offline sales process, such as hospital services or university admissions, web applications can help support the sales process.

A key component is to “grease the sleds” by ensuring that all pre-purchase questions are answered promptly. How much will it cost to ship? How will we get this installed? What is the total cost of the purchase? Calculators and configuration tools are integral to today’s revenue generating process.

One development team we studied had spent a week shadowing their organization’s sales force. Out of this, the team quickly identified some quick configuration tools and sales documention functionality. The sales force loved the first quick-and-dirty implementations, which, in turn, enabled a complete set of sales-support tools that reduced the workload of the salesperson, letting them focus better on the customer. The team told us they saw tremendous value from that initial week’s research.

Reducing Costs

Web apps are ideal for streamlining organizations. Automating processes and producing self-service opportunities shifts expensive human-powered tasks to the much less expensive server farm.

Working with the organization’s call centers, whether it’s customer support or the human resources group, to help reduce their call volume is a great way to see a huge cost savings. Call center managers can tell you about the top ten calls coming in and then you can look for ways to turn those into self-service applications. In one organization we visited, their customer support center saw a 25% reduction in calls within the first month after the introduction of simple self-service tools that dealt with the top 3 calls.

Increasing New Customers (Market Share)

Web apps have proven to be powerful tools in lead generation and new customer sales. A key area to focus on is removing obstacles from the sales process. Streamlined sales processes reduce the chances of abandonment and increase overall brand engagement.

In recent years, a new focus has been on helping customers themselves become part of the marketing efforts. For example, the charity Kiva.org (a very successful non-profit that operates entirely as a web-based micro-lending application) makes it very easy for existing loyal donors to tell their friends about how great the charity is. Donors can see statistics on how many friends have also participated and can seed their friend’s loan activity with a gift donation. This has dramatically increased participation in the programs.

Increase Business from Existing Customers

The most cost-effective marketing efforts are aimed at getting existing customers to spend more money. Since they already bought into the brand and organization, they understand where the value is. Web apps can help this priority most when they streamline those marketing efforts.

Recommendation engines (such as “customers who bought this product also bought”) have proven to be a popular driver of additional revenue. Loyalty programs, where customers earn points or additional benefits, for bigger and more frequent purchases can drive sales. Even just removing obstacles from repeat sales, such as storing shipping, billing, and payment information, can make it more appealing to make a quick purchase.

Increase Shareholder Value

The most difficult of the five executive priorities, this one can also be the most powerful. Designers can affect the shareholder value by helping create new opportunities for the organization to grow into and maintain a market leadership position.

Over the last few years, several examples have bubbled up to show how this can happen through web-based applications. Amazon, for example, opened up their storage and processing capabilities, creating an additional revenue stream. Netflix has made it easy to download movies, in addition to receiving DVDs in the mail, making it even harder to compete against them. And UPS has created a successful API set that makes it easy for e-commerce vendors to build their functionality directly into the retail sites, giving the vendors streamlined efficiency and building up a loyal customer base.

In each case, at the core of these value-enhancing projects has been been a web-based application that made it work.

Making It Work in a Recession

Any time the designers understand how their project directly relates to one (or more) of these executive priorities, it makes it easier to get the support necessary to do the job effectively. In a tight economy, the best teams are ruthless in their editing of the project functionality, to ensure they can dedicate their resources directly to the priority at hand and not dilute their precious time on activities that don’t match up.

A recession is rough on everyone, but by focusing on these top priorities of the organization, everyone wins.