Major industries are undeniably feeling the impact of the coronavirus, and it’s changing the way technology teams can interact with potential clients. In this episode of Emissary Live we sat down with Eddie, former VP of Product Development and Operations at American Express, who shared insights from his 25 years of experience in the financial services industry on the impacts of the coronavirus and what teams are doing in response.
Here are the three key takeaways from the conversation:
- If you can delay things like licensing fees or other aspects of the contracts that you’re building currently given the current events, do it. Seek ways to simplify the process for your customers. Make it easy for them to move things along, because there will be inevitable delays. Be sensitive to those delays, but also don’t be afraid to continue doing business. Don’t assume that everyone will be focused on remediation, and that everything must come to a halt. Just be mindful of delays that are likely and be patient.
- Trends won’t halt and business won’t just disappear, but of course we can expect those delays. The longer the event goes on in a way that affects business, the more marginal initiatives and investments may be delayed, but current initiatives will likely continue, just likely at a slower pace.
- Clarity of your value proposition is key. It would be under any circumstances, but especially now. Be sure that you’re doing the work to understand your customers business needs with a high degree of clarity, and craft your messaging to demonstrate that you understand the problem that you’re able to solve, and that you’re the one to solve it.
Panel Discussion Highlights
What do you think global financial services organizations will be doing to increase consumer confidence, given the current events that we’re all aware of at this point?
It’s clearly an uncertain time. No one has a crystal ball right now to understand what this virus is going to do, how long is it going to be presenting a public health risk, how long is it going to be shutting down businesses. And no one has a crystal ball either on what the after effects are going to be. What kind of recession are we going to be seeing? Is it going to be a long retracted deep recession like 2008, or is going to be something that we recover from very quickly?
I believe many of the larger financially stable organizations, certainly one with a strong customer commitment like American Express, will treat this, at least at this stage, in a manner similar to our reaction to a natural disaster. What I mean by that is that the front line servicing and risk employees should be trained to be empathetic to hardship that consumers and businesses are facing at this time.
For these global firms, what methods will they be applying in order to brace for potential economic downturn? Whether that’s short term or long term, which none of us can know at this point, but what was learned in 2008 or with other similar events like this that may be applied again now, and what should the marketplace be ready for?
There are many lessons that were learned in 2008, and most well-run financial service companies have been developing their playbook ever since for that next recession. Which, quite frankly, has been a long time in the coming, right? A very unusually long time. The common risk strategies that you would expect from those financial institutions will be to tighten their credit box for new accounts, reducing line sizes, certainly reducing line sizes that have been unused for a while, but you’re carrying that exposure. This is on all unsecured cards and loans. You’ll see them also implementing programs to potentially extend terms for companies and individuals that find themselves in this with temporary hardship.
Operationally, I think universally across the board you’re going to be seeing a reduction in expenses, including restrictions on travel, hiring freezes, potentially even releasing contingent workers as a first step. And again, the deeper and longer this situation extends, the more and more of this kind of cost reduction that companies will have to make.
Given the current circumstances, what guidance would you offer to technology vendors who are currently in conversations with teams at global organizations? Is now the time to be treading softly, or to make their case regardless to continue to build those relationships and work toward their quota?
It’s natural for people within FinServ organizations to be distracted right now. Much of the time that leaders otherwise have available exploring the opportunities will now be spent managing through a crisis, implementing procedures, monitoring data, results, communicating with employees and customers, et cetera.
There will be less capacity from leaders in these companies to be exploring brand new opportunities, or they will be exploring growth opportunities a little bit in a defensive posture. But that said, something that everyone in an organization will be 100% consumed with: remediation effort. So my advice is, if you’ve entered discussions, try to push through these regardless. You should however be sensitive to the fact that there are many merchant activities taking place within the organization, and they’re reacting to real time events.
Do expect and understand if meetings are canceled and rescheduled. It will take longer to get decisions from the decision makers. Be understanding and let your client organization also know that you understand the situation that they’re in. I think that would be helpful. And also understand if budgets get squeezed, if you have the flexibility with the services that you’re providing, to be flexible on how those get billed. That makes a difference with the company’s ability to continue working with you to get a deal done and to begin implementation.
What guidance would you give to these teams who stake their success on building relationships, what are the obstacles they’re going to face in trying to maintain relationships but now having to do that completely remotely?
Every crisis is different, and this is very unusual. We have this term called social distancing that I think a week ago none of us ever had articulated in our lives. Now it’s part of our daily lexicon. Clearly sales is so much about relationships, going in there and getting on the white board, working things out. I found that that is how oftentimes you’re able to really accelerate getting deals done, these face-to-face meetings.
That’s not going to happen for a while, both because travel is being restricted as well as many companies are working virtual and not allowing visitors to come in. I think we just have to work with it. I think everyone is in the same boat, everyone universally, all businesses are going through a very rapid transition to working remotely, to working virtually, making use of video. I think that all suppliers will have no choice but to adapt to it and make the best of it.
If you’re looking for more insights on navigating business during uncertain moments and major transitions like many industries are facing now, you can connect with one of the thousands of advisors in our network from Fortune 1000 firms. Contact us here to see what an Emissary can do for your business.