ZS Associates says strategic cost cutting is the hottest trend in sales and marketing
In this economy one would think ZS Associates, a firm specializing in sales and marketing, would be in dire straits. Not so, says Jaideep Bajaj, managing director of the 1,000-person firm. Bajaj remains optimistic that ZS, now at more than $250 million in revenues, will see double-digit growth this year. ZS Associates will even be adding two more offices in New Delhi and Madrid, bringing its total locations to 19. All that, and a new book—Building a Winning Sales Force—by firm co-founders Andris Zoltners and Prabhakant Sinha, means 2009 will probably be a better year for ZS than it is for most of its clients.
Consulting: So, what's the state of your clients?
Bajaj: Well, I think most of them have sort of given up on 2009. It's pretty much a write-off year for them. As a result, they're trying to get their sales and marketing forces as lean and mean as possible for 2010.
Consulting: Do you see any pockets of opportunity out there right now?
Bajaj: Healthcare is slightly more recession friendly, so we'll probably do a bit more work there. We're also doing some work around new selling models; how can a client re-organize its sales force so it can have a bigger impact with a smaller head count.
Consulting: Sounds like most of the work right now is around cutting cost.
Bajaj: For a lot of our clients, sales force represents half of what they do, so when a company is looking at cost cutting, they are definitely going to look at sales and marketing. But cost cutting has many complications. Which people should you let go? Where should you cut geographically? How does the work get re-allocated? Many of these questions require analytical solutions. I'm working with a client right now where there is significant pressure from the CEO to cut costs by a certain amount, but we're advising them how to look at the company's various divisions and cut strategically. It's all about return on investment in each of those divisions.
Consulting: Is ROI a big focus area right now?
Bajaj: Yes, a great deal. We spend a lot of time assessing the marketing return on investment, and that type of work is extremely relevant in today's economy. People don't want to just cut costs. They want to measure return on everything they do.
Consulting: How is it that you're expecting significant growth in the current market?
Bajaj: Even as clients pull back, they have many needs to be addressed, and we are such a small percentage—way under 1 percent—of the spend of any client's sales and marketing budget. So, even at companies slashing costs by 15 percent, we're probably not going to be impacted. For us, it's about how can we help them be more effective. If the client feels that we can add value, they'll cut other expenditures first. We're here to help navigate this new and rapidly changing environment. If the client is confident we can do it, then we're going to live. If they aren't, then we deserve to die.
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