With the current global crisis, high inflation, and a looming recession, most of your customers have had changes to their budgets and forecasts . They are actively cutting back their budgets and are more cautious about where they spend their money.
As you are aware, customers are keen on evaluating their options before making purchase decisions. Consequently, companies have become more nervous and they too are freezing budgets and cutting costs as their revenues decline. But, as a company, where should you cut costs during an economic downtown? And what does this mean to customer experience?
Having evaluated a number of minor and major economic crisis cycles in the last 15 years, (including the 2008 major recession) here are the three things we learned about customer experience during an economic downturn;
1. Companies Focus and Spend Less Towards Customer Experience
Unfortunately, during a major economic downturn like what we’re experiencing now, many companies tend to reduce spending in areas that do not offer immediate Return On Investments. These areas typically include marketing, customer support, quality assurance, and so on.
As a result, customer experience suffers at the expense of boosting the bottom line during difficult times.
2. Better Customer Experience Increases Customer Loyalty
As earlier mentioned, customers tend to be more cautious about where and how they spend their money during an economic downturn. Customers will generally spend money on services and products they feel loyal to, and which they can recommend to others. Learn how to create a customer loyalty program.
Getting a share of the smaller customer wallet/purse means your brand needs to stand out from the rest. Exceptional customer experience is the reason why your business will be the first one customers think of when they’re ready to increase spending.
3. Customer Experience Is Critical to Your Post-Crisis Growth
However bad it gets during an economic downturn, the economy will eventually bounce back. How soon your business bounces back depends on the strategies you’re putting together now and your ability to see beyond the curve.
Post-recession business growth accelerates when your products/services are recommended to others. Maintaining good customer experience during a financial crisis ensures exponential growth as compared to your competition, when customers can, again, increase spending more freely.
The Bottom Line
Focusing on customer experience is crucial to the success of your business. It’s perhaps more crucial now than ever if you’re looking for long term success and survival of your service or product.
Most business executives agree that customer experience is critical to driving loyalty and maximizing profits during a financial crisis and beyond.
During the 2008 recession, companies that prioritized customer experience were often able to retain –and even gain – value during the unfavorable economic conditions. This was untrue for companies that reduced spending and focus on customer experience in the same period. Focus on your customers, deliver your brand promises and create value based outcomes.