An October 2022 report from Bloomberg indicated that a US recession is essentially 100% certain in the next 12 months, according to new Bloomberg Economics model projections. Similarly, also in October, a report from The Conference Board revealed that the probability of a US recession within the next year has increased to 96%. A recession would impact consumer spending, advertising and marketing budgets, and the way brands strategize customer experience. Let's take a look at five ways that brands can recession-proof their customer experience strategy.
Provide Customers With Value
Consumers today have already watched as inflation affected their everyday purchases. For example, the price of eggs is up almost 40% from what it cost last August, and the price of margarine increased 38% over the same period. This has caused customers to look for ways to cut their spending, better understand their bills and determine where their hard-earned money is going. A 2022 Forrester report on recession indicated that 54% of US adults plan to pull back on their spending for the remainder of 2022.
As a result of this inflation, combined with concerns about a potential recession in the next year, consumers are feeling the pinch. Treasure Data’s recent survey revealed that 78% of consumers believe that marketing campaigns should be adapted to be more sensitive to customers’ changing priorities and needs due to recession concerns. Additionally, 11% of consumers said that over the past six months, marketing communications have been less sensitive and appropriate to their personal financial situation.
Andrea Calcagno, CEO and co-founder at Cloud4Wi, a location-based marketing and guest Wi-Fi solutions provider, told CMSWire that in a recession, brands have to protect their margins more than ever as sales decline. He believes there are several ways that brands can continue to add new customers while retaining those that they have:
- Create seamless brand experiences and more sophisticated and personalized marketing strategies with a 360-degree view of their customers.
- Provide the safe and secure shopping environment that shoppers want.
- Leverage the massive shift in preferences for online shopping and how brands are implementing solutions and strategies that help to bridge the gap between physical and digital customer experiences and insights into their behavior in and out of stores.
- Leverage the preference for mobile technologies.
- Customize customer experiences such as promotions that will help customers save money and get the best deals on the items they are most interested in buying.
Brands must also keep in mind that just because consumers are pinching pennies doesn’t mean that they aren’t spending. Robert Rothschild, CMO at Botify, an enterprise SEO platform provider, told CMSWire that one way to successfully market during the recession is to remain authentic and empathetic in the brand’s messaging and how the product or service actually benefits the consumer. "For example, don’t push it as ‘affordable’ and ‘low priced’ for the very first time simply because consumers are cutting back. This only works for companies whose value proposition has affordability built in, like wholesale clubs.” Rothschild suggested that for anyone else, consumers will see right through this inconsistent, spurious marketing tactic."
Related Article: Handling CX in an Economic Downturn
Make Customer Experience a Priority
Brands should not make the mistake of cutting back on their customer experience efforts during an economic downturn. Raghavendra Rao, director and services excellence lead at Sprinklr, a unified customer experience management platform provider, told CMSWire that brands can recession-proof their customer experience strategy by closely looking at their customer's full end-to-end journey to map out inefficiencies. Because a customer is able to interact with a brand on multiple social media channels, email, phone, etc., they should ensure that there is consistency and efficiency of service across each of these experiences.
Emarsys' 2022 Customer Loyalty Index revealed that it’s not enough to be customer-centric anymore — brands must be customer obsessed. The report indicated that for brands to make themselves as recession-proof as possible, they must know customers on a granular level and recognize which factors impact loyalty among different customer groups. Additionally, it underscored the fact that understanding precisely what triggers buying behavior in an increasingly fragmented marketplace will enable brands to attract and maintain loyal customers as they head into the holiday shopping season. Other findings from the report indicated that:
- 74% of respondents said that they are more loyal to brands that offer them discounts, incentives and rewards, provide great customer service, and market to them in a personalized way that accounts for their unique needs.
- 43% of respondents have switched from a brand they were loyal to due to a bad experience, a finding which reinforces the importance of delivering exceptional CX.
- 57% of respondents ranked “making the shopping experience difficult,” “halting free returns,” “treating existing customers poorly,” and “not offering discounts for customer loyalty” as reasons a brand would lose their loyalty.
- 60% of respondents said that inflation has made them leave brands to which they’ve previously been loyal in an effort to save money.
Optimize Customer Service
The pandemic caused consumers to increase their digital interactions with brands exponentially, and customers now expect customer service to be available 24 hours a day, seven days a week, across all of a brand’s channels. They also expect to connect with a brand using their preferred choice of medium. Additionally, a study by SuperOffice indicated that 88% of customers want a response within an hour — and 30% expect a response within 15 minutes.
Brian Gilman, CMO of IntelePeer, a CPaaS platform provider, told CMSWire the cost of doing nothing could be devastating and provided some examples of brands that succumbed to that fate. “Several iconic brands faltered because they didn’t have the wherewithal to meet the needs of the modern consumer, think J.Crew, Neiman Marcus, Sears, JCPenny,” said Gilman. “In addition, customer expectations will only increase as digital-first businesses continue to shake up markets.” Gilman believes that by tapping into customer service automation technologies, brands are able to modernize their infrastructure, remain relevant and recession-proof their CX strategies.
Related Article: Cheap Beer and Recessions: How to Survive and Thrive With Exceptional Customer Experience
Make Sure Your Brand Provides Convenience and Speed
SOTI’s 2019 Connected Retailer survey indicated that US consumers prefer speed and convenience when shopping, and 73% of those surveyed favored self-service technologies that improve the shopping experience and reduce interactions with staff.
Adrian McDermott, chief technology officer at Zendesk, told CMSWire that customer service is a key differentiator for brands, largely because today’s customers have high expectations, little patience and a lot of options to choose from. “As a result, they expect quick, easy and effective service, and they’re willing to look elsewhere if they don’t get it.”
Customers also expect a seamless transition between channels, so customer data must follow the customer’s journey. “Businesses need to be where their customers are — that means meeting them on any channel, which is increasingly preferred to be messaging,” said McDermott. “This requires an approach that prioritizes conversations and centers the entire customer’s journey around them.”
Allow Customers to Control Their Narrative
Often, negative experiences in the customer’s journey happen because they leave the customer feeling powerless with no control over their own experience. Being placed on hold on the phone for extended lengths of time, having to retype or repeat information or being transferred to multiple customer service agents causes frustration and irritation for customers. The same can be said about online shopping carts that don’t work properly and surprise shipping fees.
When brands remove the ability of the customer to be in control of their own narrative, it can lead to a bad customer experience. Although a customer may prefer not to use a chatbot or knowledge base for customer service, they do provide the customer with options and put them back in control of their narrative. To restore the feeling of control among customers, brands should provide customers with multiple ways to interact with customer service and communicate the estimated response time clearly.
Related Article: What Does Customer Success Look Like in an Economic Downturn?
Final Thoughts on Recession-Proofing Your CX
Consumers and brands will both feel the effects of a recession, and it will impact consumer shopping behavior. In order to recession-proof their CX strategy, businesses must provide value, convenience and speed to their customers, keep customer experience as a priority, optimize their customer service efforts, and enable customers to control their own narrative.