Costs are up — there’s no denying it. Consumer prices increased 9.1% over the past year, according to the US Bureau of Labor Statistics — the largest yearly increase in 40 years. While fuel, energy and utility industries have seen the biggest impact, other sectors, including food, apparel, recreation and transportation, have not been immune.
Inflation rates, however, are only one piece of the puzzle. They fail to capture the phenomenon of "skimpflation" — the combination of rising costs and companies skimping on the stuff they provide. The result is people spending more money but receiving less in return.
You’ve probably seen it for yourself. Maybe you’ve gone to the grocery store to pick up your favorite cereal. You notice that not only has the price gone up, but the box has gotten skinnier. That’s skimpflation in action.
No matter the reason for this tactic — the need to cut costs or corporate greed — customers aren’t satisfied with this new norm. Instead, their expectations and behaviors are making big shifts.
Customer Habits Changing Alongside Economy
According to Vasili Triant, chief operating officer at UJET, research from his company shows that customers are taking action to combat rising costs. They are:
- Canceling subscriptions
- Moving to lower-cost providers
- Negotiating contracts
Most consumers, said Triant, are planning to cut spending. And the first places they’re looking at? Brands that don’t provide excellent customer service.
“Price is no longer the great differentiator,” said Triant. “Consumers can find the best price across the vast landscape of ecommerce and price-matching. Customer service is what separates brands, wins the purchase-decision moment and is what customers remember.”
Related Article: A Decade of Dramatic Change in Digital Customer Experience
How Brands Can Maintain CX Despite Down Economy
Rising costs aren’t just affecting consumers. Brands are also being hit by inflation, with many of them dealing with slashed budgets, downsized staff and even requirements to cut back on resources.
However, when it comes to cutting costs, taking away from customer experience is not the way to go. “Downsizing during a recession doesn’t need to negatively impact customer service,” said Triant.
Let’s delve into how brands can keep CX and customer service a priority during these trying times:
Utilize AI Across the Customer Journey
Triant recommended brands tap into technology like artificial intelligence (AI) to downsize without sacrificing customer experience.
“Conversational artificial intelligence can manage a variety of simple tasks traditionally supported by a live agent for quicker service and shorter wait times,” said Triant. “As a result, agents are freed up for more complex needs — and are supported with AI-powered insights for faster customer resolution.”
AI that functions across the entire customer journey can also give brands insights into how customers engage with them, Triant explained. The technology can predict customer intent based on past interactions and provide employees with next-best responses to efficiently solve problems.
Modernize the Contact Center
Another way brands can excel in customer experience during a downturn? Look to modernize the call center.
“Advanced CX features, like enabling customers to use smartphone features (such as camera, video and screen sharing) to expedite service requests go a long way in separating your brand from the rest,” said Triant.
He recommended offering multiple ways for consumers to reach your brand — text, chat, phone, in-app, etc. — and making it easy for customers to switch between channels.
“By exiting the landline era and entering the next generation of CX, customers will consistently choose your brand in a climate of cutting back,” Triant said.
Level-Up Customer Service Talent
Now, when the economy is down and competitors are cutting back on CX, is the time to reinvest in your customer service, which includes enhancing your staff’s skills.
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“CX shouldn’t be something to disregard when times get tough — it should be viewed as a profit driver,” said Triant.
He recommended empowering agents to resolve problems by offering them data, technology, contextual insights and personalized recommendations.
“Agents should be viewed as a strategic asset and recognized for their ability to impact customer relationships and brand reputation,” he said. “But all the greatest tools to enable agents won’t help them create memorable experiences if CX frustrates the customer.”
Align IT Resources With Business Needs
Having a differentiator that captures and keeps customers is the desire of any retailer, said Jason Raymer, vice president of enterprise client experience at iQmetrix.
But it won’t be enough to roll out customer experience initiatives that ask team members to deliver “best-in-class experience,” he said. Instead, brands must align their IT resources with the business’s needs.
“This will mean refining digital ecommerce experiences that are driving retail traffic,” said Raymer. “One example of this would be creating such clarity and ease for supply chain visibility that consumers always know what is available in-store and when it can be delivered, and the whole experience does not prompt them to cross-shop the brand with Amazon or other online retailers.”
Enable Multiple Sales Channels
Raymer said brands that want to stand out amid rising prices must ensure they offer multiple sales channels with features like inventory availability, pricing and the ability to buy or reserve a product online and pick it up in the store.
Another feature customers want? The option to buy now and pay later, which enables shoppers to make monthly payments for a product. According to a survey from C+R Research, 60% of consumers polled have used a buy now, pay later service.
“Ensuring that these functions exist consistently and are available through all channels allows for a unified brand experience and increased loyalty from consumers,” said Raymer. “Brands that have not solved for these expectations are at a crossroads and have to make investments in strategic SaaS (Software as a Service) partners that bring them up to speed in quarters, not years.”
Related Article: How Omnichannel Marketing Feeds Into Stronger Customer Experiences
Skimpflation Doesn’t Have to Affect Customer Experience
Prices might be rising — for your customers, for your organization. And you may be forced to cut back in some areas. However, brands that refocus their sights on customer experience despite the down economy can retain their customers and capture new ones.
As Triant explained, “Changes a brand makes to its customer experience (CX) during times of crisis can impact its long-term bottom line.”
