Customer experience professionals have long lived by the sentiment, "Happy customers don't churn." However, with each passing year, CX leaders must adapt to changing trends to stand out and build experiences that make customers stay. In 2023, companies must face 3 top challenges: 1) economic uncertainty, 2) following new digital trends and 3) connecting employee experience to CX.
In a recent webinar, Dan Gingiss, chief experience officer at The Experience Maker, and Momentive Director of Product Marketing, Scott Monroe, discussed these three challenges, and made recommendations on how CX professionals can overcome them.
In this first segment of our 3-part series, learn how CX leaders can adapt to and succeed in the current macroeconomic landscape. You can also watch the webinar with Dan Gingiss here.
Recommendation #1: Create Real Value Amid Recession/Inflation/Supply Chain Concerns
Macroeconomic conditions often leave CX professionals feeling like too much is out of their control. “Inflation is here, there are threats of recession, and the supply chain isn’t great,” Gingiss explained. “The key is not to get lost in all of it.”
Many companies might feel tempted to compete on lower prices — particularly as recession and inflation fears affect customer spending — but Gingiss said trying to compete on price is generally a losing game.
“It’s a race to the bottom,” he explained, adding that this is true regardless of your industry. Competing on products or services is also ineffective, as most companies have no shortage of competitors offering comparable solutions. This leaves competing on experience.
Gartner found that two out of three organizations compete primarily on customer experience. However, many companies fail to truly make it a competitive advantage. To do so, companies must invest in customer success, or give their customers the maximum value of their product or service by proactively delivering solutions and answers.
“People expect a great experience when buying from a company, and they’re willing to pay more for it,” Gingiss said.
Recommendation #2: Prioritize CX When Reducing Budgets
Customer experience professionals aren't immune to budget cuts. As economic concerns rise and companies look to reduce costs, they’re often expected to do more with less.
“I don't think CX has to be your biggest line item, but it’s not the first, second or third place to start cutting stuff,” Gingiss said. Despite many companies allocating a significant portion of their budgets to sales and marketing, CX teams often feel they’re not equipped well enough to serve existing customers.
However, keeping customers is less expensive than obtaining new ones, and there’s a proven return on investment (ROI) on CX. Brands with a superior customer experience generate 5.7 times more revenue. High-quality experiences also lower the cost of serving customers by 33%.
Gingiss suggested keeping CX a priority during downturns, even if it means shifting budgets around to do so. “When we lose customers, it just makes sales and marketing’s job harder, because they have to make up for these losses,” he said.
Recommendation #3: Address Business Continuity
The COVID-19 pandemic and other recent periods of unexpected change have left many companies placing new importance on business continuity. They need to find ways to either continue operating as normal or adapt to new realities, and that includes protecting their brand. How do you keep customers amid all this uncertainty?
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“We still have to use the same CX things that we’ve learned all these years, even in times like this,” Gingiss said. He cautioned that companies who take the human out of the transaction miss out on the opportunity to engage with their customers.
Today’s consumers view their interactions with companies as a relationship, not a transaction. According to Gingiss, Gen Z consumers expect brands to foster two-way communication. “If you just hand them a receipt and let them walk out, you’re not truly connecting with the consumer,” he explained.
Building a customer-first corporate culture, offering personalized experiences and acting on feedback make customers feel more appreciated while improving brand loyalty and reducing churn.
Not only will you increase customer satisfaction, but you’ll also drive revenue. In fact, companies that provide an emotional connection with customers outperform the sales growth of their competitors by 85%.
Conclusion
It can be easy to get overwhelmed by the threats of a recession, layoffs or other headwinds. Still, companies need to understand the economic value of holding onto existing customers, not just getting new ones.
Today’s consumers have high expectations and aren’t afraid to switch brands when they’re unhappy. Furthermore, every interaction is critical because one bad experience is enough to make you lose a customer. It’s up to companies to refocus on what matters most: their buyers.
But even amid this backdrop, the same CX strategies for success still hold true. Prioritizing investment, creating added value and building solid customer relationships can keep your company performing strongly when it most needs to.
Next week we’ll dig deeper into the CX 2023 trend #2, focusing on new digital trends like ChatGPT.
Learn how Momentive can help you deliver memorable customer experiences at momentive.ai.