One year on: The lockdown's lasting impact on customer experience management
This week marks one year since Britain went into lockdown. We examine what one year in (and out and in) lockdown has meant for customer experience management.
This week marks one year since Britain went into lockdown. Perhaps even the most conservative of people would have assumed that some semblance of normality would have returned 12 months on. Yet as this is being written, Britain remains in lockdown, while many nations across Europe are set to return to stricter measures as COVID-19 infections escalate once more.
The cost in human life has been devastating. The impact on human lives and livelihoods has been extraordinary. And the economic ramifications will be felt for years to come.
In this article, we touch on some of these areas, as we examine what one year in (and out and in) lockdown has meant for customer experience management.
Consumers have changed - perhaps permanently
At the beginning of the first lockdown, customer support queries soared, as anxious consumers attempted to understand what the implications would be. In the absence of face-to-face discussions, this meant a rush to the phones, putting contact centres already struggling with sick and absent staff under further strain. Travellers wanting to change their itineraries with airlines, for instance, reported waits of over 10 hours, while longer than average hold times at banks and credit card companies were also reported by customers, with some even having their calls disconnected.
With phonelines jammed or unresponsive, huge numbers of customers turned to alternative, digital channels. According to Contact Babel research, 51% of contact centres reported an increase in email use, with 47% reporting increases in webchats and 37% report an increase in social media use. Self-service channels such as chatbots also experienced a spike in use.
Peter Dorrington, founder of XMplify Consulting, notes: “Whether by choice, or compulsion, many customers found themselves having to self-serve as direct access to agents became more difficult. For many, this was a convenient change that suited their needs, but certainly not for all and especially when it became increasingly difficult to reach a live human.”
A shift that was already in motion, the pandemic served to accelerate the migration to digital service dramatically. And there are indications that things will not snap back to pre-pandemic levels.
Research by SAS, for instance reports that 15% of customers can be considered digital adopters during 2020, and 70% plan to keep using the new channels going into 2021 and beyond. Elsewhere, research from Mitel polled more than 4,000 consumers in the United States, United Kingdom, France and Germany to find that - unsurprisingly - over 40% of those surveyed said their use of online customer services has increased this year. But of that number, more than 70% said they will rely on digital options more going forward.
There has been a surge in digital commerce
In MyCustomer’s latest report - The Future of Customer Experience in Retail - we detail how the lockdown and subsequent shift to digital interactions has had a dramatic impact on business; and of all the industries impacted by COVID-19, the lockdown has arguably had the most polarising impact on the retail sector.
UK retail sales suffered the biggest decline in nearly a quarter of a century in 2020. Despite a surge in online commerce, the impact of the series of lockdowns saw the quantity bought in 2020 drop by 1.9%, according to The Office for National Statistics (ONS), the largest year-on-year fall since records began in 1997.
Among the casualties of this devastating decline have been some of the biggest brands in the country, including Topshop-owner Arcadia, Edinburgh Woollen Mill Group and Debenhams.
Yet even amongst this most challenging of times, there are success stories. Amazon, of course, has been a major beneficiary of the lockdown. But others have also posted record-breaking results.
Online-only fast-fashion brand Boohoo, for instance, saw its sales soar by 40% year-on-year to £660.8 million in the four months to December 31. Online retailer The Hut Group witnessed sales rise more than 50% in the final months of 2020, subsequently leading it to increase forecasts for 2021.
Etailer The Very Group reported an 18% rise in sales during the winter period, while DIY conglomerate Kingfisher and table-top gaming brand Games Workshop also posted punchy performances.
Overall, online commerce has been the brightest spot for the retail industry in the past year. With a large proportion of the global population forced indoors due to the coronavirus pandemic, adults’ internet use surged to a record average of 4 hours a day, with purchasing habits also shifting exponentially online.
Total online retailing values increased by 46.1% in 2020 compared with 2019 – the highest annual growth reported since 2008 - according to the ONS, while digital commerce as a proportion of retail sales reached 33.4% during last summer, the highest percentage of overall mix there has ever been. Estimates by GroupM suggest that global ecommerce sales could have reached as much as £3.9 trillion in 2020.
Forecasters and businesses alike are unconvinced that the mix will ever return to its pre-pandemic levels. McKinsey research, for instance, found that more than 60% of organisations believe that the shifts in consumer behaviour and demands are permanent.
Neil Stewart, professor of behavioural science at Warwick Business School, adds: "There is early evidence of a 'new normal', in which shoppers spend 25% more of their money online than before the pandemic . Our analysis suggests the gradual shift towards online spending has been rapidly accelerated in just a few months by the pandemic.
“If that continues, it could obviously have serious implications for High Street businesses as they try to recover from the damage caused by the pandemic.”
Customer insight functions are more important than ever
With customer preferences and behaviours changing rapidly, the only way to keep pace was the delivery of customer insights at unforeseen levels.
“Customer behaviour has changed and the experiences organisations offer customers need to evolve, or they will get left behind,” says Marius Bartsch, head of customer engagement at Digitas UK.
“We have seen the adoption of some channels skyrocketing (e.g. live chat, selling and servicing by video-call, social media), and brands are interested in how customers are using those channels. The customer insight function is key to understanding those trends, and we are seeing their voice being listened to more and more by brands trying to find their way (and determine which channels to invest in) in the face of change.”
“Companies have ripped up annual (or even quarterly!) plans and are planning from month to month, making the speed at which insights are delivered really critical,” says Dr Christine Bailey, author of Customer Insight Strategies, CMO, speaker, & founder of Sophia Marketing. “There is a lot less time to prepare and the insights need to surface really quickly because the environment is changing so rapidly. Data collected last month may already no longer be valid!”
Companies have ripped up annual (or even quarterly!) plans and are planning from month to month, making the speed at which insights are delivered really critical.
David Lloyd, Wunderman Thompson's head of data & insights, notes that demands for insights have increased from both ‘winners’ and ‘losers’.
“Businesses that suffered most (e.g. fashion, out-of-home entertainment) sought consumer understanding to inform rapid re-thinking of their business models to avert crisis and steal a march on similarly challenged competitors,” he explains. “Some businesses benefited (e.g. tech, digital retailers) and these sought to invest further in their customer insight capabilities, also leveraging the surge in their 1st party data as consumers flocked online. The speed of demand mirrored both the urgency of businesses to pivot, but also a thirst for high frequency low latency insights to stay on the pulse of the ‘corona-coaster’ effect.”
Unsurprisingly, Capgemini notes that there has been a surge in recruitment for consumer insight professionals since Q3 2020, while Censuswide research on behalf of Stravito indicates that 74% of businesses are looking to boost their market and consumer research budgets this year.
Digital transformation projects have accelerated
“COVID wrote the business case — our future is digital,” Forrester VP & Principal Analyst Ted Schadler quotes one CIO as saying.
“The pandemic changed everything,” continues Schadler. “Companies that had laid the foundations of cloud and agility and strategic partnerships were ready to respond with digital solutions. Those that hadn’t scrambled and flailed. [In 2019] 85% of firms viewed digital as 'nice to have'. In 2020, every company learned that digital is critical to customer and business success.”
Michael Hinshaw, president of McorpCX, adds: “Digital transformation was on the rise well before the COVID-19 crisis. But the crisis has supercharged this trend in a way that is changing customer and employee experience faster than many companies can adapt. Customer adoption of 'digital-first but not digital-only' interactions has gone from straight-line growth to a hockey stick, employees are working from home and need to collaborate and access information to stay productive – and companies are racing to catch up. The value of digital channels, products, services, experiences, and operations is immediately obvious.”
And the speed of transformation has been extraordinary. Twilio’s Covid-19 Digital Engagement Report, for instance, surveyed 2,000+ customer experience, marketing, operations and IT professionals, and found that brands had had to accelerate their customer communications transformation strategies by an average of 6.1 years. The research revealed that 27% of respondents said COVID-19 had fast tracked their transformation plans by between 5-9 years, while incredibly 19% said they had pushed things forward by between 10-14 years.
As well as breaking down barriers, COVID-19 has also propelled brands’ omnichannel communications strategies. 54% of brands have increased their focus on omnichannel communications, with 53% adding new communication channels - including chatbots and instant messaging services - since the start of global lockdowns in March.
There is a growing need to demonstrate the value of CX
Even before the outbreak of COVID-19, experts were forecasting that 2020 would be a tough year for customer experience leaders - analysts like Forrester predicted that "to continue succeeding, CX leaders must prove the ROI of CX investments."
But that was in an economic and business climate that no longer exists - and it is even tougher now. Money is going to be in short supply, including public and private sector finance, as well as the disposable income of consumers, while business and consumer confidence is plummeting.
Peter Dorrington explained the implications for CX professionals: “During the peak of the pandemic, the Board agenda was dominated by short-term necessity – how to survive the lockdown and protect staff and customers. Transformation projects that would normally take many months to deliver were in place within days or weeks, meanwhile other costs were being cut to the bone. As one executive said to me: "Survival was all about cutting deep and cutting quick".
At a time when there has probably never been a greater need for a customer-centric focus, there is a real danger that CX programmes and staff will be dramatically affected by a drive to cut costs across the board.
He continued: “At a time when there has probably never been a greater need for a customer-centric focus, there is a real danger that CX programmes and staff will be dramatically affected by a drive to cut costs across the board.”
So how do CX leaders make their case to the Board? With so much on their agenda, how do you convince the decision-making unit of your organisation that continued (even increased) investment in customer experience is a sound business and financial strategy? Read Peter’s tips for selling the value of CX to the board.
Of course, it would be handy to have some hard stats to back up your argument. There are a whole host of different metrics out there, but the one that the top brass are increasingly most interested in are those that are accompanied by a dollar sign. Worryingly, in MyCustomer's survey of CX leaders, it was notable how few track financial metrics or ROI related to their CX programmes (36% and 31% respectively).
Part of the issue, however, is that proving a return on investment of customer experience programmes can sometimes be a big ask. Indeed, our survey found that a quarter of respondents said that demonstrating ROI was the biggest obstacle to their CX programme's success.
For some useful advice on measuring and demonstrating customer experience programme ROI, read the following articles:
Empathy in customer service is a priority
While there has been a growing interest in customer emotion in recent years, the last year has put the topic front and centre. COVID-19 and the accompanying lockdown created a pressure cooker environment for many households amidst concerns about health, family, finances and jobs.
Delineate’s research report, Unlocking change: How consumer behaviours in lockdown are evolving, found that anxiety was the overriding emotion when consumers were asked how they felt. And many consumers have relied on brands for reassurance during their service interactions, and require understanding and empathy.
Kym Hamer, founding board member and chief customer and strategy officer at CXSA Middle East, says: “Whether personally or professionally, the impact of feeling isolated - even cast adrift - has forced people into situations that they have never experienced and has created a myriad of responses from anxiety and concern through to self-discovery and freedom, and everything in between.
Customer service itself has come under the spotlight, with anxiety and stress rising and the need for empathy and communication paramount.
“Customer service itself has come under the spotlight, with anxiety and stress rising and the need for empathy and communication paramount both on the frontline in call centres and service outlets as well as ‘from the top’. The best communication without a doubt has been of the ‘we’re all in this together, here’s how we are aiming to help you’ ilk - organisations who’ve not done this well have suffered. Suddenly the foundations of Maslow’s Hierarchy of Needs - safety and security - have driven behaviours most of us thought we’d gotten ‘handled’ for our customers and employees a long time ago!”
Peter Dorrington believes that while there has been growing interest in customer emotion in recent years, businesses will have learned a lot this year about how much work is still required to be truly ‘human-centric’.
“Empathy is an area of growing business interest - searching for ‘empathy in customer service’ in a popular search engine yields over 46 million hits,” he notes. “This reflects an existential debate in the field of customer experience. After a decade where all the CX ‘low-hanging fruit’ has been picked, many businesses have started to focus on the qualitative nature of experience – the way it ‘feels’ to a customer, which is distinct to the quantitative ‘how it performs’.
“Many businesses have already started giving the customer-facing staff training in Emotional Intelligence (EQ), but this is still far from comprehensive, with many reliant on ‘hiring for attitude’. Meanwhile, too many customer service teams are still measured on metrics that are operationally-focussed – these are predicated on a belief that developed in the era of time-and-motion studies that there is one perfect way to undertake a task and that performance should be measured against this benchmark. Whilst that worked well in the industrial era of mass manufacturing, it works poorly in an era of personalised customer service. We need to develop new measures of performance for the service economy.”
And Dorrington also notes that while the past year has heralded a shift towards digital interactions, that needn’t come at the expense of empathy.
“The accelerated investment in digital channels is presenting new channels for truly ‘omnichannel’ operations. Specifically, in the use of intelligent automation (i.e. bots linked to Artificial Intelligence). But research into empathy conducted by MyCustomer shows that, when done well, an automated customer experience can be both effective and empathetic for the customer. However, this will need new thinking in human-centric design (for example, adding empathetic user stories to the existing functional user stories).”
There is a greater focus on the employee experience
And it’s not just empathy and support for customers that has become a priority - caring for employees has also never been of more importance. There is no doubt that the pandemic and the accompanying lockdown has had a negative impact on every single employee in some way. But those in the frontline of customer service have had to weather additional stresses and strains - and the psychological harm of this has led to serious concerns about their long-term mental health.
As Gethin Nadin, director of employee wellbeing at Benefex, wrote last year on MyCustomer: “While many workers were sent home and others furloughed, key workers were established in industries like retail. Supermarkets, chemists, bike shops, etc. all stayed open during the initial lockdown. What's more, for some retailers, they became busier than usual and employees were placed under an increasing amount of stress. Worrying evidence is now emerging that as consumers became stressed and frustrated too, employees working in customer-facing roles have started to become the focus on these frustrations.”
The UK’s largest grocery chain Co-Op reported 133 cases of abuse by customers directed at shop staff in just one day during lockdown. Threats to cough and spit at staff became a regular feature of being a key worker according to the British Retail Consortium.
The long-lasting mental health impact the pandemic will have on those customer service employees will be considerable.
The situation got so bad that some supermarkets (including Co-Op and Waitrose) had to invest in body cameras to protect shop workers, while others are trying to force the government to take more action. And it isn't just retail workers who have suffered. Employees working in almost every customer-facing role have suffered increased abuse because of the pandemic.
The Financial Ombudsman Service received an influx of complaints from consumers in the wake of the pandemic - almost 4,000 related to coronavirus. Meanwhile, The National Federation of Independent Retailers has seen growing reports of violence among independent retailers and Nationwide Building Society recorded a marked a spike in abuse directed at staff in branches.
“The long-lasting mental health impact the pandemic will have on those customer service employees will be considerable,” continues Nadin. “Employers should not underestimate the strain their customer-facing employees have been under and the help and support they will require [...] as we put increased pressure on these people to help our businesses and the economy to recover.”
Prior to the pandemic, 38% of retail workers said that their job negatively impacted their mental health in the last year. Since the pandemic started, more than half now say that coronavirus has made this worse. More than 70% of employees say this has been the most stressful period of their careers.
Nadin warns: “Employers must act fast to support the emotional and financial wellbeing of their staff – particularly those working in retail who have suffered more than most at this time. Finding ways to better support customer-facing employees with ways to decompress, relieve stress and protect staff from abusive customers should be high on your employee wellbeing strategy.”
Kym Hamer highlights that those organisations focused on the customer experience should also have put equal emphasis on the employee experience.
“The care of customer service fronliners - whether that’s in healthcare for patients, education for students, or traditional retail, banking, travel sectors - has been a critical component in creating the right delivery experience for customers,” she says.
“The empathy delivered by service staff is informed by the empathy and support that they themselves have received from their teams, their line managers and their organisations. New considerations have come to the fore. How do we equip people with the right training, tools (technology or otherwise) and organisational touchpoints that empower them to offer service that is relevant and empathetic? How do we prepare and empower our people to work remotely/at home without the close supervision and physical presence of others? What steps have been needed to measure, monitor and motivate performance in light of other pressures, such as home-schooling?”
Organisations that have focused on employee health - both physical and mental - have reported a wide range of different initiatives, including regular check-ins via video, messaging services or email to ask employees about their wellbeing, aside from work-related tasks; competitions and online quiz games or challenges to show support for work/life balance; upskilling programmes; and virtual fitness classes.
Nadin concludes: “Finding ways to better support your people as they face new challenges in the workplace isn’t just about doing the right thing, it’s about ensuring your business is also prepared for what the next year will bring and the important part your people will play in the success of that. The impact this pandemic will have on your people will affect the customer experience just as much as the employee experience.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.