Exceptional experience is your greatest asset to tackle inflationby
In times like these, brands often start looking for ways to make efficiencies, and cuts to service or overall experience can typically come into the firing line. But in fact the role of delivering an exceptional customer experience has never been more important.
Brands and consumers are both having a tough time. Businesses across the board are finding it hard to recruit, supply chain issues are causing the cost of goods to rocket, and consumer confidence is beginning to falter as people feel the impact of rising inflation on their wallets.
In times like these, brands often start looking for ways to make efficiencies, and cuts to service or overall experience can typically come into the firing line – be it outsourcing call centres overseas or reducing the size of products. But in fact the role of delivering an exceptional customer experience has never been more important, acting as a key strategic buffer for businesses weathering turbulent times and helping them make the case to customers about why they should remain an essential part of their spend and continue to grow as a brand.
Risks and rewards
CX is the human touch that your brand brings for consumers – from what it’s like to visit in-store, make an online purchase, or simply the joy of using your product or service, In a crisis, delivering a standout experience is paramount. It protects your brand value in consumers’ eyes, making sure that as purse strings tighten your brand isn’t the first to be jettisoned.
People are willing to pay more for five-star service and this holds true even during economic downturns. Our research shows that consumers seek out and will pay a premium for experiences which delight them, or which make them feel important. Even in the aftermath of the 2008 financial crash, businesses who adopted a ‘quality over quantity’ approach managed to protect their sales as people looked to make savings.
In the US, as passenger numbers and budgets remained low, Delta Air Lines focused its effort on CX as a way of differentiating itself amidst a tough market of competitive pricing. It invested in improved cabin experience, inflight entertainment systems in economy, and looking after employees so they would be positive ambassadors for the brand. This helped the business grow in profitability and in passenger numbers to become the second largest airline in the US by 2018.
There’s potential for a double whammy here. As the cost of living crisis sets in, customer loyalty will become more brittle – get the experience right and you’ll thrive, but get it wrong and you’ll face the consequences. In times of economic strife consumers are simply less willing to forgive poor brand and service experiences. It’s imperative to invest in getting customer service right so that shoppers don’t switch to competitor alternatives. In the current climate, if they’re not happy they will, and they’ll be even harder to win back.
Of course, the world of consumer service isn’t plain sailing and problems can happen, but this doesn’t have to mean losing customers. In fact, providing a positive experience when things do go wrong can enhance perceptions of your brand. Making it easy for consumers to give feedback and ensuring it is acted upon is key. This should be a proactive rather than a reactive process. If teams think there has been an issue, then they shouldn’t wait for customers to flag it to them. It’s about being upfront and transparent on why things haven’t gone to plan, and how you will make it right.
Honesty is the best policy
With inflation running at its highest level in 30 years, it’s inevitable that some brands will need to make tough commercial decisions. If changes do have to be made, from passing price increases on to consumers to relocating service teams overseas, then it’s vital that customers are brought along on the journey. For the most part, consumers understand the context businesses are operating in today and it’s easier for them to be sympathetic if the rationale for any changes, is clearly explained.
John Lewis has done this particularly well in recent times, as it announced it was dropping its 97-year-old ‘never knowingly undersold’ pledge. The business communicated early and unambiguously to customers. In doing so, it protected the brand from too heavy criticism and helped consumers accept the change.
Don’t pull back
In the face of rising costs, extreme geopolitical circumstances and limiting supply chains, it’s understandable that many businesses are on the hunt for ways to reduce costs. Cuts to customer experience may feel like an easy way to protect against the worst impacts of the economy, but businesses need to take a long-term view.
CX is an essential differentiator – building loyalty, helping people see the value of paying higher prices and agree to changes to service where necessary. What’s important is that brands are willing to be transparent and keep an open dialogue with their customers, keeping them engaged as the landscape changes.