What customer service leaders can learn from previous economic downturns

Customer service and support leaders in 2022 are feeling the “triple squeeze” – persistent high inflation, scarce and expensive talent, and global supply challenges. This combination of factors will make navigating the next recession far more challenging than past downturns, with most of us having never experienced all three factors at the same time. 

However, Gartner analysis of past economic downturns suggests that, by acting now, you’ll better position your organisation for longer term gains and returns that slower movers won’t see. There are five actions customer service & support leaders should take now to get ahead of their peers.

1. Contribute to the top-line by creating customer value

Good service interactions don’t automatically support customer loyalty. Rather, organisations need to go beyond issue resolution and help customers feel confident in their decision to purchase their existing product or service, which is the real driver of loyalty through service. So, to deliver the top-line contributions increasingly expected by leadership, customer service leaders should develop Value Enhancement (VE) strategies. 

VE is a strategy that uses customer service interactions to increase customers’ perceived value of their current product or service, and their confidence in deciding to purchase from your organisation, both of which improve customer loyalty.

VE is an increasing focus for customer service leaders, but in the face of cost pressures, consider taking a more targeted approach to its delivery. For example, focus on segments that present the greatest renewal or repurchase risk, and look at how VE can be delivered more cost-effectively in self-service channels.

2. Influence the C-suite on cost reduction and avoidance

Customer service and support functions have traditionally been considered cost centres, and might therefore be a target of cost-saving initiatives. But one of the things that we learned from the early days of the COVID-19 pandemic and the financial crisis is that many companies swung too far in their cost cutting, with some coming out of the economic downturn in 2020-2021 feeling like this had actually hurt their recovery. 

As a result, customer service and support leaders must seek to maintain their limited budget in a way that agrees with C-suite priorities by creating a list of trade-offs and making the case for each in order to manage spend. In particular, customer service leaders should:

• Make the case for continued investment in digitisation - this can put organisations in a better position for the future, and 69% of CFOs intend to increase spending in this area, so access to funds should be easier

• Aggressively source digital talent to support this investment 

• Reduce overall attrition costs by shifting to a human-centric workforce design, including embracing radical flexibility

3. Migrate volume to digital and self-service

For many customer service and support clients Gartner speaks with, the natural reaction to the “triple squeeze” is to contain costs by reducing customer use of expensive agent-assisted channels. While this makes a lot of sense in theory, customer service leaders should be mindful that simply adding self-service functionality will not guarantee self-service migration in practice.

Gartner research shows that simply adding or integrating channels will lead customers to utilise more channels during their resolution journeys. Instead, leaders can improve self-service adoption by improving functionality, and by optimising the search engine experience for digital customers.

4. Improve, automate, or eliminate inefficient processes

In addition to migrating volume to digital and self-service, customer service leaders must look at how processes can be delivered more efficiently, or eliminated where appropriate to reduce cost pressure. This might include moving workforce planning from Excel to a Workforce Engagement Management (WEM) solution, or augmenting reps through tooling that surfaces insights enabling the personalisation of interactions. 

However, the answer isn’t to simply take a process and automate it. Rather, leaders and their teams should think longer-term. They should challenge themselves to redesign, convert, or even eliminate the most ingrained of processes. If a process cannot be automated in its entirety – for example, moving that customer interaction from the phone to a chatbot – doesn’t mean it should be passed over. Automating components of a customer journey or back-office process can also contribute to the lower-effort experience customers and reps expect. 

5. Assess outsourcing options and partnerships

Outsourcing can provide cost savings and a way to augment the workforce in a talent shortage. The good news is that these cost savings do not have to be made at the expense of the customer experience. Many leading service and support organisations are evaluating current business process outsourcing (BPO) vendors and assessing new partnerships for their ability to deliver on the right processes and operations.

Customer service and support functions should:

• Outsource things like surveys, data analytics, and basic support which can deliver cost reduction with limited CX impact

• Make sure current outsourcing partners are aligned with the organisation’s CX and efficiency goals. The best BPO partnerships are measured with a limited number of key performance indicators, allowing BPOs to focus on positive customer outcomes.

By following these five steps, customer service and support leaders can effectively mitigate the impacts of the “triple squeeze” they face, without reducing the level of service offered to their customers.