Most executives agree that customer experience (CX) is critical to maximizing profits and driving loyalty in 2020 and beyond, according to a PwC report on the future of CX. A hot topic of corporate conversation in 2019, CX will continue to be a strategic directive for consumer-facing companies in every industry. Another strategic imperative this year, grim though it may be, is planning for the possibility of a recession.
As the longest economic expansion in American history continues, CEOs are growing increasingly concerned that the next recession is just around the corner. The Conference Board’s 2020 annual survey found that it’s the top CEO concern in the U.S. and globally. It makes sense; while expansions don’t simply die of old age, the tide will turn eventually. An economic slowdown would be a perfectly normal occurrence after more than a decade of sustained growth. So, what does that have to do with CX?
Rising Above a Recession
It turns out that there’s a key attribute that makes certain companies more resilient in the face of unfavorable economic conditions. Research from advisory firm Watermark Consulting indicates that the quality of a company’s CX is a major factor in determining how well that organization can weather a recession. The study found that although CX leaders weren’t entirely immune to the effects of the most recent economic slowdown, they were often able to maintain — and in some cases even gain — value (in terms of share price) during the contraction. This was not true of companies considered CX laggards, which typically lost significant value during the same time frame. CX leaders saw a total cumulative return of almost three times more than laggards.
The good news? If your company has already taken steps to improve its CX, then you’ve simultaneously been positioning yourself to withstand the next recession. The great news for everyone is that there are plenty of other steps companies can take to prepare for an economic downturn by boosting CX. Consistent speed, convenience, and human connection build a foundation for a positive experience, but it’s important to go above and beyond if you want customers coming back even when wallets are light. Here are three priorities to consider:
- Diversify your offerings.
Companies tend to consolidate vendors during a downturn to help cut costs. If you have clients that are using your product or service in conjunction with several others, you may want to consider adding related services to your current repertoire. Consider what complementary offerings you could add to your service list, ideally without having to hire extensively.
“If you just do one thing, you’re at a little more of a risk,” says Matt Baker, vice president of corporate strategy and international expansion for FreshBooks, an accounting software company. “I’m not saying you go from digital marketing to being a home contractor. But if you’re in digital marketing, (maybe) you branch out to social media. That diversification allows you to have a different offering if one offering dries up.” To determine how best to bulk up your service lines, make note of the additional services your current clients and leads already request. That way you’ll know where there’s some demand.
- Pursue product segmentation.
Service-based companies are usually hit the hardest when the economy turns sour. Gym memberships, car washes, and food delivery subscriptions are often crossed off the list in favor of at-home and do-it-yourself alternatives. Especially if you’re a service-based company, you may have to get creative in order to keep customers. This could include offering temporary discounts, tiered membership packages, or lower-cost online/remote assistance rather than in-person help or coaching. Customers will appreciate the convenience and generosity (what PwC calls “charitability”) of having more realistic options.
It’s always better to be making some money than no money at all, and this is especially true during a downturn. Now, before a contraction, could be a good time to reconsider your product strategy. “During a recession, consumers are looking for ways to save money,” notes Adam Ortman, director of innovation and technology at media agency Generator Media + Analytics. “To stay relevant, think about new ways to offer your product that focus on lower price points.” If you can get people to purchase just an app or video series, for instance, you can encourage their loyalty until they’re ready to pay full price again.
- Partner in development.
One of the best ways to drive superior customer experiences is through co-creation. Take Lego, for example. The company’s Lego Ideas site welcomes product idea submissions, while its Mindstorms platform enables the development of programmable robots designed around user insights. Both initiatives have helped cultivate an engaged and enthusiastic community around Lego’s products — enhancing the lives of customers and generating loyalty that will help the company get through any economic downturn.
The solicitation and use of customer feedback is a critical component of the experience provided by Lego and other CX leaders. By incorporating feedback into product development, a company lets customers know that their voices matter and encourages future interaction with the brand. If customers consistently feel truly heard — and are even able to see their ideas brought to life — they’ll be more apt to continue doing business with you regardless of what the economy looks like. The simplest way to start asking for feedback is to send email surveys after any brand interaction, but make sure that a customer representative follows up to share what changes will be incorporated based on the customer’s response.
When the economy lets you down, don’t turn around and do the same thing to your customers. Put them first, and let your superior CX speak for itself.
Have you read?
Add CEOWORLD magazine to your Google News feed.
Follow CEOWORLD magazine headlines on: Google News, LinkedIn, Twitter, and Facebook.
Thank you for supporting our journalism. Subscribe here.
For media queries, please contact: email@example.com