By examining how past recessions have affected the retail industry and call centers, customer experience and marketing teams can prepare for the next.
Recessions have a unique impact on all industries and teams, and each team has their own responsibility to help their organization weather economic instability. Interestingly, research shows that the quality of a company’s customer experience (CX) is an important factor in how well a company can weather a recession successfully. This is especially true in retail, an industry dependent on customers’ whims and spending habits — and which is particularly vulnerable to reputational damage when customers have bad experiences.
By examining how past recessions have affected the retail industry and call centers, customer experience and marketing teams can prepare for the next. There are many strategies and tools they can employ to ensure their customer experience is as resilient as possible through future recessions. Here are some of the most common impacts call centers are seeing and what technologies or strategies can be employed to address these challenges.
Consumer spending is slowing
Recessions typically result in customers cutting back on spending, and they’ll likely be more cautious about where they even consider spending their money. A major deterrent for consumers is experiencing a negative interaction with customer support. The potential to deter customers from these bad experiences is already palpable in normal economic times, and a recession only makes it worse.
However, the opposite is also true: good customer support experiences will help companies build customer loyalty and trust. Customer loyalty is an invaluable resource for CX teams to nurture during a recession. When people can quickly and efficiently resolve an issue with an agent, they are less likely to cancel orders or abandon the brand. The Harvard Business Review notes that during a recession, “Marketing isn’t optional — it’s a ‘good price’ that is essential to generating revenue from these key customers and others.”
Interactions subject matter experts emphasize that the last thing companies want to do during a recession is lose loyalty and business. Still, many companies turn to CX when they need to cut costs or lay off staff. An alternative to this plan is to prioritize customer relationships to earn loyalty and gain a competitive advantage over companies that choose to divert resources from CX.
For example, one important way to keep the customer relationship first is to invest in intelligent, conversational AI. Customers get quick and easy answers to their simple queries, and call center agents have more time to attend to customers’ more complicated issues—ultimately increasing customer satisfaction.
Making more CX investments will be a tough sell
Businesses need to reassess their spending habits and investments during recessions. This can include laying off employees or cutting budgets. Investments in innovation and technology may be on the wane as the organization seeks to focus on weathering the current storm and focus on day-to-day operations. CX leaders need to be able to make the case for the resources and innovation they need to keep customers happy and loyal in call centers and other customer-business touchpoints.
According to Interactions experts, mapping the customer journey is an important step in preparing for this aspect of a recession. Companies can map this journey at any time, ideally when things are going well and the CX team has the resources and money to put it into the mapping. This helps identify areas where the contact center needs improvement, where costs are too high, and where more investment needs to be made. Knowing the customer journey from this reduced view helps companies prepare for uncertain events in the future – by knowing which areas can work with fewer resources and which cannot be further reduced. Another key benefit of customer journey mapping is that businesses can learn what kind of technology they can use to support a reduced budget to prepare for times of economic uncertainty.
Customer segments will look different
Many customers buy in a recession for different reasons than in healthy economic times. A customer may exhibit a type of buying behavior when they are confident about the future and thinking more about their lifestyle than about survival. But a recession brings out the more cautious side of many customers. According to the Harvard Business Review, emotions about the bad economic situation will lead to different purchasing decisions. They are more likely to forego purchases such as travel, food, cars, entertainment, consumer electronics and more – and instead focus on the essentials.
For marketers, this means that a positive CX is especially important when a customer is asking for support. They already feel more reluctant to buy items – especially non-essential purchases – and that one bad experience can throw them off your brand altogether.
According to the subject matter experts at Interactions, this is where the right technology can help. With simple requests, customers can walk through an AI-enabled virtual agent and have their issue resolved quickly and seamlessly. When agents have more time to focus on higher-value conversations with customers, they can help them with complex or emotionally challenging issues and make them feel good about their purchase and their overall experience with the company.
Start preparing for the next recession
Recessions come and go, and by developing a game plan early on, your CX team can ensure the customer experience is as positive as possible during uncertain economic times. Smart technology investments ahead of market reversal can help your business stay healthy and keep customers coming back even as they reconsider their buying habits. For example, technology like Interactions Conversational AI-enabled intelligent virtual assistant leverages AI and human understanding to create positive CX and allow human agents to focus on more complex customer service issues. Don’t fall behind. Start preparing now for the next economic downturn, and your business will be well-positioned to weather the storm.
Learn more about Interactions’ AI technology solutions at interactions.com.