The quality of a company’s CX does indeed influence its ability to successfully weather an economic downturn.
With a recession looming, companies make drastic moves to sustain themselves by laying off employees, restructuring, and removing products. Many studies revealed that
great customer experience drives better financial performance, since existing loyal customers who stick around longer are tend to less price sensitive and advocate the brand credibility to the new customers for the company.
Additionally, a great customer experience (CX) helps control, if not reduce expenses, as less needs to be spent on new business acquisitions and the cost to serve customers reduces as fewer complaints put less stress on a company’s operating infrastructure.
In the long term, great customer service is less expensive
Earlier, customer service was considered the essential cost of doing business rather than a revenue opportunity that is always open for deduction whenever economic downturns happens . Maintaining good customer service as it influences the repeated customer rate. Therefore, cutting back on customer service resources impacts quality, leading customers to leave the brand. By continuing business with better customer service, the cost that is expected to be spent on retaining the lost customers can be saved or could be invested in strong customer service.
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Customer service doesn’t only refer to customer calls. A report on Customers: opinion on self-service portal usage by brands U.S.& worldwide 2018 by Statista confirmed that 88% of buyers expect enterprises to offer an online self-service portal. By investing in UI tools make it easy for the customer to redirect to the company’s website independently which will result in fewer calls and emails enabling business representatives to serve customers with more time who needs further assistance.
Right investments, stronger image
At the time of recession, the obvious step that companies take is cost cutting instinctively even in the customer experience. But to survive in the recession only doing cost cutting is not a solution. Strategically assessing the processes where investment could be beneficial for the long term, will create a better image of the company. Even in economic downturns, investing right in customer experience is worth it.
Balancing between the customer and business expenses
At a time of recession, people are less likely to spend money, The survey As inflation bites and America’s mood darkens, higher-income consumers are cutting back, too by CNBC and Momentive, Americans across income brackets started cutting back their spending, particularly the luxuries expense. One of the ways to mitigate this pullback, enterprises can keep the balance between the business and customer expenses by ensuring the buying process is smooth as possible. A strong customer experience navigating them expediently from browsing to confirmed buying demonstrates that the buying journey was not exhausting.
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Earn and keep loyal customers
Gaining new customers during a recession is harder than retaining the existing customers as customers would buy from the brand they trust and have used their products or services instead of risking their spending on some new brands. Additionally, new customers acquire more costs than retaining the existing customers. Therefore, keeping existing customers happy and loyal during an economic downturn would work best for the business. In the future, these customers’ loyalty would sustain the business and would become the advocates of business loyalty and credibility.
Positive CX encourages referrals
Loyal consumers can help in the acquisition of new clients in addition to generating recurrent revenue. Customer recommendations are far more likely to be believed by consumers than any other form of advertising. They might recognize that person directly or via online reviews. Therefore, these recommendations could be driven by delivering great customer experiences.
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