Over the past few years, disruptions have come in the form of persistent inflation, increasing interest rates, and unpredictable supply chains. All of these factors have raised economic recession alarms.
How can a brand thrive in the face of these ongoing challenges?
As it turns out, data shows that focusing on CXM will help brands rise above the competition. Why? It all comes down to one thing: trust.
When a brand can consistently deliver an exceptional customer experience despite all possible external challenges, their customers are more loyal, satisfied, and more likely to buy from them again.
But earning and keeping trust is more challenging during hard times, so brands must work harder to earn it from current and future customers.
Making Customer Experience Management your brand differentiator
Seeing how customer experience is set to become the number one brand differentiator, with 49% of buyers having made impulse purchases after receiving more personalized experiences, it’s only logical for brands to tap into this need for a great CXM, especially in uncertain times.
In this article, we’ll explore what data says about the importance of managing your customers’ experiences in the context of a looming recession and what exactly CXM leaders do to stay on top. Let’s dive in.
- What’s in the consumer's mind?
- The importance of Customer Experience Management (during good and bad times)
- Good Customer Experience Management helps you thrive during recessions
- 5 things Customer Experience Management leaders do right during recessions.
- 5 actions to incorporate CXM in your brand
- Final thoughts
What’s on the consumer's mind?
Data from Google’s June Global Insights Briefing indicates that global users are already searching for ways to mitigate inflation, indicating an awareness of potential uncertain times to come.
Some of the inflation-related search terms that have grown the most include:
User search data can be a valuable resource for brands trying to design better CX, regardless of whether we are going through a recession or not.
The importance of CXM (during good and bad times)
Customer experience management has become one of the defining traits for brands to display the value they provide.
It includes everything from the quality of service or product delivery to website design and how quickly you respond to queries. You can think of it as the sum of all interactions between brand and customer across all digital and traditional channels.
Its importance as an indicator of value is growing. Data from McKinsey indicates that “customer experience improvement” is the fastest-growing priority for customer care leaders in 2022.
Being so important, CXM has emerged as a set of methods used to understand the patterns that make up great experiences, gain deep insights into customer behavior, and apply all this knowledge to improve their experiences constantly.
A good CXM plan will lead brands to boost every aspect of their operations.
These are 4 of the main benefits of applying CXM best practices in your brand:
- Great CXM leads to loyal customers, and loyal customers cost less to maintain than new customers are to attract. Fostering good, long relationships with your customers and increasing your retention rate by only 5% can net you as much as a 95% increase in revenue.
- Satisfied customers bring in new customers through word-of-mouth, helping you save on acquisition costs.
- CXM implementations allow you to be aware of your customer's opinions. This will help you identify pain points they are experiencing and come up with a solution for them. You'll have data about customer behavior, preferences, and journeys, which you will need to make the best decisions every time.
- A CXM implementation that pushes omnichannel experiences will help meet and exceed customer expectations by optimizing every interaction across the customer journey.
Good CXM helps you thrive during recessions
Recessions make most people reassess their financial priorities. People tend to choose cheaper brands for everyday essentials, sharply cut down on non-essentials and delay investments and long-term purchases.
On top of forcing people to reorganize their budgets, recessions often come with staff shortages and supply disruptions. Over time, buyers simply become used to having less spending power and less-than-ideal or even downright bad customer experiences when they do spend. All of this makes customer loyalty scarcer and much more fragile.
But it’s also an opportunity for brands to stand out by offering an oasis of good experiences in a desert of bad ones. By actively preventing negative experiences, you give customers reasons to stay loyal to you during times of uncertainty.
But it gets better. Gaining loyalty in difficult times isn’t the only reason to invest in CXM during recessions.
The Customer Experience ROI Study uncovered two additional financial benefits:
- Revenue growth: no surprises here, but it’s still important to reiterate. Good CXM fosters loyalty; loyal customers have better retention rates, and increasing retention rates is one of the most efficient methods to increase revenues.
Repeat customers are cheaper to maintain than new customers are to attract; they are less price-sensitive, and they spread the good word about your brand. It’s one of the fundamental benefits of a well-designed CXM.
- Expense control: this is the less well-known part of good CXM, but equally important. Having loyal customers helps you control or even reduce expenses. The referrals you get from them mean spending less on acquisitions, and the reduced amount of complaints (due to a lack of bad experiences) lets you save on operating expenses, like call centers.
Despite the benefits, your margin for error will be razor sharp: data by Qualtrics indicates that 80% of customers have switched brands due to bad experiences. Also, 43% claimed they would consider switching after only one bad experience.
Do not underestimate the persuasive power of a bad customer experience.
5 things CXM leaders do right during recessions.
In good times or bad times, CXM is an ongoing process.
What CXM leaders do right during recessions is often the same thing they do right during easier times: design satisfying experiences that make customers want to come back for more.
The difference lies in how customers modify their behavior during these times.
While they might have accepted less-than-ideal CX before, the stress of the recession may drive them to brands that focus on refining their experiences, giving these brands a boost and leaving others behind.
Here are the 5 fundamentals CXM leaders put into practice during recessions, according to Watermark Consulting’s study:
- Customer satisfaction is just the beginning: while providing the best CX is one of the top priorities, customers who are merely satisfied do not leave glowing reviews and refer your services to others. To enjoy the benefits of great CXM, you need to impress them with an experience they didn’t know they needed or wanted, above and beyond satisfaction.
- Focus on the details: you can’t leave anything to chance. CXM leaders dig into the minute details that make up every experience in any channel. They become good at identifying patterns and understanding the little things that make them great.
Sending personalized offers through notifications or modifying website behavior based on past purchases, for example, will blend seamlessly into the customer experience while letting them know you listen to their preferences and are willing to adjust to them.
- Memorable experiences: what customers feel during and after an interaction with your brand is one of the most important factors for building loyalty. If their experience hits all the right spots, they will firmly remember it and are more likely to purchase from you again.
- Emotional connections: just like memorable experiences, an emotional connection helps build loyalty. One way (but not the only) to build connections is gathering and taking feedback very seriously. Identify the pain points customers express and work to eliminate friction in the journey.
Let them know you are listening to them and value their opinions.
- Balance between customer and employee experiences: good employee and customer experiences feed into each other. Employees who feel valued are more motivated to provide the best experience possible, and when they do, the customers’ satisfaction improves their own working experience, restarting the virtuous cycle.
5 actions to incorporate CXM in your brand
Every business wants to provide a top-notch customer experience, but without a clear plan, it can easily become an unfulfilled objective. Vague goals won't lead to improvements.
The most successful brands we've worked with have incorporated customer experience improvement into their strategic planning, executive oversight, and day-to-day operations to internalize it into their core processes.
Here are 5 actions you can take include:
- Have an executive sponsor from the C-Suite. Someone who is empowered to make changes and prioritize investment in customer experience improvement. With this kind of support, team members across the organization will be motivated to follow through with CX improvements.
- Create an organizational structure with a team driving the organization forward in this focus area. This includes having someone with oversight over measurement management and improvement strategies. It's also important that the team be allocated the time and resources needed to accomplish their work properly.
- Develop a customer-centric culture. You need employees who care about customers. It needs to become part of the brand’s DNA and enforced all the way from the leadership to the team members making it happen.
- Strong experience management competencies. You need people who are trained and equipped with the right tools so they can design, improve, and deliver great experiences consistently.
- Invest in data, technology, and processes to support measurement, management, and customer experience improvement. You need data analytics systems that help you understand what your customers want based on what they do in real-time so that you can better serve their needs and expectations. Without this critical first step, your team won't know if you're making progress or where you need to improve your efforts.
- Develop specific strategies for addressing customer experience concerns at each phase of a customer's lifecycle with your company, from initial contact to resolution or ultimate conversion into brand advocate.
As we have seen, delivering great CXM doesn't happen by accident. It takes the effort of a team.
There is no better time than now to ask ourselves, “What do the experiences we provide mean to our customers?”.
If the experiences you provide leave lasting, satisfying impressions, you’ll have a better chance of riding out any storm.
Despite the possibility of declining spending power and rising costs, consumers will always have needs that brands can help with as long as they can recognize them.
Data has proven that those with a well-honed focus on high-quality experiences have a clear advantage over those whose products or services aren't providing the kind of value or utility their customers are looking for.
In the middle of uncertainty and unpredictability, focusing on CXM can help you deliver on your brand's promises and foster loyalty at times during which it’s hardest to come by.