As inflation hits, good CX is paramount for consumer businesses. Our research* shows that 49% of people already say the increasing cost of living is impacting them or making them concerned. Across the board shoppers are reconsidering their discretionary spending and where they can make savings.
Brands with a poor record on customer experience are likely to be the first to go – a mediocre service will no longer do as people become less forgiving.
As CX practitioners, we must understand how inflation is impacting shoppers’ priorities and needs, and champion the value our discipline can bring to protect businesses and even help them grow during tough times. So how can brands deliver excellent CX and win in an increasingly challenging field?
1. Don’t cut corners
As inflation takes hold, it’s wrong to say that consumers are only on the hunt for the lowest price. Actually, we find that people become more risk averse, not cost averse, in inflationary times. Customers want to be confident that they’re spending their money well and that they can trust the brand they’re investing in. CX is a crucial tool to convince them.
We know that people are happier to pay more for exceptional customer experience, even during recessions. People will spend more on a product or a service that they can rely on to match expectations, deliver quality and enjoyment. What does this look like in practice?
Focus on making excellent CX part of your business model. Some newer retailers are doing this well by using personalisation to help consumers feel they are getting a service worth a premium price.
Online stylist firm Stitch Fix uses AI to provide personalised outfits to each and every customer, based on shopper information about size, style and preferences. It also learns from customers’ immediate feedback to constantly improve its personalisation, and communicating this optimisation clearly helps customers trust that they’re getting a valuable service.
2. Empower your employees
People trust people. Given the emphasis that brands should put on their reliability and commitment to delivering for consumers, empowering their employees to interact with shoppers and shape positive experiences is absolutely essential.
Incentivising staff to focus on CX can work well and lets colleagues know that it’s a fundamental part of their job – not an add on. Brands like Apple, for example, reward employees not based on the number of sales they make, but on key customer experience metrics. This encourages them to go the extra mile, rather than rushing customers into a sale which they might regret later.
3. Address issues quickly and decisively – don’t give people reasons to stay away
Things won’t always go right. In times of economic pressure, people’s patience for mistakes and poor service wears thinner. Brands need to respond to problems quickly and proactively, or risk customers not returning. Having a powerful, real time feedback mechanism is crucial for this. People want to feel that they’re being heard, and that suggestions or complaints are being acted upon. A bot function may seem an easier way to ease the burden on employees, but it can actually do damage to your brand perception if it leaves customers frustrated.
The important thing is to make the complaints process frictionless for consumers and to close the loop on any concerns as quickly as possible, turning disgruntled customers into happy ones. Ocado, for example, offers instant refunds for any items which aren’t right or are missing from an order, and customers can instantly ask for their money back via its app.
By making this process as easy as possible, Ocado has minimised the risk associated with errors or supply challenges. People can trust that even if their order is wrong, they’ll be able to resolve the issue without any hassle.
4. Be up front with customers
Inflation is inevitably going to mean that some businesses have to make tough decisions, whether it’s increasing prices or changing what’s on offer. What will be crucial is communicating this to customers in a way that is frank and honest. It’s no secret that this is a tough time for consumers and businesses alike. By explaining the rationale behind changes, brands can help people understand why cuts are being made, making them more sympathetic and accepting.
Ferrero’s recent product recall over salmonella in its Kinder eggs is an example of a brand getting it right. The business communicated quickly and widely to explain what had happened to the public. For those who requested refunds, it sent detailed apology emails which set out how the issue had arisen and what the business was doing to fix it. While not a result of inflation, the principles still stand: be honest, be proactive, and be clear with consumers to help take them on a journey through tough business decisions and events.
Loyalty in times of crisis
People are savvier than ever about where they spend their money, but it’s not all about cost. What people are looking for is something they can trust. CX is an essential tool to build that trust for customers, helping them to see brands as worth spending money on. It’s important that businesses think long term – it’s not about entering a race to the bottom on prices. Instead, businesses need to be transparent, talking to their customers and continuing to stay ahead. Understanding how consumers react to inflation and economic challenges is a crucial first step to weathering the storm.
*Kantar global issues barometer wave one 2022