Brands can thrive – even amid economic uncertainty
The Great Recession of 2009 saw one of the largest drawbacks in the past century hit the global market.
Many companies were forced to make drastic changes just to survive. However, others were able to maintain their growth, and even accelerate their plans, through proactive customer-focused strategies.
According to a Harvard Business Review study analyzing companies with exceptionally high returns in 2009, resilient organizations were found to have done two things. First: they cut costs earlier than others; by the first quarter of 2008, resilient companies had already cut operating costs by 1% compared to the prior year, even as costs grew.
Second: resilient companies focused on maintaining loyalty among high-value customers who proved to be central to the company’s long-term growth.
When planning for a recession, here are 5 priorities that drive sustainable growth.
Key focus areas to protect against a recession
Customer experience is your biggest differentiator
Just how much do customers value exceptional experiences? According to Salesforce, customers base 70% of their buying experience simply on how they feel they are being treated. 62% of customers say they share their bad experiences with others, while 72% of customers will share their good experiences with others. During a bearish market where consumers are expected to be more selective in how they spend, the value of great CX is exponential.
Loyalty is a lifeboat
Great customer experiences don’t just increase the likelihood that a company will recover from a recession, they also help secure recurring revenue throughout. According to the Replicant 2021 Customer Service Survey, 76% of consumers say a poor customer service experience negatively impacts their perception of a brand and one in three say it affects loyalty.
Conversely, increasing customer retention rates by just 5% can increase profits by 25% to 95%; loyalty leaders grow revenues roughly 2.5 times as fast as their industry peers. If you’re a contact center leader, this should come as no surprise. Customer loyalty doesn’t just create more revenue. It manifests itself in invaluable customer relationships that motivate buyers to not only stay with a product or service, but become evangelists on behalf of reputable brands.
Data drives growth
Modern customer experiences benefit brands, too. According to Katy George, a senior partner at McKinsey, the first reason to prioritize digital transformation ahead of a downturn is that “improved analytics can help management better understand the business, how the recession is affecting it, and where there’s potential for operational improvements.”
The second reason is that digital technology can help cut costs. Companies should prioritize “self-funding” transformation projects that pay off quickly, George says, such as automating tasks or adopting data-driven decision making.
Competitors may de-prioritize transformation, but you shouldn’t
It’s easy to point to the benefits of prioritizing customer experiences and innovation during economic drawbacks, but it can be much harder to get an entire organization on board. At the end of any period of prolonged economic instability, only a few companies are found to have actually implemented solutions that position them for growth. The majority of companies are instead left revisiting digital transformation projects they put on hold at the start of a downturn once it’s too late.
An analysis by Bain using data from the Great Recession found that just the top 10% of companies saw their earnings climb steadily throughout the period and continue to rise afterward. The difference maker was proactive preparation. Among the companies that stagnated in the aftermath of the Great Recession, “few made contingency plans or thought through alternative scenarios,” according to the Bain report, “when the downturn hit, they switched to survival mode, making deep cuts and reacting defensively.”
Automation is built for unpredictability
Given the recent climate defined by hiring challenges and unpredictable customer demand, a modern customer experience must include a level of automation. Customers’ primary desire in their support experiences is instantaneous service, over whatever channel is most convenient to them. Contact Center Automation is built for just this. Having only been available at large to CX leaders for less than a decade, Contact Center Automation offers flexibility and agility built for today’s world.
One study found that customer sentiment ratings increased 57.3% among companies using AI in their customer experience initiatives. Most customers believe that companies need to provide cutting-edge digital experiences to keep their business.
Schedule a demo to learn how customer service leaders are approaching economic instability with Contact Center Automation. Or, download the definitive guide to learn more about the solution.