Economists agree the U.S. is currently not in a recession, but 99% of business leaders recently polled by CFO.com say their organizations are preparing to cut costs this year amid economic uncertainty.1 It’s likely yours is, as well.
Where do you start? I can’t speak to every aspect of your business, but what I can say is that customer experience is crucial even (and especially) during tough economic times. You can’t cost cut your way to better CX. In fact, the time to spend on CX is now.
- Brands that deliver superior CX bring in 5.7x more revenue than lagging competitors (Forrester)
- Customer experience drives more than two-thirds of customer loyalty, more than brand and price combined (Gartner)
- Revenue growth is 3.5x higher when customer service is perceived as a value center (Accenture)
Economic downturns don’t last forever, and research shows consumer demand actually heightens during times of macroeconomic concern. But CX investment needs to be deliberate. You need an eye toward technology solutions that increase productivity and reduce costs while enhancing the experience for both your customers and employees. Let’s dig into this, shall we?
Why invest in CX now?
In addition to the above findings that prove the power of CX investment, Metrigy’s 2023 Technology Spending Forecast found nearly 50% of companies plan to increase their total technology spending in 2023 (specifically, by an average of nearly 26%) with customer engagement listed as a top priority. In fact, 85% of companies prioritize customer satisfaction over agent productivity.
Our own 2022 research also shows that customer service impacts brand loyalty for 95% of consumers, and 44% will abandon a brand after two bad service interactions. The key takeaway is clear: higher CX spending correlates with success in customer satisfaction, employee productivity, costs, and revenue.
More companies are making the connection and getting on board in 2023.
Not fully convinced? Here are four specific reasons organizations should be upping the ante for CX spending:
- Customers need help more than ever in a down economy. The need for customer support will never go away, but during tough times customers tend to reach out more frequently (think membership pauses, requests for discounts, etc.). This is especially noticeable in industries like financial services, retail, and hospitality. Providing the experience customers want and expect now will lead to loyalty through and beyond whatever happens in the future (recession or not).
- Help is staying virtual. Virtual service isn’t ending with the pandemic. Consider AI voice and chat bots: 74% of customers say they prefer these bots for help while looking for answers to simple questions. Digital redirection, mobile apps, and other virtual options are growing to deliver service in a way that accommodates preferences while adding value.
- The unhappy customer voice is loud. You may have learned the hard way that a poor experience gets amplified when a customer chooses to share it on social media or a review site. I’ll say it again: you can’t cost cut your way to better CX. You need the right solutions to support your customer-facing employees (research linking the relationship between EX and CX is irrefutable and plenty), protect your organization’s reputation, and ultimately build trust.
- Investing more in CX now will help you save more overall. The less effort customers have to put forth to get service the better, but the benefits don’t end on the consumer side. Low-effort experiences, enabled by investments in CX technology like proactive communications and contact center analytics, can help your organization reduce costs long-term by decreasing up to 40% of repeat calls, 50% of escalations, and 54% of channel switching.
Customers don’t stop consuming services during tough times. Are you ready to give them the experience they deserve?
Customers and…employees?
CX is one of the most crucial aspects of your business to focus on during an economic downturn because you need to retain the customers you have and gain additional customers who want to engage with your brand. But what about the people who are engaging those customers? The ones who are the face of your brand? Investment in CX helps them too!
While your customers will enjoy fewer escalations and transfers, your agents will enjoy less busywork, less customer incivility, and greater end-to-end support. Let’s say you increase investment in CX via Artificial Intelligence – specifically, AI-powered speech analytics. You’ll get real-time insights into each conversation that help you uncover trends and root causes of service issues while at the same time empowering your agents to work smarter and faster (i.e., being able to organically upsell and cross-sell or make a targeted retention offer with key customer data displayed at just the right moment).
Another great example is proactive service. Gartner reports that 60% of CX leaders use proactive service to resolve customer issues more effectively, and 85% of customers end up reaching out to customer service after this proactive outreach. Being proactive gives your customers, your employees, and your company several advantages:
- First contact resolution
- Greater self-service resolution (especially helpful for such things as bill pay)
- Lower call volumes (freeing up agents to handle more complex or fragile situations)
- Reduced operational costs
- Minimal customer effort
In early 2022, Metrigy found annual agent turnover was up to 32%. As you consider your CX spend, you must consider how to empower your agents to shape and influence service and feel more content in their jobs. Engaged agents deliver better experiences, period (and they’re much less likely to churn). I encourage you to check out this blog I wrote last fall that elaborates on specific ways to do so in line with CX investment.
Yes, you can reduce costs and increase productivity without hiring people.
Let’s talk automation. Companies across every type of industry are prioritizing the tech to meet growing customer expectations seamlessly and in real-time while driving down contact center costs. I have seen various studies that say companies plan to increase investments in automation, and they believe customer satisfaction will decrease without it. If you’re not sure where to spend on CX or increase investment, all signs point to contact center automation.
There are a number of solutions to consider here:
- Conversational AI has come a long way, and more companies are embracing practical uses (for example, “talking” a customer through the steps of a simpler process like filing a support ticket or filling out a credit card application in a human-like, two-way conversation). Companies gain the ability to address customer questions, and will do so more effectively as AI becomes increasingly intelligent, without having to utilize more agents on the front line.
- Contact center multichannel recording automatically captures all contact center interaction recordings, whether through voice, chat, SMS, or any other channel, to help better manage regulatory requirements and improve agent performance – directly improving CX.
- Automated self-service tools exploded when everyone needed to reach service reps from home, and our own 2022 research shows that 81% of customers want more self-service options. A good place to start is your website. Do you have self-service options available? If so, are they easy to find and user-friendly?
- AI-powered agent guidance, which automatically pushes supports like improvement tips embedded in the agent desktop, has been proven to significantly increase productivity.
- Augmenting your staff with automation, including quick and accurate Robotic Process Automation (RPA) bots that work around the clock to increase throughput and capacity, can be a real game changer.
Now is the time to explore automation to raise the bar on CX and EX without the expense of hiring additional employees (a.k.a. every contact center manager’s dream, especially during an economic downturn).
CX is a profit center. NICE can help you turn it on.
Cutting spending in anticipation of economic uncertainty is sensible, but cutting CX spending is one of the worst things organizations can do. Customers need to be thoroughly satisfied with their service to continue spending with and advocating for your brand. You can’t cut spending in this area and expect to continue as if nothing has changed. If something’s got to give, let it be anything other than this core part of your organization.
There is a proven link between the customer experience (CX) and revenue. We saw it during the pandemic, and it continues to be the case. A new report from Gartner shows how companies are failing to meet customer needs. The solution is a smart CX strategy with supporting technology replacing outdated systems and processes that prioritize short-term profits over long-term relationships. Read more in Rethink Customer Experience for a Disrupted World with the CX CORE Model: A Gartner® Trend Insight Report.
As the world’s cloud CX leader, NICE is the authority in CX. When we say now is a good time to double down on CX, that’s sound advice steeped in longtime industry experience. Investing in CX will help you increase productivity, reduce costs, empower your agents, delight your customers, and keep you ahead of your competitors during unprecedented times.
Check out our cloud solutions here. You can also watch our demo to discover more, then contact us for a quote to get started.
[1] CFO Dive: Rampant budget cuts anticipated amid recession fears (2023)