2022 will be remembered for inflation rates that soared to as high as 9%, a figure that the United States has not experienced since the 1970s. While inflation stabilized a bit to close out the year, many economists are warning that we will continue to live in an inflationary economy for some time, with a return to normal rates not expected until at least 2025.
Continued inflation will undoubtedly impact consumer behavior. Even if the US does not enter into a full recession, Fitch Ratings economists are predicting a shrinking economy with reduced consumer spending in 2023.
As consumers feel the strain of inflation and a potential recession, they will heavily scrutinize every purchase, especially with non-essential items. With that in mind, brands will need to react appropriately to meet customer needs. Meeting the needs of customers typically starts with the level of service and type of experience provided, and this is exacerbated during times of inflation and economic challenge.
As businesses experience the effects of a slowing economy, expense reductions tend to follow closely. However, as noted global market research firm Ipsos points out, the customer experience should not be among those reductions:
“Neglecting to deliver differentiated, impactful customer experiences that show customers how much you value them is a major risk. Counteracting rising prices by reducing investments in experience and service is a surefire way to alienate both current and new customers.”
In fact, customer expectations are proven to rise dramatically as a result of inflation. Ipsos found that 68% of consumers expect immediate improvements in service as prices increase and have little patience for “excuses” such as inflation.
A recent in-depth study by Invoca digs deeper into consumer behavior in uncertain economic climates and provides even more evidence that now is not the time to pull back on your customer experience strategy:
- They’re Doing More Research: Not surprisingly, 70% of consumers are doing more research and extending their purchase timelines to find the best price. However, what truly stood out to me was that nearly 40% are dedicating research specifically to find which company will provide them with the best and most convenient experience. Consequently, companies should not give into the temptation to reduce resources that support the customer experience. Consumers expect superior support and easy-to-find information, especially in challenging times. Attempting to pad the bottom line by reducing customer support initiatives will do just the opposite.
- They Want To Speak To a Human: Despite the continued move towards automation and self-service customer support tools, 2022 saw the phone return to the top of customers’ preferred communication channel list, overtaking online options that had displaced the phone in recent years. Consumers have sent a clear message that they want the option to speak to a human to get information or solve problems. At Servicing Solutions, we have never wavered in our belief that live, trained, and empathetic agents are the key to a successful customer experience…even while many of our competitors were moving full steam ahead towards full automation in an effort to cut costs. Customers who are forced into these channels have shown that they will look elsewhere.
- They Will Pay More For A Better Experience: This study found that customers are more accepting of inflation and overwhelmingly willing to pay more if they have a great customer experience. 63% of respondents said that they will pay more for a product or service to get better customer service.
Ready to “Invest In Real Experience” to develop experiences for your customers that meet their needs and make them feel valued during uncertain times? Reach out to us at sales@servicingsolutions.com