The Financial Crisis of 2008 (also referred to as the Credit Crunch or the Global Financial Crisis) saw the collapse of large financial institutions, bank bailouts by national governments, and of course, massive downturns in the stock market. Eviction, foreclosure and prolonged vacancy were the media buzzwords use to describe the collapse of the housing market.
Between 2009 and 2011 we slowly returned to “business as usual” in the U.S. The economy slowly began rebuild and consumer confidence inched its way back. And yet, the global economy just suffered a monumental setback. The U.S. credit rating was downgraded, businesses panicked, and the stock market went haywire thanks to a severe lack of consumer confidence.
A closer analysis shows that key political and financial players are giving consumers a reason to feel this way. Political brinkmanship over the downgrade of U.S. debt combined with the highly-publicized woes of some of the world’s biggest companies – Lehman Brothers, Washington Mutual, General Motors, Chrysler, and Mervyns – is a perfectly rational response to current events.
Forbes reporter Robert Lenzer exemplifies the doom and gloom voice. He writes that there is “no therapy or cure for this intense post-traumatic stress syndrome to finance capitalism.” I argue there is a cure: change your mindset from reactive to proactive. Take a hard look and ask whether your company giving its customers reasons to feel afraid.
A basic tenet of economics is that in the long run, all costs are variable. In the short run it seems like a great idea to cut costs in the name of efficiency. Customer Experience initiatives are usually the first extraneous costs that get cut.
But history shows that nothing stays the same forever, and that the only constant is change. In a previous blog post I asked our clients what they wanted their customers to remember when the credit crunch became a distant memory.
Southwest Airlines is the poster child for the enormous gains that come from sticking to a mindset that values the customer during rough times. After 9/11, Southwest airlines was the only airline that offered its customers a refund or exchange. The lesson from Southwest airlines is that customer retention is as profitable, if not more profitable, than customer acquisition. This means that when the economy experiences unexpected setbacks, it’s your time to shine.
Stand out as an industry leader by giving your customers a reason to be optimistic, loyal, and confident from doing business with you. Now is the time to focus on your customer experience, retain your existing customers and establish a priceless reputation that will help to build your brand’s value.
