If you’re familiar with the Chinese lunar calendar, you likely know that we’re currently in the Year of the Tiger. However, most customers probably relate more to another name for 2022: The Year of the Squeeze.
A perfect storm of difficult conditions, steep inflation, myriad international crises, and supply chain woes are reshaping the customer experience (CX) in ways that were unimaginable even 2-3 years ago. As a result, organizations have had to adapt in novel and unforeseen ways to stay ahead of the curve and stay the course toward their Experience Improvement (XI) goals.
As an experience strategist who’s made a career out of observing (and building solutions for) these trends, I think it’s helpful to frequently take stock of the current experience landscape and let organizations know not ‘just’ how customers are coping with it all, but what brands like yours can do to respond in a meaningful and mutually beneficial way.
How Customers are Coping with Current Challenges
Whether it’s stalled Ukrainian grain exports affecting food prices or breakages in the global supply chain, the aforementioned challenges facing customers have complex ramifications and no quick solutions in sight. As such, customers are continuing to respond to the turmoil with behavioral shifts that have profound consequences for CX programs, the companies that run them, and the success of the experiences that those companies deliver. What follows are some of the most prominent behavioral shifts I’ve observed recently.
First, in an attempt to adjust to higher costs of living, customers around the world are borrowing a record amount of consumer credit. The rate of increased borrowing is staggering in some countries and regions; according to the Bank of England, the UK saw a borrowing increase of £1.8 billion in June, up from a £900 million increase in May.
Additionally, when customers around the world aren’t borrowing additional funds, they’re trying to cut spending in almost every sector imaginable. Consumer spending on clothing, footwear, streaming services, and more is down, while shopping at discount grocers and on private-label goods is increasing. More customers are also taking on second mortgages as others stay put, resulting in a house move rate considerably more sluggish than during its fever pitch a few years ago. Finally, more customers are shopping around as convenience is slowly being overtaken by a preference for cost savings.
To put it simply, customers are feeling the Year of The Squeeze, and many of them don’t see the pinch lessening in the near future.
How Your Organization Should Respond
Though the picture I’ve illustrated may seem bleak, companies’ chance to respond to customer coping strategies in a thoughtful, human, and constructive manner is anything but. Brands must consider not ‘just’ the challenges facing customers, but how those challenges are altering customers’ values and what they consider important in an experience.
Understanding that shift is half the CX battle, and designing your program around that end creates meaningful Experience Improvement.
The first thing to consider, especially in the context of customer coping strategies, is what I call the dynamic between value (for money) and values (for purpose). In other words, what are customers considering more valuable about your experiences? Is it shared opinion over factors like environmental friendliness, or is it how much your experience can help them save money during adverse times?
At present, the answer leans toward the latter; shared values have certainly become more important to customers in recent years, but the challenges highlighted above have caused many of them to prize budget management over, for example, sustainability credentials. They favor experiences’ economic worth over their aspirational worth.
The balance between these two factors varies between industries and across generations, but being sensitive to these shifts will help you chart the best course for your customers, your employees, and your bottom line. It all ties back to the notion of building for the future; avoiding overreliance on short-term drivers, staying true to the value you deliver, conveying that value in a simple and accessible manner, and ensuring that your customers feel connected to as people, not just consumers. You can discover—and quantify—these end goals by designing or refurbishing your program around them. Prove that you can sympathize with your customers’ struggles, and they’ll become more personally connected to your brand.
Several major supermarket brands in the UK offer free meals to schoolchildren during the holidays. These brands used their CX programs to listen intently to customer struggles and adapted their experience in a highly specific manner that they knew those customers would appreciate. This added effort from the supermarkets made a tremendous difference to these customers, much more so than gathering metrics or focusing solely on short-term business drivers.
Multiple large credit card brands in the United States extended relief to customers experiencing financial and food hardships these last few years. One brand allowed customers to skip two premium payments in a row with no penalty, while another provided assistance related to payment tithing, fees, and late payments. A third launched a points donation matching program to feed local communities.
These types of short-term, people-focused initiatives and programs show customers that you care. They go a long way toward creatively building better customer relationships by truly listening to and understanding their issues.
A Champion in Challenging Times and Beyond
No one asks for a storm of challenges like the one we’re all currently facing, but uncertain times can produce dragon-slaying heroes, which is what you can be for your customers and employees. Indeed, as unwelcome as uncertain times are, they perhaps can give you the best opportunity to deliver authentic, memorable, and meaningful experiences for your customers.
The key to doing so lies in the willingness to examine your brand’s DNA. What can you offer that elicits positive experiences and surprises? How do you make customers understand that you value them, eliciting gratitude and loyalty in return? Additionally, are you equipped with an experience platform that can examine sentiment, not just produce metrics? Wherever you’re at in that journey, undertaking this process will enable you to fully understand how your customers are coping with current challenges and what you can do now to build trust that garner long-lasting relationships.
This is a timely and important post. A grim reality in the ‘Year of the Squeeze’ for customers, and customer experience, is that it extends to employees as well. With the high rate of employee churn around the world, which is almost industry-agnostic, this has the real potential to impair customer-related processes, their experience, and the perception of personal value. There are multiple, and negative, levels of business outcome impact here.
But, there is salvation in the form of how some progressive, stakeholder-centric companies have recognized that leaning-in, and being more proactive in terms of customer value, benefits customers and also gives employees more of a sense of investment and purpose: https://customerthink.com/delivering-unique-attractive-even-branded-customer-experience-lagniappe-any-company-can-do-this/