Yes.
I do think that the answer is that straight forward: Customer experience is critical in an economic downturn. But in this environment, there are a lot of questions.
When I surveyed executives from large North American firms earlier in the year about the impact of a potential economic downturn, only 15% of respondents felt that customer experience would become less important and 42% thought it would become more important.
And when we asked about spending changes, 35% of respondents said that their firm would cut spending on customer experience at a lower rate than other areas. Only 10% of respondents thought that they'd be cutting customer experience spending at a higher rate than other areas.
I think that it's reasonable to ask: Why should customer experience be more resilient than other activities? Those of you that read my research or read my by blog (Customer Experience Matters) know that I often write about a concept called Experience-Based Differentiation (EBD). It's a blueprint for customer experience excellence which is built on three principles:
- Obsess about customer needs, not product features.
- Reinforce the brand with every interaction, not just communications.
- Treat customer experience as a competence, not a function.
To understand why customer experience should be resilient, let's look at how each of these principles of EBD plays out in an economic downturn.
1. Obsess About Customer Needs
Rather than racing to bring new product features to market, companies need to refocus on the needs of their customers — who might even want fewer features. While most firms have invested in customer analytics, even the largest data warehouse and most sophisticated software can't model the nuances of human likes and needs. That's why firms should augment data crunching with some old-fashioned techniques like getting feedback directly from customers.
In a changing economy, customers re-evaluate everything. Their basic needs may not disappear, but their priorities shift and they look for creative ways to satisfy those core needs. So it's more important than ever to understand what's going on in the lives of your most important customers; deciphering their shifting requirements. With credit markets tightening, for instance, it's shouldn't be a surprise if layaway programs (like those at Kmart) become popular again with consumers.
2. Reinforce The Brand With Every Interaction
Advertising can still get some consumers to buy. But marketing messages can't overcome the reality of a bad experience. That's because customers are much more interested in what a firm does than in what a firm says that it will do. To tap into the power of a company's brand, marketing messages need to match the actual experiences that customers get when they interact with a company.
In a down economy, many companies are developing contingency plans and cutting budgets. With such a push for cost cuts, it's easy to lose site of your brand's core tenets. If companies let this happen, they'll quickly lose their differentiation; losing even more customers. To avoid this downward spiral, make sure to use your brand as a framework for setting priorities and keep reinforcing the importance of your brand with employees.
3. Treat Customer Experience As A Competence
Delivering great customer experiences isn't something that a small group of people can do on their own — everyone in the company needs to be fully engaged in the effort. It all starts at the top; the CEO and his executive team need to be fully engaged in the effort. To keep a companywide focus on customers, companies need a systematic and continuous approach for incorporating customer insights into all of their efforts.
When times get tough, employee morale can drop rapidly. If this happens, then customer experience will drop as well. One of the laws of customer experience is that unengaged employees don't create engaged customers. Left unchecked, firms will lose the loyalty of their two most precious assets: customers and employees.
Hopefully I've answered the question about why customer experience should be more resilient in a downturn. But you might be wondering: why did Bruce write this post on the Net Promoter blog? It's because I'm speaking at the upcoming Net Promoter Conference in San Francisco. The topic of the event, Driving Customer-Focused Behavior, is directly aligned with my research and consulting efforts. My session will focus on recent research about the five stages of customer experience maturity.
I'll end this post with one last question for you to think about: What path will you take with customer experience? One thing is true about all economic downturns: They all come to an end. So you have to decide whether you want to manage your way through it or lead your way out of it.
Good luck navigating these difficult times!
