How to deal with customer experience in times of inflation
One of the questions I got asked most often in the past weeks and months is “Steven, how do we deal with customer experience in times of high inflation?”. It’s a very relevant issue, of course, as we are all dealing with a context where customers are very mindful and careful about spending their money, and where.
So how can companies deal with this in terms of customer experience? In my opinion, there’s a short run answer and a long run answer.
1. The short run: minding budgets
An increase in price
In difficult times, a lot of companies are looking for short term measures to keep their situation safe. These are often to their own advantage, but sadly also to the disadvantage of the customer most of the time. An obvious example would be raising the price of a product or service. In fact, in some industries, this is not a matter of choice, but of survival.
But how do you deal with that from a CX point of view? The way I see it, there are 3 important points to take into consideration:
- Be transparent. You have to tell the real story about your situation to your customers. Be fully open about why you need to increase the prices.
- Be proactive and honest. Never “surprise” people with a price raise, but warn them up front and, again, be very open in your communication about the reasons why.
- Brief your team about the storyline. This one often gets overlooked, but your people on the floor will get a lot of complaints and questions about the price increase. You cannot have them provide vague answers like “It’s something the boss decided” that do not bring anything of value to the customer. So, before anything else, inform your team about the narrative so that they can share that story with the same conviction as someone else in the organization would do. That kind of on the floor communication, from employee to customer, can make a huge difference in the way difficult news is perceived.
There’s also always the opportunity to choose – unlike your competitors – to NOT raise prices. In that case, it is of crucial important to communicate about that too. I love the example of Club Bruges, of which I’m a huge fan, as you may know: they recently announced that they will not be increasing the prices of their annual subscription in a very formal and a very visible way. And I think that that’s a really smart strategy.
Another popular short term way of dealing with inflation is by cutting costs, unfortunately most often in the area of customer service. And that’s perfectly fine. Here too, companies sometimes just have no other choice but to do this. But if you do, make sure to be really smart about that: by creating ‘moments’ or offering self-service.
In one of my latest CX updates, I talked about Dan and Chip Heath’s book ‘The Power of Moments’. The premise of the book is simple yet brilliantly effective. If we would measure every single interaction of your company with a customer, most organizations would probably have an average score of about 6.5 in 10. That’s pretty normal, because they are bound to have highs and lows in the interaction. But if companies orchestrate a number of interactions that are truly outstanding, surprising and positive, the overall feeling would probably climb to a 9 or a 9.5 average.
For me, this is the perfect strategy to pair with downsizing the cost of customer experience: if you are going to cut costs in customer service, it’s crucial to rethink where you want to create a positive surprise to counter that. And if you choose those moments right, you can actually improve your word of mouth afterwards, while decreasing your costs in other places.
Another important method for improving CX while still cutting costs, is by optimizing your self-service capabilities. Just allow people to figure out how to solve problems by themselves. A perfect example of that is Dutch eCommerce company Coolblue. They constantly monitor the questions asked in their contact center and then create short and simple explainer videos for those questions that are repeated a lot. They develop thousands of videos, explaining new things every week, and they have about 130 million views by now.
They answer pretty simple questions like, “Should I choose product A or product B?” or “How can I install that TV?”. And when a customer buys a product of which they have one of these videos, then they automatically share that. And this is a great example of a self-service channel that perfectly helps customers while at the same time reducing the amount of calls that are coming into the contact center.
2. The long run: minding emotions
So, what about the long run? How do you deal with customer experience in a world of high inflation in the long run? For me, there is one crucial question for an organization to ask here: are you willing to hurt yourself as a company in the short run to win trust in the long run? Are you willing to experience some pain right now to keep the relationship with the customer strong?
My “Offer You Can’t Refuse” model, from my latest book, could be a great starting point for that. If you’re not familiar with it, a short recap: the bare minimum demand of today’s market is that you need to offer a good product, service and price and that you need great digital convenience. Good product and service plus digital convenience creates a great transactional relationship. But that’s only half of the story, the bottom half. The top of the model, being a ‘Partner in life’ – which means a more in-depth customer relationship – and adding value to society, creates a more emotional relationship.
The bottom two – great offering and digital convenience – are what helped us through COVID in a transactional way. The top two – Partner in Life and Saving the World – will have to get us through these times of high inflation: if you succeed in increasing your value to the customer and to society, you will be able to develop a more enduring emotional relationship. So help people create positive change in their life as a “Partner in life” and show the world that you really care. That will keep people loyal to your brand in these difficult times.
Imagine that you’re in the restaurant business. When you make it easy for people to make a reservation, that’s developing an efficient transactional relationship. But what if people can’t afford to go to a restaurant right now or even for a longer time? Why don’t you make it easy for them to still come to you? There are so many possibilities. Why don’t you figure out a way how to do home deliveries in a cheaper way? Why don’t you sell the ingredients and make an explainer video for preparing certain mails that you serve in your restaurant? And why not donate your leftovers to those in need? Those are the kind of things that can really make a difference for your brand today. Those are the stories that will stand out.
If you’re in real estate and are very efficient at selling houses, that’s purely transactional. But what if you really help people? What if you do anything you can in your power to help people with a limited housing budget. Or, as a landlord, if people cannot afford to rent, can you install a system to help them bridge that short period of time? Energy prices went up, food prices went up and then just lowering the rent for a few weeks or a few months could really help them out.
So for me, that is the absolutely core of CX is difficult times: are you willing to hurt yourself in the short run to create trust in the long run? Doing so is absolutely essential, in my opinion. Why? Well, you must always be aware that you, as a company, are not the only one looking to cut costs. Your customers are also in cost cutting mode today. And so your biggest challenge, in the next couple of months and maybe years, is to make yourself so likeable and indispensable that they do not cut you out of their budget.
This topic was part of my monthly CX Update video, which you can watch here: