For many companies, autumn is the time to review their expenditures and make annual plans. As I am writing these words, I almost hear thousands of CEOs ordering their teams to slash costs whenever possible. The crisis is coming! We need to save; profits are at stake!
I am not arguing that there is no crisis. COVID is causing economic difficulties since early 2020. Businesses in entertainment, HoReCa, and travel industries are fighting for survival. But others, like grocery retailers, are not. Many industries have seen explosive growth: e-commerce, delivery services, or electronic entertainment. Yet we hear about abrupt cost-cutting on every corner; even in the sectors which only had to gain from the new situation, like SaaS or telecom.
I knew this was coming already in summer when the level of service throughout all my personal interactions has suddenly dropped from good to barely decent. New rules appeared – most of them had little impact on safety, but a lot on experience. Phones weren’t picked up. The front line became distant and almost rude, as if the last ten years of improving customer experience have not happened. It felt like the bad 00s all over.
I thought that maybe I was too harsh, but apparently, I was not the only one noticing it. The recent NPS benchmarks (USA data, for example) throughout many markets show that others saw the same problem:
Look, I get it. Just like during the financial crisis, budget lines related to Customer Experience are in the top of the hit list. CX is a long-term investment; many companies still struggle to prove its ROI. Besides, it is so easy to scratch out: the results of it will not affect the high office, at least not immediately. People who will face the consequences will be in the front line and on both sides of the phone.
But also, just like during the financial crisis, consumers bring their money to places that don’t save on CX. I shop at retailers with polite staff, clear and easy to follow COVID rules, and new customer-friendly policies. I use services which had proven to be fast and effective with my time. I gave my reduced budgets to those who treat me well in these challenging times.
Guess what: I am not the only one like this. Since the credit crunch, we have seen companies who invest in CX, outdo the ones who don’t. Moreover, those who invested during the credit crunch are now doing 10 times better than those who didn’t. Some of those CX misers don’t even exist any more, like Chrysler who went bankrupt and never recovered. Compare them with Lexus who had implemented the new CX Strategy: at the moment they fare 3-6 times better than automakers who hadn’t. Hyundai made a brilliant move in 2010, offering to take a car back at no cost if the buyer lost their job – and thrived. And Ford is copying that move now, in 2020.
Remember how Netflix broke through? It was during the crisis, while Blockbuster went bust after increasing fines and reducing its overall service levels. Happy customers are good for profit even in good times, but in bad ones they are crucial. When the steady stream of pre-COVID customers dries out, loyalty becomes the best currency, and good CX is the only way to assure it.
So, dear CEOs, when the initial knee-jerk reaction of slashing costs is gone, please revisit. Make Customer Experience your COVID strategy. It works, and we can prove it.