Mid adult manager and his younger colleagues reading a shocking e-mail on a computer in the office.
Forrester recently released Predictions 2023: Customer Experience, a report that foresees 2023 being “a year of reckoning for customer experience (CX) programs as companies struggle to focus on customers.” For some customers, depending on who they do business with, this is bad news.
The reason companies are in for a struggle is the economy—and more. The world of business has been rocked during the past two-plus years with problems that include a pandemic, supply-chain disruptions, employee issues (as in the Great Resignation) and now the economy.
Here are two predictions from the report, followed by my commentary:
One in five CX programs will disappear—and one in 10 will be stronger than ever. Forrester estimates that 80% of companies have not made CX a part of their brand identity. These companies need proof that an investment into CX is necessary. If they can’t see the ROI in their investment, they will trim back or completely eliminate CX teams.
This is extremely shortsighted. Customers have been exposed to brands that provide some of the best customer service on the planet, such as Amazon, Chick-fil-A, Apple, Costco and others known for focusing on CX. Many people, whether they know it or not, compare any customer experience they have to the best service they have received from the aforementioned brands or others they admire. The company that pulls back on its CX investment, let alone eliminates it altogether, risks losing business and will end up playing catch-up with its competitors.
How important is CX? The 2022 Achieving Customer Amazement study (sponsored by Amazon) sheds light on how consumers react to poor customer service:
· 86% of customers surveyed are willing to switch brands or companies because of a bad customer service experience.
· 83% of customers surveyed are willing to switch brands or companies because they know another company will provide a better customer service experience.
· on average, customers will give a company fewer than three chances after receiving a bad customer service experience before moving to the competition.
But some other companies are recognizing that a downturn in the economy might be the perfect time to focus on their customers and strengthen their CX programs. Unfortunately, Forrester predicts that only one in 10 companies will make the investment to do so.
CX differentiation will erode in three-fourths of industries. The short summary of this prediction is that CX may become indistinguishable from one company to the next. In other words, the experience isn’t strong enough to differentiate from a competitor. The report states, “Lower-performing brands are solving basic CX problems, while top brands are struggling to embrace transformative CX improvements that ensure their differentiation. To stand out from this tightening pack, companies must embrace customer obsession and pursue CX innovations that differentiate their brand, rather than relying on CX strategies that consumers perceive as similar.” Customer obsession is about putting customers at the center of strategy and operations. According to Forrester, they grow revenue, profits, employee engagement and customer retention at twice the rate of others.
While customer loyalty is coveted, put that aside for the time being. Now is the time to focus on getting the customer to come back the next time they need what you sell. If each interaction is focused on the next time, every time, that could turn into customer loyalty.
The problem in tough economic times is that customers are more willing to switch companies for more reasons than usual. Their tolerance for a poor experience is low. And while a good customer experience makes price less relevant, tougher times make price a little more relevant than usual. A company must prove its value to its customers, and the best way to do that is to provide the customer experience they have always been used to—if not even better—one interaction at a time.
