The International Monetary Fund (IMF) revised South Africa’s economic growth outlook and predicted that it will be a depressed 0.1% for 2016, whilst it’s population growth rate currently stands at 1,7% annually. This means that the income per capita which is the average income earned per person in SA is likely to be highly contested because the economy ought to grow at least at the same rate as the rate of growth of our population. The contrary means that customers’ purchasing power for goods and services declines as a result. It also suggests a stagnant consumer, investment and business environment.
It is usually in a weak economic environment that companies tend to flirt with the idea of tightening their seat belts and that often means cutting costs. Similarly, customers become increasingly cautious of how and where they spend their money. A study by Insight Squared found that 86% of customers are willing to pay up to 25% more for a better customer experience. This strengthens the case that it is through customer experience that companies can leverage a sustained advantage from their competitors. However, what impact do cost-cutting measures have on customer experience and is there a way to cut costs without compromising key customer experience determinants such as price, product quality and delivery?
1.Don’t Surprise Your Customers
Have you ever left a rental car counter flabbergasted by the final price? Claimed on your car insurance only to be given countless stories of how your claim cannot be covered? Given up on finding a new mobile phone plan when the sheer number of options obscured the best choice? Checked your latest bank statement only to find an unexpected new fee? Fees and information that comes as a surprise to customers often leaves a bitter taste in the mouth of a customer, regardless of the service received. It also does not build a relationship based on trust and transparency between you and your customer. Therefore, clearly communicating the “fine print” with customers serves as a quick win in the customer journey and results in better retention and reduced churn. So if competition is tight and the environment is a difficult one, clear communication regarding product and service offering is a quick win and creates a sense of ease for a customer in their interaction with your offering.
2.Use Technology To Enhance Customer Experience, Not Recreate It
The process of conducting cost-cutting measures can be a complex tactic. Decision-making in achieving economies of scale thus becomes a challenging battle ground to win. However, in the 21st century not all is lost as the best thing after sliced bread is technology. Optimisation of the appropriate technology, superior mining and handling of big data techniques are key contributors to enhancing the customer experience journey without having to undertake sizeable and often costly changes. When done correctly, the end result becomes a customer journey that is seamless, meaningful and memorable enough for customers to want to come back and satisfied with the price of the good or service being purchased.
3.Fail Fast. Fail Forward.
It goes without saying that in an ever changing business environment more so an economy that experiences lagging growth, an important service characteristic is the ability of companies to fail fast and fail forward by quickly learning where shortfalls were previously experienced and work on improving them. This ought to be done with the objective of protecting the quality of customer experience that will be delivered. It is therefore increasingly important for companies to be vigilant and astute in understanding what effect and impact adjustments in business operations are likely to have on specific tough points of their customer journey. Better yet, if mistakes can be corrected in real-time of the customer journey, that serves as a superior service characteristic and a winning formula for a memorable journey in a difficult period.