Every recession is unique, but at the same time, every downturn results in the same outcome: some companies emerge winners, while others fall under the guillotine of a lagging economy. With even Wal-Mart’s growth flat-lining, many CEOs are wondering if they can do anything besides frantically cut costs and grit their teeth through this jobless recovery. Unfortunately, customer engagement program budgets are often among the first to fall under the knife as companies make cuts to stay afloat during tough times. Savvy company leaders know that slashing budgets without maintaining a strong customer engagement strategy can send loyal customers fleeing to competitors. In this article, we’ll focus on how Voice of the Customer programs can help companies identify crucial trends and develop successful tactics to see them through the most difficult economic times. By preserving and extending your Customer Engagement program throughout the recession, companies can survive the downturn and be in a good position to thrive once the upturn takes hold.
Simply cutting budgets willy-nilly won’t help companies survive. As an example, consider a recent MSNBC article about Hertz rental cars. In January, Hertz laid off 4,000 people in an effort to cut costs. The effect? Customers are finding it increasingly inconvenient to return Hertz’s cars, since there aren’t as many employees on hand to conduct instant returns. The MSNBC article mentions one loyal Hertz customer, Richard Garber, a business development manager who travels on business 20 to 40 times per year. The dearth of Hertz employees has Garber considering switching brands. “When you’re rushing for an airplane, every minute counts,” he explains. “The less convenient they are, the more likely I am to try someone else.” Clearly, a focus on cost cutting outweighed Hertz’ Customer Engagement strategy.
Customer-friendly budget trimming can be accomplished by adopting the same tactic investors use during economic doldrums: a flight to quality. During recessions, investors often shift their funds to more stable, long-term, high-quality stocks. Companies can follow suit by prioritizing their long-term, loyal customers. Rather than spending gobs of money trying to attract new customers, companies can focus on wowing current customers through a strong Customer Engagement strategy. As we’ve discussed before, long-term customers are invaluable to any firm both for their ongoing business and because they bring in new customers via word-of-mouth. And the chain of good business karma just keeps going: when customers find a company via a personal recommendation, they are more inclined to be engaged. Moreover, recommended customers are more forgiving of service slip-ups. To survive the economic downturn, cut costs while preserving and even improving a Customer Engagement program that will keep your most loyal customers raving.
Here are a few ways you can use Voice of the Customer and Voice of the Employee programs to create a strong Customer Engagement strategy that will keep your company thriving in spite of the ups and downs of the economy.
Know your customers. Consistent customer research might have clued Hertz into the fact that quick rental return is a high priority among their loyal customers. Include ongoing customer feedback in your Customer Engagement program. This will allow you to understand what’s most important to your customers, so that you can ensure those aspects of the customer experience stay in place during the downturn. Quick “check-in” surveys can provide priceless data on what customers want. Once you know what your customers need, you can seek out economical fixes—such as cheaper technology or different staff procedures—to cut costs while protecting the customer experience.
Engage Employees to Engage Customers. One piece of advice from the MSNBC article mentioned above is that company leaders should aim to “Get more out of people you have on staff.” However, squeezing an already under-engaged workforce for more will only create cynicism and exhaustion, both of which you should be protecting your customers from. Just as you need to engage customers in an ongoing conversation via a Voice of the Customer program, it’s important to understand your employees through a Voice of the Employee program. By regularly interviewing employees, you can better understand how to maximize your workforce while preserving Employee Engagement. Remember, happy employees make happy customers. Plus, front-line employees often have brilliant ideas on how to engage customers—meaning you’ll have even more ideas about how to keep your best customers around through the tough times. Bottom line: Employee Engagement is a key ingredient in any successful Customer Engagement strategy.
Focus on Preserving and Increasing Customer Engagement. As we’ve discussed previously, Customer Engagement is the new competitive advantage. Customers are also exhibiting a flight to quality. They have less discretionary income, and they are more focused than ever on their spending. Both B2B and B2C customers are choosing how they spend their money more carefully. Once customers know what they want, price and product are easy enough to source—it’s the customer experience that is the distinguishing factor these days. Customers are looking for a unique, compelling experience. By gauging and improving Customer Engagement, you’ll be putting the customer experience at the heart of your business—right where it belongs.
As Sam Walton famously pointed out, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” By understanding your customer base, maintaining an ongoing conversation with employees, and building a strong Customer Engagement program, you can ensure that the customer-boss will help your company survive the recession and thrive in the upturn.