Read a blog by Phil Sager, Expert Partner and Daniel Moellerhenn, Expert Partner, Bain & Company, speakers at the XI Forum in Cologne on June 13 & 14
Reports of record inflation, ongoing labor constraints, rising capital costs, and other macro trends are ongoing and have compounded in unique ways. As in previous cycles of historical uncertainty and downturns, these increased headwinds across the globe mean customers and companies are behaving differently.
We’ll explore below how to prioritize customers and strategically use customer experience tools to drive growth for your business and keep on course.
Understand the Landscape
As outlined in Bain’s The New Recession Playbook, a successful approach to strategy during a downturn requires businesses to:
- Have a realistic assessment of your company’s starting point. Establish a clear understanding of your current strategic position and financial strength in relation to your peers and competitors. From this viewpoint, you can more easily strategize and weigh the types of risks your company can handle.
- Be aware that, historically, downturns provide an opportunity for more dramatic gains and losses. In this moment, it’s vital to follow a decisive strategy, as the consequences will have long-term impacts on your business, talent, and customers. Those with a successful approach can end up stronger than before the downturn.
Take a Human-Centric Approach
How does recession strategy talk translate into CX planning and approach?
Customer experts Phil Sager and Daniel Möllerhenn suggest strategically doubling down on customers & employees. You can strengthen your experience management efforts by understanding your customer segments and taking special action to better serve those populations.
In one segmentation use case, a major Retailer Co leveraged existing capabilities and assigned unique Guest IDs to consistently collect detailed data on customers. They were then able to provide specific coupons and product suggestions, even leveraging life events (i.e. expecting parents, new college students) to provide an ecosystem of products at specific points in those customer journeys.
In another example, a major Asia-Pacific Telecom Co utilized segmentation to align their growth strategy with changing customer needs and, as a result, exceeded revenue goals and cemented their leadership in the industry.
From a recent survey of CX leaders conducted at Bain, we learned that while 61% of respondents have existing segmentation that drives action toward different customer segments, the majority of those same leaders do not use segmentation data strategically to buffer the negative impacts of budget cuts. In less-turbulent times, segmentation provides potential opportunity for growth, but in today’s challenging climate, it’s a necessity to strengthen your position and better connect with your customers.
How can you make better trade-offs using segmentation?
Strategic Use of Customer Segmentation
This demonstrates an important opportunity to strategically use customer segmentation to make informed trade-offs, especially in challenging times, to buffer budget cuts, potential downsizing, and other factors outside of the control of CX teams.
Segmentation will help you zero in on the best ways to provide for and delight your customers and with a tailored approach, lean into specific areas to drive customer retention and customer loyalty to weather the storm, earning growth in the short and long term for your business.
Our experts have compiled actionable ideas below to help companies prioritize customers and strengthen their customer experience strategy:
Provide For Your Customers
Where can you deliver a stellar customer journey point?
- Offer unique services on top of products that service the customer’s greater overall need
- Remove junk / nuisance fees from the equation
- Understand the emotions of your customers and build responses in kind
Inspire Your Teams
Invest in a culture that empowers teams to continuously improve and work toward a common purpose.
- Equip your front line employees and customer service representatives (CSRs) with proper product, procedures, and communication for supporting customers in challenging situations
- Deepen their customer connections / distil a clearer voice of the customer
- Invest in your current employees to create future leaders
- If applicable, clarify expectations around hybrid / work-from-home (WFH) models
Activate Your Promoters
Their customer value increases exponentially over time.
- Find the right implementation of referral programs to reward promoters and grow your base
- Provide loyalty programs that enhance customer experiences in a meaningful way
- Improve communications with customers – timely responses over preferred service channels
Your Customer Experience Strategy Going Forward
In conclusion, navigating turbulent times requires a human-centric approach that prioritizes customers and employees. Customer segmentation is an effective tool for understanding customer needs and taking action to better serve specific segments. By leveraging segmentation, companies can make informed trade-offs, buffer budget cuts, and drive growth in the short and long term. To strengthen their customer experience strategy, companies should focus on providing stellar customer journeys, inspiring their teams, and activating their promoters. By adopting these strategies, CX leaders can steer their businesses through challenging times and emerge stronger on the other side.