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Efficiency to empathy: Customer experience in cost-of living crisis

Find out how businesses can shore up their CX strategy to support consumers struggling with the cost-of-living crisis

The cost-of-living crisis is already having a major impact on spending. UK retail sales decreased by 1.6% in August 2022 versus a 0.5% forecast; banks are withdrawing mortgage offers as interest rates are expected to rise by several more percentage points; and many people are left wondering how they will afford basics like heating and food as gas and product prices soar.

A recent survey of 2,000 shoppers from customer engagement software and services supplier Verint highlights the importance of customer experience (CX) for how businesses will fare during this downturn. After having an excellent customer experience, 88% of shoppers are likely to make a repeat purchase, while 82% are likely to recommend the brand to friends or family.

However, 62% of shoppers are unlikely to make a repeat purchase if a customer service issue isn’t resolved in a single attempt, while 57% cite the inability to communicate on their channel of choice as a reason for ditching that brand.

These findings are backed up by research from Zendesk, which shows that 66% of customers are less patient when dealing with businesses now than in previous years. For organisations of all sizes and industry sectors, investing in CX is vital to ensuring customer expectations are met in the short term, while protecting relationships for long-term business stability and growth.

“Consumers still expect the same consistent interaction and customer service from companies they interact with, yet businesses are failing to keep up with those expectations”
Eric Jorgensen, Zendesk

“The uncertain economic environment that we are operating in is placing increasing pressure on companies to do more with less,” says Eric Jorgensen, RVP, enterprise, EMEA at Zendesk. “Consumers still expect the same consistent interaction and customer service from companies they interact with, yet businesses are failing to keep up with those expectations.”

The current challenging economic conditions could well get worse later this year and into 2023 if interest rates and prices continue to rise. To brace themselves for rising customer support requests, CX technology investments need to be in place to enhance the experience for customers and the workforce, according to Bill Staikos, SVP, evangelist and head of community engagement at Medallia. Chatbots based on conversational artificial intelligence (AI) should form a core element of CX strategies, because they help lower call volumes into the contact centre and reduce operational costs, he says.

“For companies looking for efficiency gains in a down market, all while improving the experience, this can be a win-win solution,” says Staikos. “For consumers, it shortens the amount of time they spend to get to resolution. For example, a bank can train a chatbot to answer questions around inflation impact on market changes and investment portfolios. Or consumers can use conversational AI to ask for an increase on their credit limit, if needed.”

Commonwealth Bank of Australia One

Commonwealth Bank of Australia One (CBA) has already turned to AI to support its customers in financially difficult times.

As the twin calamities of Covid-19 and bushfires hit Australia in early 2020, CBA made use of Pegasystems’s Customer Decision Hub to improve customer resilience.

The bank created a library of personalised support messages for customers that nudged behaviour towards better financial wellbeing. Combining AI with a business-friendly rules engine ensures that all messages meet regulatory compliance and adhere to product eligibility and relevancy rules.

More than 270 different types of payment were included, and customers were matched to the right schemes and connected to over $480m in 2020.

Also, CBA used the same decisioning capability to deliver product messages that might help individuals and businesses, including deferring payments on loans and mortgages, reducing rates and fees, and accessing cash through secured and unsecured lending.

This model could be applied to other sectors: a telco ensuring a customer is on an affordable tariff if their risk of default is significant; or a utility company checking that customers know how to minimise their consumption of energy and are making use of grants to insulate their homes.

Avoid spamming

As customer expectations of a speedy and personalised experience grow, those companies sending out irrelevant messages have a greater chance of customers ignoring them or leaving completely, or failing the customer at a critical time. 

“Organisations must move away from the more structured, solely sales-focused, product-driven approach in favour of an agile and highly custom ‘always-on’ approach powered by centralised decisioning authority and real-time AI,” says Jo Allen, utilities customer experience expert at Pegasystems.

“They must put the customer at the centre, continuously analysing not just their data, but also their context across channels in order to recommend the best offers, actions and services – or what we call ‘next best action’ – for each individual customer based on their needs.”

This is especially true for the utilities sector in the current cost-of-living crisis, as consumers look for support in managing bill rises, finding alternative gas and electricity packages, and heating their homes this winter. Utility providers should be incorporating how to efficiently manage support from the government’s new energy bills discount plan into their CX strategies.

“Whether that is product messages that might help individuals and businesses or awareness messages that support customers in a time of economic crisis, they must ensure they do everything they can to help customers in the coming months, especially vulnerable, low-income customers,” says Allen, who was previously head of digital CX at British Gas.

“The key is to recognise the needs of each vulnerable individual and have the ability to handle them empathetically, understanding them on their own unique merits and providing solutions that make sense for them at the appropriate time.”

Virgin Atlantic

Virgin Atlantic has already undergone huge changes to its customer experience offering in response to the Covid pandemic, which sets the firm in good stead to deal with ongoing cost-of-living issues.

In 2021, the firm’s customer support hub in Swansea transferred more than 100,000 open flight tickets and received 384,000 inbound messages through digital channels such as WhatsApp, SMS and Facebook. At the time, they all ran on separate products, which meant agents had to be trained in different tools and did not have a global customer view.

“During the pandemic the contact centre was flooded with customers looking for reassurance or to discuss refunds and rebookings, and with disparate technology being used by many agents working from home, handling time almost doubled,” says Ceri Davies, customer centre manager at Virgin Atlantic.

The company wanted to improve the situation for customers and employees with the objective of delivering consistently excellent service, whatever the channel, and so consolidated its airline and holiday service operations on Genesys Cloud CX. With this technology platform in place, agents no longer have to navigate multiple screens, and instead manage everything – calls, emails, messages, social posts, outbound campaigns and payments – from a single unified desktop. This is supported by AI-powered chatbots offering self-service to customers, and escalation to an agent only happens if needed. 

Virgin Atlantic now has shorter, controllable queues and reduced system costs. The business has seen a 40% reduction in open tickets, 20% new bookings within three months, and 30% of all social media contacts resolved via self-service.

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As the world has opened up again post-pandemic, people have rediscovered their appetite for travel, and Virgin Atlantic doesn’t expect this to change regardless of the economic slowdown. However, as life is not as predictable as it used to be, the firm has experienced an increase in rebookings.

In the past, a cumbersome rebooking process required customers to fill in a web form, which went to the Virgin Atlantic pricing team to cost and send a text. If the customer wanted to go ahead, they would have to get back in touch. Using Genesys Web Messaging, the first point of contact is a chatbot, and a specialist captures and actions everything in one go.

“We’ve also aligned our rebooking service to opening hours, which we couldn’t do with the web form,” says Davies. “This simple change cut calls relating to rebooking queries by 4% in the first seven days. Moving forward, we plan to develop the AI capabilities of the chatbot, which will further reduce the need for agent assistance.”

While the economic situation could lead to a further rise in rebookings, Virgin Atlantic is already focused on supporting the more exacting demands of digital-first consumers. Using technology such as AI enables the business to quickly understand customer needs, provide them with the right information and see all of a customer’s interactions.

“With big ticket purchases like a family holiday, these expectations are even higher,” says Davies. “Therefore, when a customer first connects with Virgin Atlantic, the experience needs to be perfect, whatever the channel.

“If they need to rebook or get a refund, this needs to be straightforward. Our customer experience needs to be amazing to ensure brand loyalty in the current economic climate.”

Virgin Atlantic is by no means the only company seeing a shift in the nature of customer contacts. The cost-of-living crisis is already driving up contact volume and businesses are seeing huge levels of churn as customers seek support with payments or better deals, according to the latest Evolution of the contact centre report from the Call Centre Management Association.

More intricate conversations

As conversations change from basic queries on bookings or returns to discussions on cost-cutting, the intricacy of conversations goes up, says Adrian Benić, chief product officer at Infobip.

“The cost-of-living crisis has set a gloomy tone for consumers,” he says. “Consumers are still engaging, but the determining fact will be the quality of these engagements and the flexibility brands may offer.

“While consumers tighten their pockets, it’s difficult for brands to navigate supporting customers who may not be as keen on purchasing as they were before. The current situation demands a shift in their approach to customer experience – they’ll have to express empathy to customers.”

For those businesses that don’t have the internal resources to offer a more empathetic, personalised customer experience, outsourcing customer service is an option.

During the Covid pandemic, Infobip built a customised CX strategy for Italian optician chain Salmoiraghi & Viganò, including contact via WhatsApp and via an AI chatbot. Previously, the optician’s virtual services were handled via email and an outsourced call centre, and it relied on in-person care and servicing to maintain customer relationships – no longer an option once it was hit with hundreds of store closures.

“Investing in the best customer experience provides greater stability during downturns, and helps companies reap greater returns once an economy improves”
EJ Cay, Genesys

The updated CX strategy resulted in a customer satisfaction score of 100%, while only 30-40% of WhatsApp queries were transferred to agents – the chatbot was able to resolve most issues. 

As the economic turbulence continues, the traditional yardsticks used to measure CX – efficiency and effectiveness – will increasingly be overtaken by empathy. According to a recent survey from Genesys, 69% of UK consumers want brands to act with empathy when dealing with them.

EJ Cay, vice-president UKI at Genesys, says that to boost customer satisfaction in respect of empathy, CX leaders need to focus on the engagement and satisfaction of their own employees.

“Finding and retaining staff with the right skills and mindset to provide empathetic experiences is no easy feat, but we expect it to become a priority for many businesses as the threat of recession in the UK looms large,” says Cay.

And while the natural inclination for many businesses during a recession is to focus on growth and controlling costs, this should not be to the detriment of building and maintaining great customer loyalty. “Investing in the best customer experience provides greater stability during downturns, and helps companies reap greater returns once an economy improves,” adds Cay.

As people have progressed from dealing with Covid and product shortages to struggling to survive the cost-of-living crisis, companies are having to deal with customers who are increasingly anxious and potentially less loyal. Consumers are less willing or able to be patient, and expect an immediate and appropriate response to their situation.

Companies that react to this economic downturn by investing in their CX strategy will come out on the other side with a cohort of loyal, satisfied customers.

Read more on Customer relationship management (CRM)

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