When the coronavirus pandemic eventually subsides and the economy begins to recover, many businesses can expect significant challenges rebuilding relationships with customers whose mindsets, priorities, buying habits and spending powers have been significantly altered during this period of social isolation. Nothing is going back to the way it was.
Even when many of the current social distancing restrictions are lifted, consumer attitudes and behavior are not likely to return to where they were prior to the crisis until there is a vaccine or some other proven treatment for the virus. The fear of an aftershock in the fall is also likely to temper any expected pent-up demand on the part of consumers.
Given these risks, businesses across industries, from hospitality to banking to technology, should have a plan to enhance their customer experience, as well as their customer-focused strategies coming out of the crisis. The following are considerations businesses should be actively exploring and managing where possible.
Product and Service Demand
Businesses should evaluate how demand for their products and services will continue to evolve over the long term. For example, cruise line sales may take a longer time to recover. On the other hand, firms that sell recreational vehicles may experience an increase in demand. Gym memberships may decline, while demand for in-home online fitness options such as Peloton may increase. As part of evaluating consumer demand, businesses should pay close attention to these key issues:
- Reputation – During this crisis period, businesses face significant reputational risk stemming from their dealings with consumers. For example, with the passing of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program (PPP), the reputational issues may be particularly challenging for financial institutions. The actions and communications businesses take during this crisis can make or break their reputation and will likely create long-lasting perceptions in the minds of consumers. Questions likely to shape consumer perceptions include: How did you treat your employees during this time? How did you treat me? Did you give back to the community during this time?
- Consumer spending power – Whether or not customers (including B2B customers) have taken a financial hit, they may have less to spend even though they may still want or need your product/service. Implementing creative payment structures, financing options or the ability to have a free trial period can help to address this. This issue should also be a consideration when developing marketing and product strategies that help establish your products or services as necessary as opposed to nice to have.
- Employee engagement – Customer experience is only as good as the people who are delivering it. Even if the business did not take actions that negatively impacted employees and their morale during the crisis, it is important to recognize that outside factors may have impacted employees’ wellbeing and that their values may have changed. In some cases, post-crisis employees may not be as committed or enthusiastic when serving customers as they were beforehand.
Six Future-Proofing Actions to Take Now
There are a number of actions that businesses can take to prepare for the anticipated changes in consumer behavior. Following are six recommendations to consider now:
- Customer lists and engagement – If you don’t currently have a customer list or an app, now is a good time to increase efforts in this area. Knowing who your customers are will be key to re-engaging with them effectively and efficiently. Thoughtful engagement, personalization and building relationships with customers beyond the services you provide can contribute to lasting, loyal customer relationships.
- Digital strategy and digital commerce – These are powerful tools to engage with customers and to conduct commerce. Even businesses with strong digital presence and e-commerce capabilities should revisit whether more can be done to engage customers and enhance the online experience and whether there are other products and services that could be offered online. Some examples might be creating a subscription service (e.g., coffee subscription), enhancing the ability to do online ordering, adding online personal services that fit with the products you offer, etc.
- Decentralized customer support – Even before the advent of COVID-19 a number of companies had implemented virtual onshore call centers with workers working from home, with benefits such as flexible hours for both employees and customers and reduced physical infrastructure costs. This approach, which many companies may have implemented on an emergency basis now, can not only protect against future disruptions but be can also be responsive to changed customer expectations.
- Mission and values – As mentioned earlier, this crisis has the potential to have a significant impact on a business’s reputation based on its response to the evolving situation. Post-crisis, consumers will likely have different expectations of companies and reward those who stand for something more than just selling cars, booking hotel rooms or providing banking services. Consumers will likely care more about how the business treated them and its employees, and how the company contributed to society during this trying period as well as its commitment to environmental, social and governance (ESG) matters. Revisiting your mission and vision can help to create greater emphasis around what you stand for that will resonate with both customers and employees.
- CX measurement and management approach – Often, customer experience surveys are more about the business than about the customers.. Whatever your closed loop efforts are today, consider expanding them, even if it is just to send a thank you note to every customer who participates. Consider adding a question or two that ask about their needs and concerns or whether they think you are being a good citizen during these times.
- Define customer value – Use analytics to understand the value of your customers. For many businesses the disruption to their customer base has been fairly dramatic. Those best equipped to recover from the shock have a strong understanding of the value of their customers, in segments and individually. This value is measured not just in terms of revenue or profitability in the past year but in terms of lifetime customer value (LTV).
Although the loss of customers and revenue at this time may seem crippling, the crisis will eventually recede and new business realities will emerge. How well companies rebound in the new normal, including their ability to restore and grow their customer base, will be defined by the thoughtful, compassionate and forward-looking actions they demonstrate today and the new strategies you put in place to better future-proof your business.
The shutdown has upset many businesses, and people have lost confidence in general. It is necessary to revive small businesses to keep the economy moving. Future-proofing is a good idea, and I feel moving forward business should focus on this to keep customers and businesses alive. Interesting thoughts and thanks for sharing.