Don’t Let Fear Deter CX Investments in 2025

A new U.S. presidential administration is taking shape, and consumer sentiment is on the rise. A new MFour Studio consumer survey found that 44 percent are feeling optimistic about the overall state of the economy in the new year, 59 percent expect their financial situations to improve this year, 37 percent expect to spend the same on necessities, and 36 percent anticipate spending more on non-essentials.

Companies, though, are still being cautious with their budgets. Lingering concerns about economic stability in this country have been worsened by the recent devastating wildfires in Los Angeles, a crippling national debt, stubborn inflation and high prices, high interest rates, political upheavals in other countries, ongoing trade imbalances and the threat of tariffs, plans to massively cut government spending, escalating geopolitical rivalries, and many other real or perceived threats.

Amid all of this uncertainty, many companies this year are looking to slash their operating budgets. Unfortunately, when companies scale back expenses, customer experience operations are often among the first on the chopping block. This can have dire consequences, not just on the bottom line but, more important, on customer retention and brand loyalty. It is incumbent on businesses to move forward with resilient, efficient operations that will get them through the rough times ahead while maintaining high-quality customer service and support; effective marketing outreach to as many prospects as possible; and sales efforts that increase revenue, market share, and competitive advantage. It is indeed possible to reduce operational complexity and overhead without compromising CX quality. It is indeed possible to work with leaner teams, jumping on technology and automation solutions that increase efficiency while preserving the human touch that customers still expect.

Artificial intelligence is key to that, and many companies are on the fast track when it comes to AI adoption. They also have big plans and expectations for AI, as the dozens of predictions we received this year from CRM industry insiders indicated. 

Many of this year’s predictions indicated that AI is moving out of the hype cycle and into real-world applications, with concrete results already being seen. A day of reckoning also awaits companies that have waited to explore AI’s advantages.

Nikola Mrksic, CEO and cofounder of PolyAI, summed it up perfectly: “As we move into 2025, we’ll start to see major differences between those who have adopted AI early and those who are still in wait-to-see mode. Early adopters will have demonstrated or begin to show measurable advantages, like faster product development cycles, more efficient operations, enhanced decision-making capabilities, and improved customer experiences. The holdouts, on the other hand, will face mounting challenges as they attempt to contend with AI-enhanced competitors.”

Sure AI costs money, but the costs of doing nothing, or even worse, slashing CX budgets, are far worse. Study after study has demonstrated that the vast majority of consumers are likely to abandon companies after just one bad customer experience, while investing in CX often uncovers opportunities to streamline processes, reducing long-term costs. Companies that prioritize CX are 60 percent more profitable, according to Deloitte.

A reduced focus on CX, on the other hand, often results in a lack of awareness of evolving customer needs, hindering innovation and the ability to respond to emerging market shifts; lower employee morale, resulting in burnout and retention issues; and a host of other problems that aren’t as easy to fix once budgets rebound.

History has shown that companies that prioritize CX during economic downturns position themselves for accelerated growth once the market rebounds.

In short, CX should not be viewed as an expense or a line item that can be slashed but rather as an investment in the future. Prioritizing CX investments might seem counterintuitive during economic uncertainty, but it’s the most strategically sound decision companies can make to guarantee growth and sustainability over the long term.

Leonard Klie is the editor of CRM magazine. He can be reached at lklie@infotoday.com.

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