Don’t Let Tariffs Sabotage Customer Service

Let’s face it, market volatility is here to stay while companies and countries negotiate with the Trump administration to reach a deal on tariffs. In the meantime, stock market turmoil, sourcing concerns, potentially higher production costs, supply chain disruption, and far more will threaten companies and leave the U.S. economy in a state of flux.

Businesses don’t have much control over domestic or global economic politics. But that doesn’t mean that they are powerless. There’s plenty that they can do to address the crisis and even thrive during it. In one of our Insight stories this month (“Advice for B2B Firms in Volatile Economic Times”), Forrester Research gives companies advice for handling the uncertainty.

“It will be challenging to resist reactive decisions (e.g., cost-cutting) that are likely to disrupt the delicate balance between short-term and sustainable, long-term growth. Successful leaders will stay focused on creating buyer value through revenue process transformation,” the firm advises. “It’s time to improve focus, optimize resources, commit to deliberate change leadership, and embrace enterprise risk management.”

During tough economic times, companies cut budgets, scale back operations, consolidate resources, and even lay off personnel. During the current crisis, though, these steps are likely overkill. Massive layoffs and drastic disruptions could be dangerous at this time because conditions might not be as bad or last as long as expected, and it will be difficult to bring people and operations back quickly when the crisis is over.

Most business experts agree on one basic principle: transparency. As companies face difficult decisions about fluctuating costs, it will be crucial for them to be transparent with customers about pricing changes. This is particularly important for companies that plan to pass tariff costs on to consumers.

Of course, no consumer likes to see prices rise, but consumers are more likely to accept higher prices if they feel that they’re getting some sort of value. Experts, therefore, are encouraging companies to alter their pricing strategies with bundles, premium options, subscription models that make cost increases less noticeable, and loyalty programs that offer consumers special perks or discounts for repeat purchases.

Companies need to prepare their marketing, sales, and customer service and support teams to deal with the changes. Sales reps need to be equipped with the most recent pricing data and must be trained to handle customer objections to higher prices.

Smart marketers will need to do everything in their power to stay ahead of shifts in customer expectations and prevailing economic realities rather than scrambling to react to them. One good starting point is smarter audience segmentation to help drill into the most valuable customer demographics and to avoid the riskier ones who are less likely to buy.

Companies can also turn to cheaper, simpler marketing channels. Less expensive advertising options might include email, social media, direct mail, out-of-home platforms like billboards and in-store displays, experiential and live events, influencers, user-generated content, customer reviews, word of mouth, and third-party endorsements. Even old-school print campaigns might yield results at a lower cost.

Many experts argue that the current economic situation might be only temporary, and rather than looking at it as a crisis, it’s better to look at it as an opportunity. Rather than taking drastic measures, seize the moment to rethink strategies, optimize spending, streamline operations, explore new channels, markets, and geographies, and strengthen existing customer relationships. And don’t use it as an excuse to cut back on customer experiences.

Most of the attention during the current crisis is on supply chains and pricing, but the ripple effect hits customer service first. Confused and frustrated customers are likely to find their way to companies’ contact centers, and teams will need to be ready for the surge.

Mario Matulich, president of Customer Management Practice (CMP), is convinced that they’re up for the challenge:

“We’ve been through this before. Whether it was the pandemic or previous financial downturns, the companies that stayed focused on the customer came out stronger,” he says. “This is when customer experience matters most. CX leaders are the unsung heroes of every crisis. And they’re going to be the ones who carry us through this moment, too.”

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

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