The Post-Recession Customer
For the rest of the July 2009 issue of CRM magazine, please click here.
Any attempt to divine the future in the midst of this economic environment—a no-visibility recession that may well be a depression—may seem outrageous, or at least out of line. But I recently received a request from a global corporation to address the post-recession customer experience. The smart companies, to the degree that they have control, refuse to sit around and wait. They’re plotting strategies to prepare for when the skies clear. They’re being proactive. [Editors' Note: For more, see CRM's special February 2009 edition, The Recession Issue.]
The recession’s impact on customer experience is not going to fade quickly. (See my previous column, “Is Customer Experience Relevant in a Recession?,” April 2009.) Certain financial and emotional issues will endure for many years to come. Our future customer, the one who experienced 2009, will continue to live with residual uncertainty. The threat of unemployment and of a questionable financial future may ease but will most likely stay in his consciousness. The desire to realize increased value is also there to stay.
Customers will demand greater value for their money and will scrutinize their relationships with vendors to ensure they get the best deal. Trust is another element of the relationship that will be reshaped in the wake of this economic period. Customers will be far more selective about extending their loyalty.
Uncertainty and fear, combined with demand for great value and selective loyalty, may seem like a perfect storm. Many organizations are hoping those factors are temporary, easing in lockstep with receding unemployment. Such hopes are risky, supported by little empirical evidence. The more-responsible assumption is that these customer conditions are here to stay, and that we need to adapt our products, services, business models, pricing approach, and overall definition of value accordingly.
Hyundai, for example, recently launched a payment-protection program: Car buyers who found themselves unemployed would have their car payments waived for up to three months, and after that could return the car without any penalty to their credit ratings. The campaign—which was quickly matched by several competitors—was brilliant for one simple reason: The company demonstrated an agility to adapt to customer issues and emotions. Is this a temporary fix, or a new way of doing business? Hyundai would be wise to make the policy permanent, as an indication of its commitment.
The current economy is forcing many companies to find new ways to do business. Some are unbundling their products and services in order to offer customers price concessions. They’re pursuing innovation in their business models and reinventing their services. A customer who grows accustomed to that level of quality will not forgo those new ways of doing business just because the economic conditions improve.
As the saying goes, everything changes, and nothing does. Just as the customer experience was critical to business survival before the recession, it’s going to play a crucial role in business survival post-recession. The mediocre companies that did not care about their customers’ experience will be subject to a greater scrutiny from the skeptical customers.
Making predictions about the post-recession customer should not be difficult, provided we let go of the illusion that everything will revert to the way things used to be. Customers’ emotional—and therefore financial—state of mind will be permanently impacted. As a result, we need to permanently alter our ways of doing business and innovate the customer experience. In other words, changes that are made to accommodate the recession should be designed with an eye toward the post-recession era.
The future is very uncertain, but this much is clear: Companies will need to develop and deliver greater value, a more complete experience, and deeper emotional engagement. Customers will demand it, and they’ll penalize harshly those vendors unable or unwilling to deliver it. We better be ready for it.
Lior Arussy (firstname.lastname@example.org) is the founder and president of Strativity Group (www.strativity.com). He is the author of several books, including Excellence Every Day (Information Today, Inc., 2008), his most recent, an excerpt of which appeared in CRM’s May 2008 issue. To learn more about customer strategies, sign up for his newsletter at Strativity Group's homepage.
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.
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