In times of economic downturn, customer service is even more critical for business growth
- With economic uncertainty breeding business caution, Zendesk's Andrew Lawson outlines five challenges ahead where customer service can take action to drive growth.
Uncertainty in any situation can lead to fear and the type of ‘doom and gloom’ headlines we’ve seen in the news for many months. Some outlets claim the impending global recession is inevitable in 2023, while other organizations beg to differ.
Regardless, there’s reason for caution within the business landscape and it can be hard to know how to proceed — where to spend and where to cut back. We may decide to hold off on planned investments and bide our time, taking a wait-and-see approach. Or, we may take this moment as an opportunity to examine team operations and expenditures, to actively look for ways to find greater efficiencies or increase value and impact.
In customer service, this economic climate can serve as a helpful constraint. While it’s possible to sink endless resources into bettering the customer experience, whether through headcount or additional technology, sometimes it’s more about changing the paradigm. If you take action now, you’ll be more prepared for what may come and may also stand to come out ahead.
Meet rising customer expectations
While the economy may fluctuate, customer expectations continue to rise. Our CX Trends 2022 research found that more than 60% of customers say they now have higher customer service standards than before. Customer engagement was up 14% compared to 2021, translating into higher volume — and also more opportunities to connect and build relationships with customers.
And this matters. Our subsequent CX Accelerator 2022 report underscored the importance of a support team’s ability to retain (and to cross- or up-sell to) customers. As many as 64% of companies say that customer service has a direct impact on their bottom line.
We also know that there’s massive potential in how AI and automation can better serve customers across all service interactions and that it’s crucial to find the right balance between personalized human and automated service.
5 challenges ahead, and what you can do now
Some leaders will face tough budgeting decisions in 2023 and others will have those decisions passed down. Either way, we’ll all be tasked with making it work for our customers. Let’s take a look at how to best handling those challenges:
1. Cut operational costs and prioritize spending
You may be asked to trim your budget and/or to slow down — or freeze entirely — spending and hiring. So, if you haven’t heavily invested in self-service options, now may be the time to do so. A robust knowledge base and community forums, with bots built into workflows, can help customers help themselves. On the flip side, these investments, along with time-saving workflows and automations, help eliminate low-value tasks for agents and can deflect inbound interactions.
As an example, Unity, one of the world’s leading platforms for interaction and real-time 3D content, needed to scale support without additional headcount when its growth ballooned between 2019 and 2020.
Unity’s support team decided to invest in automations and self-service options to deflect overall ticket volume, reduce handle time, and to build in time-saving workflows across the team. This included use of Answer Bot. In 2021, Unity deflected nearly 8,000 support tickets as a result of this investment, amounting to $1.3 million in savings.
2. Slow spending and hiring
If headcount remains flat or even is reduced for the coming year, automations move from 'nice to have' to critical status. Related to the challenge above, the more you can lean on chatbots and self-service pages, the better. And if you can’t spend on people power, it might be the right time to ensure that your tools are extensible and connected to your wider tech stack, so that you can still deliver personalised and customised service at scale.
International beauty retailer Lush is a great example of a brand that recognised, back in 2016, that it needed to standardize its business processes and digital offerings. Rather than simply scaling up staffing over the holiday season, the company re-platformed its website. By making these strategic changes early, Lush set itself up to scale capacity and realized a 50% increase in productivity and saved $208,387 in cost efficiency. Customer satisfaction scores improved as well, even with a 60% increase in tickets during the pandemic.
3. Grow your contribution to your business’s revenue
When companies face threats of recession, they may begin to look beyond traditional revenue-generating teams for new opportunities to influence the bottom line. A good customer experience can lead to growth, especially when agents are equipped with contextual information about a customer’s sales and service history — and the easiest and shortest connection is often through digital channels. But it’s not just about supporting digital channels so much as bringing these channels into a unified view or workplace.
By now, Spartan Race is a world-renowned brand promoting fitness and endurance in the face of obstacles. But when the pandemic hit in 2020, Spartan Race was forced to reduce headcount and lacked the number of agents necessary to keep up with the volume on live chat. The company upgraded to Zendesk Suite to offer omnichannel support across an array of channels, along with a Shopify integration. This led to a 27% increase in sales. Plus, Spartan Race has increased self-service by 46% and help center views by 40%, effectively keeping operational costs down and customer satisfaction up.
4. Leverage your service team for ‘inside’ sales
You’re in a good position if you can begin to pivot your service towards cross- and up-sell opportunities. With access to historical customer data and shared metrics via a unified agent workspace, plus ease of collaboration with internal teams through integrated messaging tools, agents can truly get a complete view of the customer and respond in the right moment with the right message.
Dublin-based and online jewelry company Chupi specializes in solid gold heirloom pieces and a VIP customer experience. The company invested in Zendesk at the onset of the global lockdowns in 2020 to help new employees onboard remotely and quickly adapt to the platform. As the team got to know Zendesk, they turned on new features to meet new trends. For example, live chat became the primary channel to manage one-touch queries, quickly earning the team a 98.6% CSAT rating.
Yet beyond chat, all calls, email tickets, and social DMs also funnel into Zendesk so that agents can see a customer’s complete history. In time, Chupi realized it could provide consistent, personalized service by 'selling quietly and with kindness.' On the back-end, this might mean escalating a ticket in Zendesk and booking a virtual jewelry consultation where customers have the opportunity to see individual pieces and follow up with a post-consultation package. And, in fact, these sessions resulted in a 65% conversion rate. In 2020, Chupi had a 300% increase in care-based sales, resulting in one million euro in sales directly from the company’s customer care team.
5. Retain loyal (or potentially loyal) customers
This last challenge may be the most difficult. Customer retention is never easy when there are so many options in the market — and when, from the consumer’s point of view, a faux paus is almost unforgivable.
This economic climate presents an opportunity to lean into the customers you have. It’s absolutely vital that customer service meets expectations in every interaction — and it’s time to double-down on providing the most personalized service possible. It’s vital to make data-driven decisions and to share customer feedback and data across the organization via flexible platform integrations.
As a case in point, The Boston Globe, winner of 27 Pulitzers and a New England institution, has kept readers informed for more than 150 years, since the paper was sold by newsies for less than a nickel. These days, most Globe subscribers get their news on smartphones and have come to expect a 24/7 digital experience.
To better serve subscribers, the Globe’s CX team implemented Ada, an AI chatbot integrated with Zendesk, to help transform the customer experience. Since its launch, the Globe has experienced a 10% reduction in churn. And, with the new platform, 89% of chatbot queries never escalate to an agent, resulting in a 65% reduction in live chat volume. Agents are now free to answer more complex queries quickly, offering the kind of experience that makes for life-long customers.
Take it one step at a time
We’re inspired by the success stories our customers have shared, and we hope they help illustrate what’s possible.
It’s no small job to manage uncertainty, adapt to change, and build resiliency within your team. We all have to be vigilant with our resources — our people, budget, and time — without sacrificing the customer experience. Constraint and creativity often walk hand-in-hand, and we know there are exciting strides ahead.
For more customer stories, or to learn more about actions you can take, download our ebook or visit zendesk.com/ROI.