Why is it time to strengthen the customer experience?

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The noise surrounding the current inflation surge in the United States and its comparison to that of the 1970s is reaching a crescendo. More worrying, however, is how this could translate into companies taking the short-sighted route of taking customer experience (CX) shortcuts to save money.

Contrary to customer fears of cutting spending, McKinsey research shows that in the first few months of 2022, shoppers in the United States continued to spend amid high inflation. Even though inflation reached nearly 8.5%, customers spent 18% more in March 2022 than two years earlier. Remarkably, that was 12% more than consumers were expected to spend based on pre-COVID models.

As history tells us, CX leaders have tended to show their courage during crises and recessions. We don't need to go back any further than 2008 to remember how CX leaders responded to this financial crisis, bouncing back vigorously and recording a three times higher growth rate over the long term.

Value and trust are at the forefront

Value is an integral part of the customer experience, especially in an inflationary situation where consumers are likely to think twice before loosening their purse strings. Show them value, create the right experience, and businesses stand a chance of earning more spending dollars from their consumers. PwC claims that the price premium of an excellent customer experience can be as high as 16% on products and services. Not to mention the positive impact on loyalty.

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In a tough economic landscape, trust is a particularly important commodity for consumers. PwC's 2022 Consumer Intelligence Series trust survey highlights that trust is the new currency for businesses. The survey reveals that 91% of customers would buy from a company that has earned their trust. Unsurprisingly, 71% would buy less if a brand lost their trust. Interestingly, although 87% of executives believe consumers place a lot of trust in them, only 30% of consumers say this is the case.

How can brands improve trust, especially when there is pressure to cut costs?

Leverage hyper-personalization to build customer trust and loyalty

When an international hotel chain saw a decline in guest interest in its flagship marketing program, it realized it was time to abandon its demographic-based customer segmentation program. What followed was the creation of a metrics and data-driven hyper-personalization framework that tailored offers based on individual preferences, generating over $450 million in incremental revenue.

When consumers...