Consumer Behaviors & Attitudes Towards Communications

Another challenging year…

We all thought that 2023 would be a more stable year now that we are over the 2021 and 2022 pandemic lockdowns but with the continuation of the war in Ukraine and wholesale energy prices still high, it’s been a challenging start to the year for everyone.

The Bank of England has hiked interest rates for the 13th consecutive time in a row, raising them to the highest level in 15 years. And whilst inflation is slowing and started to drop a little, there is still a long way to go to reach the 5% levels promised for the end of the year. Until inflation does start to drop, we may see more interest rises to try and curb it.There are still huge labor shortages globally across all industries making staff attrition harder as churn rates are incredible high, which is impacting customer services.

McKinsey found that during the last recession in 2008, organizations that focused on Customer Experience came out of it three times quicker than those that didn’t. But you cannot reply on previous customer data to make assumptions about consumer behavior in 2023 according to Forbes who are advising organizations to ‘double down on customer insights’ because you will need relevant and reliable first-party data to be successful.

Customer services standards are falling…

The perceived standard of customer service in the UK is slipping in the wake of record inflation, according to a study by People 1st International. This was a survey of over 2,000 working age adults which revealed that close to half (41%) of the respondents believe that the standard of customer service they had received in the last 12-18 months had worsened.

People 1st International believe this is due to ‘skimpflation’, a phenomenon where inflationary pressures and squeezed profit margins are forcing firms to cut corners. Disinterested staff and chatbots replacing human interactions were amongst the most commonly cited complaints of respondents.

Harvard Business Review recommend the best way to prepare for a recession is to pull away from the competition by developing flexibility, maintaining customer loyalty, and making wise spending decisions that center around CX. Despite ‘skimpflation’ organizations are looking to invest in CX in 2023. Reuter’s latest research ‘The State of Customer Service & Experience 2023’ found that 75% of those questioned believed customer service and experience had gone up on the strategic agenda.93% thought customer service and experience were seen as either business critical, very important or important.

It’s on the agenda but we have yet to see organizational spending be delivered as expressed due to the macro-environmental factors mentioned previously. And according to research by Metrigy, CX is the number one priority for companies increasing their technology spend during 2023, with 65 percent of companies planning to do so. Virtually all (99%) of respondents admitted that to remain competitive in their industry, it is very important or extremely important that their organization integrates customer data into their business processes. However, only 2% say they do this extremely successfully, and only 17% do this very successfully. Moreover, the vast majority (94%) of respondents say being able to quickly adapt the customer experience strategy based on up-to-date customer activity is important for organizations like theirs, but just 42% can do this today.

In tough economic environments, hitting metrics can take on increased importance for companies to justify their budgets, but organizations can’t afford to lose sight of the overall customer experience by focusing solely on operational goals.Treating consumers like humans carries more value than pure operational efficiency during customer interactions. A recent survey found that a personable service agent has a bigger impact on consumer satisfaction than a short wait time. When a consumer talks to an empathetic agent, they are over 5 times more likely to be happy with the overall experience.By contrast, consumers with a short wait time were only twice as likely to be happy with the overall interaction.

The ongoing impact of the ‘Great Resignation’

We are all aware of the ‘Great Resignation’ and what this has done to staff attrition and labor shortages, globally. Sectors hit hardest by the COVID-19 pandemic, such as hospitality, healthcare and retail have tended to have the most job openings.According to the 2022 Work Trend Index survey by Microsoft, 43% of workers said they were somewhat or extremely likely to consider changing employers this year. For Gen Z and millennial workers, the figure stood at 52%, but it rose to 60% for workers hired during the pandemic.

Whilst we have initially seen the majority of labor shortages in hospitality industries due to ‘zero hour’ contracts, we are now seeing the knock-on effect within the communications industry or with communications professionals, albeit this differs from industry to industry.

Aspire’s own research into the ‘State of CCM-CXM Transformation, 2022’ found that with customer communication professionals 27% were considering switching jobs. The vast majority of those unhappy employees cited outdated software tools as the main reason for this. We also found a correlation between CX leader with high NPS scores and staff attrition -CX leaders are 3-5 times more likely to retain staff.










Changing consumer behavior

The Deloitte Connectivity and Mobile Trends Study, 2021 found that 32% of customers felt overwhelmed by technology. Most households having over 11 digital subscription servicesand over 41 connected devices as the Internet of Things (IoT) had just started its rise in dominance for our attention.

Before the pandemic, the average adult spent around 6 hours a day screen time. This rose by 60% over the lockdown period with the push from businesses to stay in contact with their customer-base through forced digital interactions. This is now at 11 hours a day!

The result… digital fatigue!

“The human desire to be heard and understood is universal, especially in today’s digital world. With all the economic, political, and medical uncertainties over the next couple of years, organizations need to get even better at recognizing and responding to shifts in what customers are thinking and feeling to retain their loyalty.” – Bruce Temkin, Head of Qualtrics XM Institute

Consumers have been relatively forgiving of the challenges brought on by staffing issues, but that patience has run out as their own wallets feel the impact of the economy down-turn.

During the last recession, 38% of consumers switched brands, and it may take only a single negative interaction.

Consumer spending growth is expected to drop in 2023, which we can all attest to. And most customers are feeling the strain of inflation and an uncertain financial future. Therefore,non-essential spending is decreasing, which means every experience matters.Organizations need to show empathy, build trust, and earn loyalty to survive in today’s uncertain times. A survey of 1,000 consumers and 500 marketers found that 22% of respondents admitted that trust in the brands they usually buy from had declined, with almost a third of consumers saying that rising prices are impacting their trust in brands.

Unfortunately for companies, the consumer voice is manifesting in action with one in five revealing that they have switched supermarket, energy supplier, or mobile phone provider in the last 12-months.Andy Beal found in his research for his book ‘Repped: 30 Days to a Better Online Reputation, 2023’ that 96% of unhappy customers will not complain, but they will tell 15 of their friends and family about the poor experience. 91% of these unhappy customers will never willingly do business with you again, they will just walk away, and you will not know why! But, in contrast, repeat customers spend 33% more than new customers.

Final thoughts for part one…

With so much uncertainty still lingering around in 2023; consumers feeling the financial strain due to inflation and being overwhelmed by technology; their willing to switch brands due to a lack of trust as service levels are slipping and prices rising; getting your communication strategy correct is critically important to stop customer churn and create trust and loyalty.

In the next blog I’ll be looking at how some of the latest communication technology and techniques can help you reconnect with your customer’s in more meaningful and personalized ways.

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