06 Jan Will a recession negatively affect customer service?
We’ve all seen it. The past few months were defined by massive layoffs, especially those in the tech industry. Companies like Google, Meta, and Twitter laid off thousands of employees, leaving everyone with the notion that the current workspace defined by the pandemic might be shifting again. The feasibility of remote work, for example, are permeating water cooler conversations and causing feelings of anxiety for those in the field.
It’s not just the tech industry facing these layoffs too. What is now dubbed the layoff contagion has also breached the shores of Wall Street. Around 4,000 white collar workers aka finance bros from Goldman Sachs are facing elimination soon, pointing at the faltering economy as a reason. That’s about 8% of the company’s global workforce. The prospects are scary.
With experts predicting the start of the next major recession somewhere around early 2023, you might be thinking of how to stave off its effects and even shifting to a new career entirely. What’s a great industry, you might ask?
Customer Service is recession proof
Let’s face it, no career is recession proof. But there’s a lot of factors to consider before making that statement, however. There’s cost, circumstance, and many others.
In times of economic shifts, however, customer service (CX) becomes crucial. Oftentimes regarded as the lifeblood of a business, customer service is the glue that keeps a business together. Agents are at the forefront of every customer interaction, oftentimes spelling the difference between a sale and a non-sale, a gained or lost customer, etc.
The importance of customer service during a recession
Contact centers also offer the valuable service of offering personalized solutions, especially at times of uncertainty. In a theoretical recession, soaring prices due to inflation can lead many customers to cut ties with their beloved services. Before they do that, however, they are likely to deal with a company’s customer service team first.
Customer service agents are the best line of defense against possible loss of customers. They can offer alternative solutions to cutting a service entirely. With most companies having some version of a customer retention program in place, these agents are the most suitable advocates to implement these strategies.
How a recession affects customer service
Having already established the notion that customer service is vital during economic shifts, it’s apt to track the changes in the industry that occur as a result of these shifts.
A Harvard Business Review article from 2019 posits that in order to prepare for a recession, a business has to focus on its customer service operation and look at developing flexibility, cutting back on some spending, all while focusing on maintaining customer loyalty.
In other words, a contact center has to evolve.
The fact is, running a contact center is an expensive affair. Though working as part of the industry during a recession means that you’ll have a job, it also requires some changes and flexibility to it.
From a business’ standpoint, being flexible in a recession means that parts of their operations have to change. More often than not, this refers to the technologies employed in their day-to-day. Anything that does not offer value is usually cut or replaced as a result. Self-service solutions are also oftentimes set in place to save costs.
Employees, on the other hand, also have to adjust. These adjustments oftentimes refer to the tools they use and how they use it. Hiring initiatives might also be placed on hold, which opens up the possibility of having to work overtime. Cross-skilling also has been noted during rougher periods of economic shifts, which is great from both company-employees’ ends. The more skilled the agents are, the better adept they are at handing different roles.
Customer service as a major differentiator
The US Customer Experience Index of 2019 has found that good customer service is the biggest driver of customer loyalty. In an economic marketplace that is becoming increasingly more focused on customer retention than acquisition, this is very telling.
The costs of acquiring new customers has been found to be significantly more expensive compared to keeping existing ones, and thereby drives the initiatives of companies today. And with the threat of a recession, businesses today are wise to focus on improving their customer service today as it just might be the one thing that spells the difference between staying open and running out of business.