Superior customer experience management (CXM) is even more vital in tough economic times when enterprises want to retrench. But through strategic CXM outsourcing, organizations can generate significant business value now and emerge stronger when conditions improve.
Geopolitical tensions causing supply-side disruptions, the highest inflation numbers since the 1980s, and rising interest rates creating tremendous inflationary pressure on Gross Domestic Product (GDP) growth have put many of the world’s largest economies on the brink of recession.
A recession would significantly hinder investments by enterprises in many industries in CX initiatives. But by partnering with outsourcing providers, enterprises can navigate these difficult times and come out ahead of competitors. Let’s explore how.
Importance of enterprises’ investments in CX during an economic downturn
During recessions, consumer sentiment and confidence drastically fall, making it even more crucial for enterprises to deliver superior customer experiences. Continuing to invest in CX can be worth it for these key reasons:
- Customer retention is cheaper than customer acquisition: Failing to maintain good customer service during a crisis can reduce customer confidence, severely impacting brand trust. Superior customer experience is a must-have to retain customers and enhance their lifetime value. This becomes even more important during recessions when gaining new customers is more difficult. In uncertain times, people double down on brands they trust rather than risk spending on unknown products that may disappoint them
- Experience management is necessary to understand customers’ changing needs during a crisis: Customer expectations change in a down economy. Understanding the effects of fast-eroding customer confidence and the impact of emotions on customer relationships is crucial to addressing changing customer wants and needs. This shift also represents an opportunity for enterprises to gain a competitive advantage by addressing changing customer requirements
- Superior CX helps organizations avoid price wars: Consumers are even more price sensitive during recessions. By delivering superior CX, an organization can stand out without having to cut prices to compete
CXM outsourcing is a viable option during an economic downturn
In this challenging environment, enterprises’ immediate goals are to reduce costs, streamline operations, and achieve quick and tangible benefits from all their investments.
A strategic third-party service provider can help organizations achieve these objectives, enabling them to better manage the downturn and accelerate their recovery. Providers can deliver the following benefits:
- Cost effectiveness: During recessionary times, demand for major enterprises’ goods and services takes a hit, affecting top lines, while fixed expenses remain stagnant. Through CXM outsourcing, organizations can convert these fixed expenses into more variable costs representing huge cost savings for many organizations. Selective outsourcing is one of the many effective strategies to control a company’s budget without compromising work quality
- Flexibility in managing resources: A global slowdown can force enterprises to reduce hiring, freeze salaries, or reduce their workforce. CXM outsourcing offers the flexibility to ramp resources up and down depending on need without having to lay off employees and hurt overall organizational morale
- Enhanced efficiency: Third-party CXM providers offer extensive pooled experiences, knowledge of existing and upcoming technologies, and awareness of best practices in the marketplace. These teams of experts can provide valuable insights to guide an organization’s CXM strategy and maximize efficiency
- Providing the necessary digital push: Investing in internal digital initiatives in uncertain economic times becomes difficult – even when long-term benefits are clear. Leveraging a third-party provider to support digital CX initiatives in a strategic partnership-led model can allow enterprises to accelerate their digital road maps while avoiding upfront costs through innovative pricing models
To thrive with a looming recession and emerge on top when economic conditions improve, enterprises need to look at their business strategies now and evaluate the potential opportunities to outsource all or part of their customer experience management services.
Enterprises should begin by identifying key areas that could be outsourced, such as lead generation, payment collections, and technical support. As they achieve success, organizations can then expand contracts – striving to outsource their end-to-end CX services while strategically engaging with service providers to generate significant business value.
Read the second blog in this series for further insights on the CXM outsourcing market, CXM Outsourcing Providers Can Thrive and Grow in the Upcoming Recession: Here’s How.
Don’t miss our webinar, Key Issues for 2023: Rise Above Economic Uncertainty and Succeed, to hear major concerns, expectations, and key trends expected to amplify in 2023.