Call Center Management Featured Article
"Skimpflation" is Harming the Customer Experience
Nearly everyone has experienced the fallout from inflation, whether it’s in high gas or utility prices and higher prices – and smaller packages – at the supermarket. As a result, most of us are cutting back on spending deemed unnecessary. That’s a common theory, supported by research from UJET, which found that 79 percent of consumers plan to cancel subscriptions, move to lower-cost providers, or renegotiate existing contracts to combat inflation.
The interesting part is how customers are choosing which services to cut.
- 73% percent say they’ll first cut providers and subscriptions with the worst customer experience (CX), user experience (UX), app or platforms.
- 87 percent will spend less or stop spending money altogether at brands who skimp on customer service (66 percent say they have experienced “skimpflation” in the past six months).
What are the symptoms of “skimpflation” in the customer experience? According to the study, they include:
- Poor quality of service (60 percent)
- Long wait times (58 percent), and
- Declining expertise and helpfulness (54 percent).
“Rising inflation – along with predictions of a looming recession – have fundamentally changed consumer confidence and purchasing power for the worse. Households are thinking twice about how they spend and are looking to quickly make cuts,” said Vasili Triant, COO at UJET. “If brands want to retain consumers through this economic hardship, investing in the customer experience is the only way forward. The bare minimum simply won’t cut it – skimping on customer service will cost brands customers, revenue, and loyalty.”
Data from the Bureau of Economic Analysis bears this reality out: Real consumer spending slowed from a 1.8 percent annual growth rate in the first quarter to a low 1.0 percent rate in the spring quarter. With the U.S. economy contracting for the second straight quarter from April to June, all signs point toward recession. Many brands are cutting costs by reducing technology investments, headcount and team trainings. In the contact center, this has led to record wait times, burnt-out employees and insufficient service.
“While these findings are alarming for many brands, for others, it’s an opportunity to double down on their differentiators and expand market share,” said Justin Robbins, who led the research for UJET. “Consumers are clearly saying that CX is a top factor determining how and where they spend money. Smart, customer-centric businesses recognize this. When they see competitors cutting back, they invest more, further increasing loyalty and brand reputation.”
Edited by Erik Linask