As we enter a new decade it seems, perhaps unsurprisingly, that most of us will remember 2009 for the impact of the global downturn, with the UK officially entering its own recession in January last year, record levels of unemployment and some high profile casualties on our high streets, including big names such as Woolworths and Zavvi.
However, it wasn’t all bad news. Fizzback’s research has also identified a few silver linings to all those clouds. Although customers were generally less tolerant of bad service, and more sensitive to price, they valued helpful and empathetic staff more highly. This means that companies who invested in listening to their customers are in a great position to take advantage of improving conditions this year.
Our findings indicate that consumer sentiments about the current situation with respect to employment and the state of the economy decreased steadily month on month throughout 2009.
However it seems that general optimism about the outlook in 2010 increased towards the end of last year, perhaps indicating renewed hope that conditions will improve.
Fizzback’s clients saw consistently positive customer sentiment scores despite the tough climate, demonstrating yet again that companies who systematically measure and respond to customer feedback are perceived more favourably, even when times are hard.
At Fizzback we saw another year of phenomenal growth, with the run rate of customer interactions increasing to 18 million per year by the end of 2009. That equates to an increase of 620% compared to the same period in 2008! This strong performance reflects many companies placing renewed focus on engaging their customers and delivering better experiences through actionable insight. We saw a marked uptake in demand with existing customers broadening the scope of their service and several new clients signing up.
Although cash flow positive, Fizzback also raised a second round of venture capital in 2009 to fund our expansion into new territories in Europe and North America and continued investment in game changing innovations for our clients.
Overall trends in consumer feedback from 2009
The economic environment has lowered customer’s tolerance to bad service and increased price sensitivity. Fizzback’s research found:
- Responses referring to the economic situation fell into four main categories: price sensitivity, employee empathy, frustration with the company, and frustration with the employee.
- Respondents’ comments around price sensitivity increased by 54% from November 2008 to October 2009. This is perhaps unsurprising in the context of the recession, as consumer’s uncertainty about the financial outlook continues.
Employee empathy is becoming increasingly important, growing by a staggering 85% between Nov 2008 and October 2009. This is a clear indication that consumers value the personal interaction they have with your employees more during periods of economic difficulty or uncertainty.
Fizzback recommendations on this scenario:
- When it comes to cutting costs, consider the long-term impact on value. As our findings show, the quality of interaction between customers and front line staff is now more important than ever. Businesses should therefore make sure that they balance short-term pressures to manage headcount with the longer-term implications for customer value. We suggest that a thorough analysis of customer feedback, to ensure that the real drivers of customer value are fully understood, should be a prime consideration for any companies facing pressure to cut costs.
- Improve First Call Resolution to reduce costs and improve the overall Customer Experience. Research indicates that customers tend to recall the first and last parts of their experience the most clearly over time. This suggests that companies that invest in making a good first impression by getting it right first time are more likely to be perceived favourably by customers in the long run. Needless to say, improving FCR is also an efficient way of reducing costs!
- Empathise with your struggling customers. Customer comments on employee empathy and helpfulness increased by 85% during 2009. A clear indication of the importance that customers attach to the empathy (or lack thereof) that they receive from front line staff. Companies should therefore be careful to ensure that the manner in which their staff are motivated and incentivised promotes empathy. At Fizzback we have seen our clients generate some fantastic improvements in customer advocacy by shifting to incentive models based on direct customer feedback. Managers are able to provide highly objective coaching using large volumes of feedback relating to each individual employee, and employees naturally raise their game when they know they’re accountable for every single customer interaction.
Key take away: In the current climate customers are less tolerant of poor service and have higher expectations of front line staff. In particular, our findings indicate that customers value staff empathy more highly during periods of economic hardship. This means that on one hand, the risk to companies failing to invest in delivering great customer experiences is greater. However, on the other hand, those companies that succeed in demonstrating that they understand and are sympathetic to their customer’s circumstances have a real opportunity to stand out from the crowd.
