As we approach the festive season, individuals are cutting back on festive spending as the cost of living crisis intensifies. There is no doubt that this Christmas, and for the foreseeable future, purse strings will tighten for nearly all across society. Customers will increasingly be looking for ways to economise – whether through cutting back on certain purchases, shopping around more for the best deals or making use of ‘pay now, buy later’ schemes.
All of this presents an obvious challenge for organisations, which will need to work even harder to maintain their bottom line. But in the face of this, let’s remember that service is a crucial differentiator in a difficult economic climate. As finances become squeezed, customers will become even more discerning with where and how they spend their hard-earned money – with organisations that offer not just the best quality product, but the best level of service they can afford.
Of course, this means at least maintaining service standards at their most basic level. Organisations should stay attuned than ever to their customers’ individual circumstances, demonstrating levels of empathy, understanding and flexibility, particularly when dealing with vulnerable customers or those experiencing challenging personal circumstances as a result of growing financial pressure.
They will need to maintain the fundamentals of clear, open and transparent communication. And as the economic situation becomes ever more challenging and complex, customers will be looking to organisations to help them solve some of the issues that cannot be fixed by Government and regulators, and to help them manage through the cost of living crisis.
We have already begun to see examples of organisations launching new initiatives to help customers manage their financial situation – from Iceland launching a ‘Food Club’ allowing members to apply for interest-free microloans on pre-loaded credit card to spend in store, to McDonalds launching its MyMcdonalds Rewards scheme, offering points for every penny spent, enabling users to claim free meals further down the line. External communications, too, have become more focused on the role product and services can play in reducing expenditure – for example in Persil advertising its latest washing tablets as able to remove stains in a quick or cold wash, saving customers money on their energy bills.
This is a difficult line to tread for organisations – particularly as it becomes more challenging to find long-term, sustainable solutions that require commitment from a diverse range of stakeholders. As ever, it is paramount that organisations maintain razor-sharp clarity on their sense of purpose – being realistic about their core proposition and taking the time to understand who they are serving, and how best they can serve them whilst maintaining profitability.
There are certainly choppy waters ahead – but those that take the time to consider how they can support customers through these challenging times – and put meaningful measures in place to do so-  will be rewarded with long-term customer loyalty and reputation.
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