Even in the healthiest of economies, individual businesses may face budget cuts due to poor sales, expense increases or other factors. Oftentimes, one of the first places businesses look to tighten their purse strings is in marketing and customer experience.
Here are some strategies to deal with budget cuts when they hit your customer experience program.
Maintain a Customer-Centric Mentality
“If your company is forced to reduce their CX budget, there are still ways that the CX team can drive ROI for the company,” said Fabrice Martin, Clarabridge chief product officer. “A customer-centric mentality across different sectors of the business and finding ways to make small changes to improve CX is a first layer that organizations should consider.”
Martin recommended analyzing your existing customer data to identify the leading reasons people call into a contact center, then develop solutions to deflect those calls to lower-cost channels such as chat, messaging or self-service. Additionally, you can use existing data to drive new revenue streams -- for example, working closely with the marketing team to improve the messaging, targeting and effectiveness of their campaigns. You can also work with the product team to ensure the desirability and quality of products.
“Once you identify areas of improvement, share those insights across the company to help catalyze decisions that will save money, open up new revenue streams and reduce risk,” Martin said. “With leaders from every sector of the business coming together to make small changes to improve the customer experience, the whole organization can continue to provide positive customer experiences without breaking the bank. In my experience, the key to maintaining strong CX with minimal resources is to identify the program’s primary objectives –– and then implement strategies that can be shared across the organization.”
See also: Key Changes for Customer Experience
Use Data to Establish CX Priorities
The best strategy for maintaining a strong customer experience despite budget cuts is ensuring the cuts don't affect the most important aspects of the CX, according to Matthew Edgar, partner and consultant with Elementive. “This is harder to do than say because it requires having clear data to prove which areas of the website and other marketing campaigns most directly influence the experience customers have. It requires looking at marketing channels not based on conversions or revenue, but on how those marketing channels correlate with metrics like customer satisfaction or customer loyalty.”
For example, if you find that your email marketing drives the highest amount of customer loyalty (as measured by site engagement, repeat sales, referrals, etc.), then email marketing should be the least affected by budget cuts, Edgar added. Of course, you can get (and likely need to get) more granular as you cut the budgets.
Focus on Expense Reduction
“When budgets are cut and CX improvement efforts are jeopardized, one strategy for protecting those CX investments is to focus on the expense-reducing (rather than revenue-enhancing) impact of a great CX,” said Jon Picoult, founder and principal of Watermark Consulting.
Conventional wisdom suggests an enhanced CX comes at greater expense, but that’s not always the case, Picoult added. “The fact is, a better experience and lower costs can actually go hand-in-hand.”
Sub-par customer interactions invariably trigger additional customer contacts that are simply unnecessary (e.g., follow-up calls from customers who didn’t receive a timely call back, new calls from customers who can’t understand a bill or proposal they received), Picoult explained.
“Focusing your CX initiatives to more effectively bring in new customers and remove needless points of sales friction are important strategies for marketing teams to ensure budget cuts have minimal effect on sales performance,” added Jake Levant, vice president of marketing at Lightico. “Customers don’t like to waste time being bounced around between channels, or being asked to perform inconvenient tasks like print, scan or visit physical branches. These poor customer journeys cause customers to lose interest and drop out of sales funnels, ultimately resulting in lost sales. By adopting CX solutions that remove unnecessary touchpoints and create a streamlined onboarding experience for the customer, companies move new business through the pipeline quickly and, in turn, see a steadier revenue stream."
See also: The Best Boost to Customer Experience
Studies suggest that, at most companies, as many as a third of all customer contacts are unnecessary — generated only because the customer had a failed or unfulfilling prior interaction, according to Picoult. Organizations with large customer bases can have hundreds of thousands of these unneeded transactions. If marketing can eliminate this expense, marketing may convince the CFO to restore the budget for selected CX improvement activities.
Bring Your CX Case to the C-Suite
When budget cuts are looming, you have to sell CX to those with the knives. Typically, this is the executives, said Shayne Sherman, CEO of TechLoris. “When dealing with executives, there are a few key points to hit. Trust me, I am one.”
- Talk about the company's future. Executives deal in the long term because that's what investors care about.
- Mention customer churn. So much of marketing is about getting new customers. If your CX is shored up, you'll keep those customers once you get them, and they'll help bring in others.
- Make it tangible. Show the executives a plan and tell them whose head is on the chopping block. It's easier for them to buy something if it's concrete and not a bunch of platitudes.
By hitting these, you're more likely to keep the budget you have and maybe get a little boost in the process, according to Sherman.
