Economic challenges like inflation may seem like a bigger threat to customer loyalty than a raft of hard-working competitors, but the most successful businesses will be ready to take it on.
Although the rate of inflation has declined over the past two months, the Bank of Canada noted its peak of 8.1% this past June has made life difficult across the country. This includes the many people who have had to weigh the costs of everyday purchases like groceries to the untold numbers of businesses that are adjusting to shifts in supply and demand.
There is little most small and medium-sized businesses (SMBs) can do about the impact of interest rates as a result of inflation, or how inflation is affected by economies of our neighbours like the U.S. Sitting on the sidelines and hoping the news will get better is not an option either, though.
The traditional consequences of high inflation – such as rising prices, shifts in employment activity and delays on exports – are all customer pain points.
Even if your business was never designed specifically to deal with kinds of pain points, you can continue to focus on all the other areas where your customers need support. If nothing else, this ensures they recognize you’re invested in their interests as people and don’t merely see them as a series of transactions that become part of your bottom line.
Many SMBs, for instance, provide products and services that help their customers save time, save money, be more productive or to have more fun. Those products and services could continue to hold a lot of value for people, whether they’re living through a period of high inflation or not.
Then there is the customer experience that surrounds those products and services.
If it’s easier, quicker and more pleasant to engage with your company, you’re providing them one less thing to worry or get frustrated about as they make difficult choices due to inflation.
Customer retention at a moment like this will depend upon the following:
1. Prioritizing The Right Metrics
There is always plenty of areas to measure within a business, whether it’s output in a factory or time spent browsing a web site. They might all be important in one way or another, but a maintaining loyalty should lead you to focus on a few key metrics in particular.
Customer satisfaction (CSAT), for example, can be a strong indicator of whether those who buy from you will continue to do so, or whether they’re shopping around for an alternative. Net Promoter Score (NPS) is particularly effective in the business-to-business (B2B) because it indicates whether a customer is so loyal they’ll talk positively about your company to their colleagues and peers.
Another good metric to help understand the current state of your customers’ loyalty is Customer Effort Score (CES). This delves into how much work it takes for your customers to do everything from make a purchase to get customer support or manage a product return. If any of these metrics are trending downward, remedy the root causes of problems before inflation pushes customers to re-evaluate where they spend their money.
2. Marketing With Empathy And Encouragement
Nobody wants to receive an e-mail blast that suggests we’re living in a golden age where budgets are a thing of the past. While brands naturally want to use a tone of voice that emphasises the positive aspects of life, you can’t risk coming across as tone-deaf when your customers are up against challenges like inflation.
Fine-tune your messaging to show you understand that every dollar customers are spending with you now has to be carefully considered. Help them do the math so they can see more clearly than ever the kind of return on investment (ROI) they will see if they continue their relationship with you.
Whenever possible and as appropriate, look for ways to develop content that inspires as much as it informs and educates. This could go beyond talking about your products and services but ideas to help customers cope with anxiety and uncertainty, or even content that gets their mind of the impact of inflation for a while.
3. Leveling Up Your Loyalty Program
Retention and rewards go hand-in-hand. Particularly now, customers will appreciate being recognized for maintaining their relationship with your company. This could translate into additional discounts for loyalty program members, or a special promotion aimed at those joining your loyalty program for the first time.
Many people might be grappling with inflation by planning out their financial decisions farther in advance. You could help by providing loyalty program members a more detailed look at your product roadmap, or provide an early look at new products and services that are coming out soon.
If it’s possible to offer loyalty program members greater flexibility in product returns, free shipping on select items or a similar benefit, this could be a great time to introduce them. Overall, your loyalty program should also be a focal point for your personalization efforts, where you use data to engage with them in the most relevant and contextually accurate manner possible.
4. ‘Being There’ For Customers In Challenging Times
One final, and often overlooked, tactic during times of high inflation is simply checking in with customers without any agenda other than listening.
Use all the digital channels where customers spend time and – either through a survey or similar tool – ask how they’re managing with the recent fluctuation in the economy. What are they looking for from the companies with whom they do business?
These are simple questions that anyone can answer, and in many cases customers might appreciate being asked.
When you’re sensitive to the situations customers are going through, they begin to see the relationship with a company as more than the sum of the purchases they’ve made. They realize the company will truly be there for them in good times and in bad. And that means they might stick around with that company during those periods, too.
