There’s a strong connection between investing in customer experience and increasing the bottom line. But what happens to CX budgets during economic uncertainty, inflation, and changing customer priorities?
In 2023, many companies are looking for ways to cut costs and tighten their purse strings, and many (55%) customers have limited their non-essential spending. But at the same time, 82% of CX leaders predict their budgets will increase in the next 12 months.
How can CX leaders and teams balance a growing budget with economic turmoil? By investing in the highest-return customer experience strategies that allow them to spread their money. And those investments will likely be different than past spending. As the markets and consumers change, brands can’t simply stick with what they’ve done in the past.
Here are three investments companies can prioritize in 2023:
The growth of digital allows brands to do more with less and scale their efforts. Even if customers aren’t necessarily increasing their purchases due to inflation, a strong digital network allows them to easily stay connected to the company and build goodwill for the future.
A survey by TELUS International found that 72% of leaders are spending more on digital CX in 2023 than 2022, with 68% increasing their digital budgets by up to 25%. Among the top digital investments are customer relationship management (CRM) systems, AI, and customer analytics.
Digital experiences make interactions more convenient for customers and allow them to fully experience a brand, regardless of the channel they use. TELUS researchers put it this way: “In times of economic uncertainty, customers are more cautious about where they’re spending their money, and a positive customer experience that integrates elements like AI-powered chatbots, mobile apps, and united web interfaces can help brands stand out from the crowd, leading to increased brand loyalty and customer retention.”
One example is Lyft, which has committed to spending $300 million over the next few years on its customer-focused digital transformation. By investing in a more robust digital system and moving many of its services to an app, Lyft eliminated 65% of its human contacts for a more convenient and seamless experience.
Alongside a push for digital experiences, CX teams need data to better understand their customers and if their customer-focused initiatives are effective.
A Harvard Business Review study found that CX leaders feel a strong push to improve their customer data strategies because their current programs aren’t effective. 99% of leaders said that to remain competitive, it is very important for their company to integrate data into their business processes. 71% of leaders say they are looking to alter their CX data strategies.
Data has always been critical, so why the push to improve it now? Many companies are slowed down by siloed data and can’t access accurate, real-time data across channels.
Investing in an improved customer data strategy means enhancing collaboration across departments for a more accurate view of data that allows brands to better connect with customers. In challenging economic times, pinpointing customers’ exact needs and providing hyper-personalized experiences is critical—and that comes from having a robust data strategy.
As technology and customers change, customer experience teams and contact center agents must also adapt with new skills and mindsets. One survey of CEOs found that 71% say a skills shortage will be their biggest business challenge this year.
To combat a skills shortage, many companies are investing heavily in upskilling their employees and preparing them for the future. It all ties back to customer experience—when frontline employees are prepared to handle new technology and have the skills to do their jobs, they are more engaged and can provide a better experience to customers.
By 2030, digital transformation will change more than 1 billion jobs worldwide. Companies that invest in upskilling and preparing their frontline employees will be better prepared to lead in a changing future. Verizon recently launched a $44 million upskilling program to train employees with the technical skills they need for in-demand jobs. Amazon is also investing $1.2 billion in upskilling 750,000 frontline workers with course options in more than 400 areas.
Customer experience budgets matter even more during tumultuous economic times. Make the most of your money by investing in the areas that impact your customers most and set your company up for long-term success.
Blake Morgan is a customer experience futurist and the bestselling author of The Customer of the Future. For regular updates on customer experience, sign up for her weekly newsletter here.