In the current economy, rising prices may be beyond your control. The quality of your customer experience, on the other hand, is not.
Customer Experience Matters
There is no doubt that one of the first things consumers do when encountering a product/service is to look at the price tag hence competitive pricing is critical to many businesses. That is why pricing strategies often dominate marketing strategies and companies focus on aggressively targeting customers with a wide range of discounts to preserve and grow their share of wallet and retain their customers. But what happens when macro-economic forces exert such pressure on product prices that they rise beyond consumers’ price tolerance? After all, few companies can afford an “Everyday low price” strategy to continue attracting shoppers.
In the 1990s a US political strategist famously coined the phrase “(It’s) the economy, stupid” to make sure they maintained focus on a key issue that truly impacted people. In 2022, it is time for mobile apps to do the same with the customer experience.
Holding on to customers when the economy is tough
Clearly companies must seek price efficiencies whenever possible. The obvious choice is often to pursue cost reduction measures. However the smarter companies are turning to their mobile strategies to find ways to increase their value to the customer without reducing prices. Eventually companies must maintain a hybrid approach; maintain their short term business performance as much as possible, while ensuring, long-term, that once the economy bounces back their customers will not have forgotten them. As many companies are now experiencing, the customers they “lost” during COVID are tough to win back. It is an exercise that is far more expensive than the relationship-building measures that would have held onto them in the first place.
When budgets are tight, invest in your mobile strategy
One of the key lessons of the COVID pandemic was that in times of economic uncertainty, investing in digital commerce, in particular mobile commerce, gave companies the biggest returns. Such improvements are aligned with strong market trends. They contribute positively to the bottom line. They cost a fraction of what it would require, for example, to upgrade physical stores or streamline supply chain logistics. And they will impact the widest audience.
Mobile phones are the most frequently used device in users’ lives and many people are far more comfortable with a mobile app than a browser-based e-commerce site. The phones are a gateway into users’ daily routine and there is no device that is more personal. Personalizing the customer experience is both expected and valuable.
Most importantly, mobile app users are more likely to be your most loyal and valuable customers. Circling the wagons around your app users makes sense. By making them the focus of the marketing budget and strengthening those relationships, companies can cut down on external spending without curtailing marketing efforts.
A good customer experience will get you through rough patches
It may sound counter-intuitive, but now is the time to invest in the relationship. Allocating budgets towards improving customer relationships will not only alleviate short term pressures, it is a good long term investment. Consumers whose buying power has been reduced will find it hard to spend money on non-essentials. Companies that are aggressive enough to nevertheless convince some customers to buy, run the risk that those buyers will eventually regret the purchase and resent whoever sold it to them.
Create a good customer experience by applying personalized, real-world insights. This will help you create useful, “selfless” engagements; helpful information and tips provided with no expectation of a payoff. Such measures strengthen customer loyalty and you will reap the rewards when the economy bounces back. Rewarding these non-transactional engagements with various perks and points, puts you in a position of ‘giving’ instead of taking. This will build customer loyalty and encourage them, when they’re finally back on their feet, to award you their business.
In tough times, buying loyalty with discounts and special offers is too expensive; companies will end up destroying their profit margins and still experience low conversions on upselling (consumers have less money). On the other hand, providing a great customer experience and building loyalty by investing in your customer relationships can be priceless.