There's no doubt the COVID-19 pandemic has smashed through the global economy like a Category-5 hurricane, leaving mayhem and disruption in its wake. Signs of the devastation are everywhere - high unemployment; stagnating economic growth; and businesses of all sizes, including some well-established brands, permanently shutting their doors.
The lock downs caused by the pandemic have created a unique scenario for consumers. Similar to other recessions, people have become more frugal and seek more value when they make purchases. However, unlike other recessions, many people, even as restrictions are loosening, are reluctant to leave their homes to shop, dine, and socialize. Instead, they've turned to digital services, such as online shopping and Zoom happy hours, to fill these needs.
Businesses should respond by being where their customers are. This doesn't just mean stepping up online marketing or social media presence. It also means providing digital customer service to match consumers' increasing adoption of digital lifestyles. Not only will this align better to customer behavior, but it's also a lower cost alternative to phone support, an important consideration in these days of shrinking revenue.
Changing consumer behavior
So many people are out of work and many of those who still have jobs are worried that they will be filing for unemployment soon. Under normal circumstances, it would be a time of high stress. But these, of course, aren't normal times. Adding a killer virus to the mix has people hunkering down at home and worrying about the health of themselves and their families. Here are some of the ways this unfortunate combination has changed consumer behavior, at least in the short term.
- More online shopping. As nonessential businesses were forced to lock down, people turned to the internet to get what they needed. But it didn't stop there - even when businesses, like grocery stores, were still open, many consumers didn't want to risk their safety by shopping in person. In fact, according to an article in Supermarket News, the percentage of people that have shopped for groceries online has doubled since the pandemic began.
- More online socializing. Most people are social creatures, not meant to be confined alone in their homes. When cabin fever quickly set in, people turned to digital means to satisfy their need for human interaction. Zoom-enabled book clubs, sharing creative quarantine videos, virtual yoga classes, and increased social media use are all popular ways to keep in touch with friends and family. EMarketer reported in a recent article that as many as half of adults said their social media use has increased during the pandemic. Further, video conference provider Zoom went from an average of 10 million daily meeting participants in December to 300 million daily meeting participants at their peak during the pandemic.
- More frugal consumers just buying the basics. Economic uncertainty has changed consumption habits. More people are trying to live within their means, looking for bargains, and buying only the necessities. This has led to a decrease in sales of certain categories of consumer goods, such as apparel. While this new frugality is necessary for the unemployed, even many who still have jobs have reduced their discretionary spending.
- Shopping local. Many consumers saw the devastating impact the lock downs were having on local businesses and stepped in to help by shopping locally. This even included measures like purchasing gift cards from restaurants who were forced to close temporarily. Additionally, when the overwhelmed supply chain failed to provide some necessities, consumers found a way around it by, for example, purchasing produce and meat directly from local farmers.
It's difficult to predict which of these behaviors will revert to pre-pandemic habits once the threat of COVID -19 has passed, but it's likely that the more convenient activities, like online shopping, will stick. Regardless, getting back to "normal" seems to be in the distant future, so businesses need to continue to adapt to remain viable.
Pivoting to survive
For many industries, businesses that are agile and can pivot to meet the current reality are the ones that will emerge from the pandemic still strong. The news is full of stories of liquor distilleries that now make hand sanitizer and clothing manufacturers that redirected their focus to making masks. This was often altruistic in nature, but these organizations are also benefiting financially because they were nimble enough to quickly fill unmet consumer demand.
Filling unmet needs is one way to tackle the current business environment, but some organizations are also focusing on creatively reducing costs. For example, research firm International Data Corp. estimates that 40% of companies world-wide are increasing their use of automation as a response to the outbreak. Selling directly to consumers, as Heinz is doing with its Heinz at Home service, is another way to boost margins. The service, launched in April, 2020, is an example of how even major brands are pivoting in response to current conditions.
By opening their first online store, Heinz joined a multitude of other companies that have leveraged digital methods to reach customers and reshape their business models. Businesses have found some success increasing their digital advertising and social media activity, reaching more of those consumers who are now spending more time online. Additionally, small businesses have embraced digital technology to offer services like virtual wine tasting, piano lessons, and culinary tours. Telemedicine is becoming much more common and businesses are investing in digital collaboration tools to help their remote employees be more productive.
Try to imagine this pandemic without digital capabilities.
Digital customer service
Leveraging digital capabilities shouldn't be limited to marketing, selling, and delivering products and services. That leaves an important part of the customer journey out. Organizations also need to incorporate more digital channels, like chat and social media, into their customer service models. If more customers are online, the demand for digital support will increase. Why make all online users make a phone call to receive support when many would find it more convenient to chat or send a note on Facebook Messenger.
When consumers are holding onto their money more tightly, companies have to work harder to earn their business. Just because people are being more frugal doesn't mean they're ready to compromise on customer experience (CX). Offering digital support options is a way for businesses to differentiate themselves and improve the customer experience.
Additionally, digital support is typically less expensive to provide than phone support, something that should appeal to organizations when revenue may be declining. As an example, chatbots can automate part or all of individual interactions on websites and within messaging apps, making this a very cost-effective option. And even higher touch digital channels, such as chat, can be cheaper than phone support because agents can handle multiple sessions at once.
Businesses that do implement more digital channels need to do so in a thoughtful way with an eye on customer experience. While customers may appreciate more channel options, they will become frustrated if organizations don't provide omnichannel experiences that allow them to move seamlessly across channels within the same interaction. Research shows that half of consumers will stop doing business with an organization that frustrates them, and nothing frustrates people like having to repeat their information over and over as they switch between customer service channels.
Pivoting the customer service model
While implementing digital support channels makes sense given current circumstances, it wasn't the first thing contact centers did in reaction to the lock downs. Rather, they had to worry about very near-term continuity. How would they support customers when their non-essential facilities had to temporarily shut down? For many operations, this meant quickly transitioning to a remote agent model, a truly impressive pivot. Some organizations were able to set up large numbers of at-home agents in just a matter of days.
But for some businesses this wasn't enough. They continued to reshape their customer service models by implementing digital channels. This was often in response to spiking call volumes and increasing call complexity that overwhelmed their agent workforce. Government agencies and businesses in the financial services and travel industries were hit particularly hard as people called to check on unemployment benefits, defer loan payments, and cancel travel plans.
Citizens and customers need an alternative to long phone wait times, and that's where digital options are helpful. There are many digital channels, all with their own unique capabilities and strengths and weaknesses. These channels include:
- Email. Email is the "old man" of digital channels. It allows customers to provide a lot of details about their issues (including photos) and those who use it expect a lag in response time. According to the 2019 NICE Customer Experience (CX) Transformation Benchmark, email is one of the most used and preferred channels. Frankly, it's unusual to find a business that doesn't offer email support.
- Chat. Chat is a great support option for website users because it allows customers to connect immediately and conveniently to agents or chatbots when they need assistance. Like phone, chat involves real time interaction, which has implications for agent staffing. Our research, cited above, shows that chat is tied with phone as the most satisfying channel. And use is increasing, giving email a run for the money as the most used digital channel.
- Mobile apps. Although mobile apps don't make sense for all business models, they can be very effective at facilitating customer self-service which, of course, is good for the bottom line. According to our research, mobile apps are the most commonly used self-service digital channel and the one with the second highest satisfaction score.
- Website. Company websites are an important part of every customer service strategy, as they are often the first place customers go for answers. Websites should have features like robust and effective FAQs to help customers self-serve. In return, businesses can avoid more costly agent-assisted contacts.
- Chatbots. Chatbots are beginning to be more effective and more widely adopted, thanks to advances in artificial intelligence (AI). They're good for answering basic questions and performing narrowly defined tasks, like helping customers check order status. And when they can't assist a customer, they can seamlessly hand them and their data to a live agent.
- Text (SMS). Think about how much you or your friends or family members text. It's probably a lot. Doesn't it make sense that you could use such a popular communication method to interact with companies you do business with? Text isn't as widely used as many of the other digital channels, but it has respectable satisfaction scores.
- Social media. It gets a lot of attention, but use of social media for support is actually pretty low (only 6% of surveyed consumers had used social media for their last customer service contact) and it's satisfaction scores are among the lowest. If your business is on Facebook or Twitter, you're probably already providing some sort of social media support, even if it's not handled by the contact center. Afterall, when someone Tweets at a business, there needs to be a response.
There are many options for businesses that want to use digital channels to help with their customer service pivot. And the good news is that, for those businesses using industry leading cloud contact center software, new digital channels can be added relatively easily and quickly. Focusing specifically on digital capabilities to automate contact handling or increase self-service opportunities is the right approach when call volume is overwhelming and customers need help right now.
Benefits of digital channels
There are two broad categories of digital channel benefits - improved customer experience and cost savings, both of which are very relevant in the COVID economy. Let's look at each a little more closely.
- Meeting customers where they are. As discussed previously, when consumers are spending more time online, businesses should meet them there to provide support and solidify relationships. This isn't just relevant for pandemic-related consumer behavior. Younger consumers - the "digital natives" - expect it.
- Providing an alternative to long phone queues. It's a widely known fact that absolutely no one likes to wait in phone queues. When phone volumes are high, digital channels provide options. Most digital channels don't come with an expectation of an instant response, so customers can submit their issues and move on. But don't make them wait too long for a response!
- Empowering customers with self-service. Digital self-service, offered through capabilities like mobile apps and chatbots, will satisfy customers that just want to quickly solve their own problems. This is true under normal circumstances and especially true when the alternative is waiting in a long phone queue.
- Automation. Those self-service capabilities aren't just good for CX; they're also much cheaper than agent-assisted contacts. Additionally, when chatbots collect customer information for chat agents, that decreases the handle time of the chat, which lowers labor costs.
- Lower cost per contact. As mentioned previously, some agent-assisted digital channels have a lower cost per contact due to the way agents handle them. For example, an agent might be able to handle 3-4 simultaneous chat sessions in the time it would take to handle one phone call of moderate length.
- Higher agent utilization. If a contact center uses omnichannel routing, digital contacts can be used to keep agents steadily busy when there's a lull in phone volume. For example, if there are no calls to handle, agents can respond to emails or text messages. Higher utilization is good for the bottom line.
The pandemic has been a harsh, abrupt test of continuity plans and organizational resiliency. It's also accelerated the implementation of some concepts that were a little further down the road on many contact centers' project road maps. For example, at-home agents weren't widely used prior to the pandemic, but now 73% of surveyed contact center leaders plan to let at least part of their agent workforce continue to work from home after the COVID dust settles. Additionally, contact centers are moving up their plans to implement cloud-based software because the pandemic has proven the cloud's ability to provide organizations with the flexibility they need to manage a crisis.
It's also likely that many of the other customer service pivots will become permanent. Now that more businesses and consumers have seen the value of digital support, businesses will likely refine these services and expand their use. Organizations that have successfully pivoted their customer service models have increased their immunity to the next crisis that materializes. Perhaps a silver lining to the pandemic is that many businesses will emerge with better, more flexible continuity plans and enhanced customer service models.
Pivoting your customer service model with NICE
When the pandemic hit, our clients were uniquely positioned to quickly transition to a remote agent model. Watch how Trupanion moved 900 agents home in less than 72 hours with NICE CXone. Then watch Digital-First Customer Service: The Future is Here Today for more information about the digital imperative.