Customer service during bad economic times.
Earlier this evening, I was watching the news and there was of course a story on Black Friday, the busiest shopping day of the year. In addition to aggressive promotional sales and reduced purchases, the story briefly mentioned how retailers were asking employees to be extra friendly. This comment made me wonder about how customer service was being affected by the economic trouble going on around the world.
I think there are two schools of thought on how a bad economy could affect customer service.
Customer service is pushed aside. During bad economic times, consumers are looking for good deals. They want their dollars to go further and to get more stuff for less money. Customer service is a “nice thing to have,” but not a necessity. As a result, consumers are willing to put up with bad service in exchange for cheap prices. If the service is good, great. If not, no harm done. Consumers are going out shopping to get the things they need at cheap prices, not necessarily to have an enjoyable shopping experience.
Customer service is more important than ever. During bad economic times, consumers are looking for good deals and retailers know this. Competition is stiff and good deals can be found everywhere. Every retailer has the same product for less money than it was selling a year ago and they are constantly slashing prices. Because the flat screen TV or collared shirt cost the same at two retailers, customer service can set them apart and create a competitive advantage. If both Nordstrom and Saks Fifth Avenue have sales on the same items and the prices are essentially the same, the customer would prefer to spend his or her dollars at the store where he or she is treated better.
The report talked about how Neiman Marcus was the darling of retail last year. This year’s darling of retail is on the opposite end of the retail spectrum: Walmart. It makes you think about how consumer priorities have changed with the economy.
I think the current situation is a mix of both situations I outlined above, depending on the purchase and the particular consumer’s financial situation. The people who are hurting the most are going to care the most about prices and the least about service. In turn, though, the people who are hurting less are likely going to care more service and that is where a lot of the service-based competition will arise.
What are your thoughts on how the economy is affecting customer service? What have your customers told you and what have you learned from your competition? Oh, and in case you’re looking for something more directly related to today’s shopping events, this was the post I wrote on Black Friday last year.