• Ilkka Huotelin

How to cut costs but not lose customers


Normally the focus of customer experience management professionals is on improvements. For example, on making customers more satisfied and loyal. But when a business is faced with the unpleasant task of cutting its costs, its CX team must ensure the company’s competitive position is not scarified more than absolutely needed.

There are many ways of cutting costs, but they all inevitably will have impact on the customer experience and, if poorly executed, on the revenue as well. Whilst easiest to plan, the cheese cutter approach is probably the most damaging on the future business. Cutting the same percentage from all the functions does not take into account what the impact on the satisfaction each function has. It also ignores how sensitive the satisfaction or the revenue is to the reduction in each touch points. In the worst-case scenario, when the functions earlier on the customer journey cut cost, they create more work for the later touchpoints that get overloaded. This will greatly annoy the customers.

The second often used cost saving approach, and in some cases the only one that guarantees the survival of the company, is to cut on everything that does not bring short-term cash – support, development, marketing. This may help on the immediate cash flow situation, but is likely to start a negative spiral of customers becoming unhappy and churning. This leads into more financial problems and the employee experience is likely to suffer too. Many companies do not survive this. If this approach is taken, there needs to be a clear plan already in the beginning how to get back to normal operations as soon as there is cash.

The best way to cut costs is to cut them intelligently. If you know what drives customer satisfaction and loyalty, then you know where to make needed adjustments. For instance, a company might be currently providing over-quality in some touchpoints – one of our clients answered 98% of all calls within 30 seconds, while customers got annoyed only after waiting on-hold for 2 minutes. Once we highlighted this finding to our client-company, it made a necessary adjustment - fewer call centre agents on busy Monday mornings shift without any negative impact on the customer satisfaction.

At Be Customer Smart we have developed a solution that calculates the impact on the satisfaction and the future revenue for each KPI and how changing those values will change the NPS or the revenue. So, you can do what-if-scenarios on how, for instance, allowing more time to answer customer queries will hit your top line. This way, you know where you can safely save or where lowering the quality will have serious impact.

And finally, because the market will be different after a crisis, with the help of our solution you can redesign your company around new customer needs and be more competitive.

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