Article | 4 min read

Stay agile and innovative—and rein in expenses

Facing a possible recession, business leaders are making tough choices. But it’s possible to slow spending and hiring, without sacrificing quality or scale.

By Julie Swinney, CFO, Zendesk

Last updated October 12, 2023

With interest rates on the rise and customer spending power decreasing for the second half of this year, customers are not exactly in the best position to splurge on non-essential items. It doesn’t necessarily mean that customers won’t be purchasing from their favorite brands anymore, but their overall experiences with a brand will play an important role.

Customers across the world are looking for better service experiences, and business leaders are feeling the pressure. According to the Zendesk Customer Experience Trends Report 2023, 80 percent of leaders agree that providing excellent customer experiences is key to future-proofing their customer base during times of economic certainty.

It can be tricky to retain your customers during times like these, as consumers are increasingly interested in companies that use AI to improve their service experiences yet most companies are doing their best to keep their investments to a minimum.

Provide personalized service without spending more

Globally, many organizations may need to slow their spending for various reasons, but spending less doesn’t have to translate into loss. This can be a particular challenge for departments historically viewed as cost centers, such as customer service. But when deployed correctly, your customer service center can help generate revenue—provided you invest in the right capabilities.

When you can’t add headcount, investing in AI isn’t a “nice to have” but rather a critical investment. AI can enable many companies to take their service experiences to the next level. For instance, the technology helps teams deliver personalized service—an aspect many customers are now craving. In fact, over 60 percent of customers state the faster a company can personalize their experiences, the more likely they are to use services or purchase products from a company.

Advanced AI chatbots can use customer data, like past purchases and preferences, to send tailored recommendations and promotions. They can also detect customer sentiment in messages to provide relevant responses, and when necessary, redirect a customer to the right agent.

If a frustrated customer reaches out to the customer service team via live chat, for example, a chatbot could sense their frustration and route them to an agent with extensive training in conflict resolution. With key customer information and context at their fingertips, agents can also provide more personalized, accurate responses and boost their productivity.

There are other AI investments you can make to further rein in expenses. You can use AI to refine your knowledge base so customers can find answers and solutions independently. This way, you can still provide customized services to consumers without spreading your team too thin.

Reduce costs while increasing customer satisfaction

Founded in 2004, Virgin Pulse is the world’s largest cloud-based employee well-being solution. Serving 14 million members in 190 countries, the app helps businesses promote a healthy lifestyle for their employees with health coaching, medical and condition management, well-being engagement, and digital therapeutic interventions.

Facing double-digit annual growth, Virgin Pulse needed to improve efficiencies with its self-service options.

“We decided to invest time and resources into improving our support site, which is powered by Zendesk and home to all of our external FAQs, and the results have been absolutely phenomenal,” says Michael Pace, Senior Director of Global Member Services at Virgin Pulse.

Virgin Pulse now serves millions more customers, and this increase in service happened without affecting the Member Services budget.

“If we had not implemented the self-service strategy, we would probably have had to increase our budget another 25 to 30 percent over what we spend today to handle the increased volumes,” Pace explains.

Virgin Pulse was not only able to stay within budget, but it also enjoyed a six percentage point increase in CSAT.

Increase productivity without compromising high-quality service

LUSH is an international beauty retailer known for its fair-trade practices, sustainability credentials, and cruelty-free cosmetics. Founded in the U.K. in 1995, LUSH now operates almost a thousand stores in 49 countries.

In 2016, LUSH partnered with Zendesk to standardize its business processes and digital offerings. That year—right before the holiday shopping season—LUSH also re-platformed its website.

“It was the busiest Christmas the digital team ever had,” explains Naomi Rankin, LUSH’s Global CX Manager. “Having Zendesk as a stable force at that point meant we could identify any potential customer issues and quickly get those rectified.”

With those strategic changes, LUSH saw a 50 percent increase in productivity while saving $208,387 in cost efficiency. The customer experience (CX) improved as well—the company earned a CSAT score of 91.8 percent, well above the industry average, even with a 60 percent increase in tickets during COVID-19.

“While we’re now a global business with a thousand shops, we want to perpetuate that feeling that we’re your friends, and if you come to us we have the time to listen to you and find a resolution,” says Rankin.

Prioritizing CX with AI

If you’re in a position where you need to slow spending, it doesn’t mean you need to sacrifice exceptional CX. On the contrary, by looking into AI capabilities, you can enable your organization to be more efficient, improve your service center without additional headcount, and meet customers’ rising expectations. AI will also empower your agents to deliver better service experiences while helping to improve your bottom line.

Check out other areas where you can see the highest return on your service investments to save cost and time.

Want to stay agile during a downturn?

Here's a guide for CX leaders to adapt customer service when facing uncertainty.

Want to stay agile during a downturn?

Here's a guide for CX leaders to adapt customer service when facing uncertainty.

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