Article | 4 min read

The role of customer service during an economic downturn

Preparing for change is an always-on job. Focus on where you can see the highest return on your service investments and enable tools and features that result in both cost and time savings.

By Scott Morris, SVP Global Marketing, Zendesk

Last updated December 15, 2022

The headlines read daily of impending recession around the world, leaving us to wonder whether and when it will finally arrive—and if it does, what severity or duration we can expect.

It’s unnerving, and yet we’re not strangers to uncertainty. If anything, we’ve learned over the past few years that we should both expect and prepare for change. And a lot continues to fluctuate.

Countries around the world are grappling with inflation and rising costs of living, and there are signs of a hot job market cooling. The pain isn’t felt evenly across industries or regions, but global economies are collectively reeling from the combined toll of the pandemic, the war in Ukraine, and ongoing supply chain issues.

These price increases across food, fuel, and consumer goods and services are real and especially significant in parts of the world already struggling with poverty and unrest. So as the World Bank continues to report economic slowdowns that we may feel at global or national levels, or within our communities and workplaces, we may wonder how best to proceed, to protect what we have, and where to make investments.

Perception impacts our reality

In this or similar climates we may be tempted to maintain the status quo or even stand still—to halt investments or growth projects. Yet as we learned in the early days of the pandemic, the companies who were further ahead on their path to digital-first had an easier time making the required shifts.

Analyst firm IDC’s recession playbook for IT investments, “Navigating Through the Storms of Disruption,” found that 72 percent of IT executives believe a recession is coming, and 40 percent of respondents from North America believe we are already in one.

So if we think we’re in or headed for a recession, then this guides our decision-making. From the same research, as many as 50 percent of tech buyers believe that a recession will lead to overall or targeted reductions in IT budgets. But this also leaves room for optimism. According to IDC, the majority of respondents anticipate a “modest or shallow” recession, lasting less than a year. And when it came to the C-level point of view on a recession’s impact, nearly 40 percent still thought that IT budgets could be increased.*

For IT leaders, much like customer service leaders, it’s investments in automation that will reduce the cost of operations. IDC reports that “In 2025, 60 percent of infrastructure, security, data, and network offerings will require cloud-based control platforms that enable extensive automation and promise major reductions in ongoing operations costs.”

Customer expectations won’t change

One thing we know with certainty is that customer expectations continue to rise and that the way we meet our customers in times of duress is critical. Our 2022 CX Trends research found that more than 60 percent of customers say they now have higher customer service standards, and that customer engagement was up 14 percent compared to 2021. That translates to higher volume—but also more opportunities to connect and build relationships with customers.

This matters. Our subsequent 2022 CX Accelerator report underscored a support team’s ability to retain (and cross-sell or upsell to customers), and 64 percent of companies say that customer service has a direct impact on their bottom line.

We also know that there’s huge potential in how AI and automation can better serve customers across all service interactions and that finding the right balance between personalized human and automated service is crucial.

What service organizations can do now

Some leaders will face tough budgeting decisions in 2023 and others will have those decisions passed down. Either way, we’ll all be tasked with making it work for our customers.

To help, we’ve broken down some of the top challenges you may be facing in the coming year and will address them in this editorial series over the next few weeks. We’ll also suggest actions you can take now or in the near term to meet these challenges:

We’re inspired by the success stories our customers have shared, and we hope they inspire you, too—and help illustrate what’s possible.

It’s no small job to adapt to change, build resiliency within your team, and manage uncertainty. We all have to be vigilant with our resources—people, budget, time, and tools—without sacrificing the customer experience. Constraint and creativity often walk hand-in-hand, and we know there are exciting strides ahead.

*IDC, Navigating Through the Storms of Disruption: A Recession Playbook for IT Investments, Doc # US49790822, October 2022

Taking action during an economic slowdown

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

Taking action during an economic slowdown

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

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