As interest rates continue to rise and inflation stays stubbornly high, consumer confidence in Australia is teetering on the edge of a cliff.
Headline inflation has fallen from its 30-year high of 7.8 per cent recorded in December, but it still remains around 5 to 6 per cent, with food prices in particular staying stubbornly high. And while the Reserve Bank of Australia gave borrowers another reprieve in August, the 12 hikes to the official cash rate target since May last year are starting to give consumers considerable pause for concern. The most recent measure of consumer confidence from the Westpac-Melbourne Institute showed many Australians now have deep concerns about their personal financial situations.
Those worries are also starting to put the brakes on spending.
Internal payment data released from Australia’s biggest banks shows spending is falling faster than official forecasts from the Australian Bureau of Statistics. National Australia Bank transaction data indicates retail spending was down 6 per cent in June, while ANZ reported spending on shopping, dining and travel was down between 10 per cent and 20 per cent compared to the same time last year.
In this economically uncertain environment, fostering customer loyalty and satisfaction becomes a paramount goal and a massive challenge for customer facing companies. But how can a contact centre help foster trust, nurture loyalty and help consumers navigate the challenges of rising costs?
Considered communication the key to cut-through
For TSA Group Chief Growth Officer Blaine Slater, a high-cost environment means more focus on empathetically communicating with customers.
“When higher interest rates and inflation kicks in, it means that people typically want to be more considered, less impulsive and more informed with their buying,” Mr Slater says. “In that sort of environment, it is important to ensure that when a customer wants to buy a product, they can go through the channel that they’d like to get the information from so they can make an informed decision, because the threshold for that impulsive buy is probably higher during those moments.”
Mr Slater says the impacts of interest rates and inflation affect an increasingly broad spectrum of the Australian population. He says by taking an empathetic approach that transcends transactional relationships, customer service can truly be focused on the human connection.
“The thing that we are most conscious about is making sure that we’re really empathetic towards the situation, so it does really change our customer engagement approach,” he says. “We don’t want to push products or services onto someone that may be experiencing cost of living pressure. From an engagement perspective with customers, it is more about understanding.”
“We take extra care through these periods to make sure that the customer understands exactly what they’re purchasing or the service that they’ve got – is it necessary, do they require it, or what value do they get from it?”
Inflation, interest rates also a risk for businesses
While consumers hog the headlines, businesses are also facing impacts from the higher cost environment. Mr Slater says while not all businesses that TSA Group represents are tightening their purse strings, there are a considerable number that are looking to reduce their operating costs.
“It’s kind of a tale of two stories, we have some business partnerships with some utilities, and they seem to sustain reasonably well through these periods because they are required services such as electricity, gas and telcos,” Mr Slater says.
“But some of our other clients that are more optional, they take a little bit of a hit.
“So, to support clients we look to right-size their teams in line with their budgets, we potentially look to new communication channels that may be more cost effective, and in fact, some of the best innovation comes through these periods because of necessity.”
“When there is a more predictable environment, there is less incentive to try new things because it’s easier to predict what’s going to be delivered. But when there is a loss of consumer confidence, we certainly see the customer’s appetite for more innovative solutions increase, usually out of necessity.”
No matter the economic environment, TSA Group is committed to working with clients and consumers to ensure customer communication is appropriate, measured and delivers the best outcomes for all.
TSA are Australia’s market leading specialists in CX Consultancy and Contact Centre Services. We are passionate about revolutionising the way brands connect with Australians. How? By combining our local expertise with the most sophisticated customer experience technology on earth, and delivering with an expert team of customer service consultants who know exactly how to help brands care for their customers.