How Should You Rethink Customer Loyalty Amid Skimpflation?

What matters right now for marketers is the organic messaging, brand promise, penetrating, and going through the credibility we earn from fulfilling the brand promise with great customer experience delivery and driving loyalty. That’s how we get ahead today, says Nate Brown, Co-Founder of CX Accelerator and Sr. Director, Affiliate Call Center at Broadcast Music, Inc. (BMI).

“When we’re in a period of abundance, it doesn’t really matter. The cash is there, it’s flowing. We’re not going to expel time or energy to assess the value of our existing relationships. But in a period of skimpflation, you’re like, is this still worth it to me? Consumers are thinking, is this an organisation that cares about or values me?” says Nate Brown, Co-Founder of CX Accelerator and Sr. Director, Affiliate Call Center at Broadcast Music, Inc. (BMI) 

Skimpflation emerges from a labour shortage, often attributed to The Great Resignation, alongside increased business costs stemming from inflation and supply chain disruptions. Consequently, customers may encounter reduced service levels and, at times, compromised quality.

According to Nate, organisations that excel in guiding customers through challenges and aligning with their definition of success stand out in the skimpflation era. Their unique ability to provide unparalleled value ensures customer loyalty and even growth in relationships, despite economic uncertainties.

Excerpts from the interview:

How should marketers adapt to changes in consumer behaviours owing to inflation?

I’m certainly not an economist, but I did participate in some research a while ago with UJET. They were using this term, skimpflation. We’re entering into a period of skimpflation, because of a potential looming recession, but we’re not in a full fledged recession yet.

So, what are organisations doing right now? They’re assessing the value of relationships with companies. Both consumers and businesses are going through this mentality in the skimpflation period. In other words, as Mary Drummond has asked so famously, ‘Is this still worth it for me?’

When we’re in a period of abundance, it doesn’t really matter. The cash is there, it’s flowing. We’re not going to expel time or energy to assess the value of our existing relationships. But in a period of skimpflation, you’re like, is this still worth it to me? Consumers are thinking, is this an organisation that cares about or values me? Would my life change significantly if I let this relationship go and moved on from it to either finding a cheaper solution or no solution at all? Maybe this type of product or service just isn’t a huge value add to me. 

So, the work of insulation and protection has happened hopefully in the past three-four-five years in terms of galvanising the value you have with that client or business. The customer is the hero of the story and the journey that they’re navigating is entering into this tumultuous period where there are many unknown variables.

So the organisations that have a lot of value to the hero of the story are those that can help navigate these challenges, and bring the customer towards their definition of success and in a way that nobody else can. Those are the organisations that have tremendous value, and in this period of skimpflation, they’re still going to have loyalty. They’re still going to retain that client, maybe even grow the relationship with them. 

Also Read: Establish Baseline Metrics for CX Improvement

What is the one thing marketers should stick to in deciding their strategies?

Think about the rise of the customer. It’s fascinating how much customer success has taken hold in both the CX and the marketing worlds—it’s simply the idea of maximising customer value with an incredibly intimate approach to both sales and market.

It’s about assessing the larger customer journey and asking the critical question – Are we bringing value in every stage of this journey the very best that we can? Are we being the guide to this customer as they navigate their path towards their definition of success? That is the work of customer success.

For a marketer in this period of time, it’s necessary understanding more about what the definition of success is—that’s the voice of the customer engine. Then, it’s crystallising to the organisation – What does it look like for us to be the guide? Because that’s different inside of each company. Both your brand promise in terms of how you help the customer navigate their journey, and who you are as a company, your stated ideals, your core values — are different.

A lot of people don’t know their own brand core. It’s crazy how few people can really tap into and articulate the unique nature of the organisation they work for. What is your brand promise? How do you help fulfill it? If the people in your organisation can truly answer that, then you’re in a very mature place and you, as a marketing team, is doing a great job to crystallise that brand promise, not just out in the world, but internally first. 

Our brand ambassadors internally mean a lot to our ability as marketers in getting the message out there authentically. Look at how much these paid ads and other things are proving to be ineffective. What matters right now for marketers is our organic messaging, brand promise, penetrating, and going through the credibility we earn from fulfilling the brand promise with great customer experience delivery. That’s how we get ahead today. 

There’s a time and a place for those paid ads. We don’t need to totally disregard them — it depends on how transactional it is or if we’re literally just trying to plant a new product, service or some cool new feature. There are times where we want to just get that out there and plant the seed, but if you want to hit home and actually generate a true lead or get to the point where you’re having a marketing or sales conversation, it’s going to take a lot more than that paid ad.

In your podcast Experience Matters, you once mentioned how CX professionals must have the focus of an Olympic athlete. And how do you suggest people find their focus and make it specific?

The quote comes from Marshall Martin, who was a mentor for me at a critical time in my customer service career.

I was trying to do it all, just chasing the rabbit all over the building. I thought if I know everything, I can be the most helpful, and therefore, the most valued. I had just been fired from a job and had this significant self-doubt. I was like, I have to be the best and smartest.

Martin saw me just chasing around in this desperation, but in my quest to try and do all these different things, I wasn’t making a difference in any one of them. So, it requires some more trust in collaboration than what I was offering at that time.

It’s a great lesson to a CX leader who’s trying to do it all themselves. It’s easy to try and shoulder the burden of this work very independently and autonomously, and think, I am fighting to give the gift of CX to this organisation. It’s dependent on me to give this gift.

It can’t be, it can’t be you. You’ve got to have the focus to get really good at one particular thing, but also have the courage to bring other people along that have different focus areas, so that together you can create this team that will make a tremendous difference. Not only does it make you more valuable in terms of the career impact that you can have with that area of focus, like Messi has –  clearly, he brought a previously unseen unique culture into Argentina’s team.

Messi’s one person, and I love the pass that he made in that second goal in FIFA Qatar. He probably could have made that shot himself, but the percentage chance of that forward on the left, and the fact that he passed that off, says everything about his mentality and the culture that he built on that team.

He trusted that player to execute and make the shot. That was an awesome team goal, that’s what a high performing team looks like in the area of CX, too. We don’t always have to be the one taking the shot. As the CX leader, we have to have other people that we trust are capable, and developing with their respective areas of focus, bringing the same level of intentionality to the parts of their work, and then trusting them to do it really well.