Swimming Against the Current: Empowering Your Business During an Economic Downturn

By Gadi Shamia
November 9, 2022

The late-summer news that the U.S. had likely entered a recession didn’t come as a surprise. Many industries have been navigating uncertain economic conditions for several years now, driven by seismic shifts in consumer and employment activity arising from the pandemic.

In fact, many of the issues we’re seeing today started well before the lockdowns. Government attempts to keep people and businesses afloat during 2020-2021 masked these warning signs, contributing to the sense that things may get worse before they get better.

At Replicant, we’ve been exploring the impact of this anticipated economic downturn on customer service and have produced a variety of helpful resources for contact center leaders to consider when analyzing the challenges – and more importantly, the opportunities – that lie ahead.

Experienced customer service professionals understand the importance of investing in technology that enhances productivity, reduces costs and promotes customer loyalty. And this priority isn’t slowing down as you’d expect in a recession.

Spending on enterprise software is actually expected to continue to grow as leaders identify crucial “must-have” pieces of technology that can both cut expenses and improve the customer experience.

An analysis from Gartner projected global software spending to hit nearly $675 billion in 2022 – up 9.8% from a year earlier. This momentum is expected to continue and surge another 11.8% in 2023 to almost $755 billion.

“CIOs are accelerating IT investments as they recognize the importance of flexibility and agility in responding to disruption,” said John-David Lovelock, research vice president at Gartner. Clearly, there is a massive opportunity here. As the Gartner research indicates, tools that directly contribute to productivity will be prized by innovative IT professionals.

In light of increased IT spending amid changing economic dynamics, automation has rapidly become a critical resource for contact centers and will continue to gain prominence as leaders look to improve customer satisfaction, backfill missing agents and reduce costs.

I recently wrote in Forbes about how customer service is in a state of crisis, driven by an outdated model for contact centers relying on human agents forced to do repetitive, monotonous work. It is impossible to predict the number of agents necessary at any given hour, leading to understaffed operations – and furious customers. A highly scalable service, contact center automation removes the staffing headaches we’re seeing across so many industries.

But contact center automation isn’t about replacing the role of human agents. It’s about automating the tedious aspects of the job that become tiresome and lead to such a high level of turnover. And don’t take my word for it: a large utilities company in the midwest told us that they’ve seen up to 20% agent attrition a month.

A transportation company is still unable to hire enough agents just to get back to pre-pandemic numbers, which is about 30% short of its target. In a hybrid model, agents are instead empowered to work with customers who have more nuanced and complex requests, improving the quality of their job by giving them meaningful work, and providing customers with a more engaged support system.

So what does this mean for customer service and contact center leaders like yourself? We’re seeing the impact of increasing investments in “must-have” technologies firsthand with Replicant customers.

One of our longtime clients, the Canadian Automobile Association (CAA), adopted our contact center automation platform to be “prepared for whatever may come,” according to Steve Bennett, supervisor of member care for CAA. “Whether it’s an economic downturn or a spike in call volume tomorrow, we will be able to answer calls because of the automation we already have in place.”

While automation can’t solve all problems, it can help businesses spend less time and resources resolving mundane issues. This allows agents to focus on more complex and rewarding customer interactions, as well as increases the quality of customer service – therefore reducing customer churn and ensuring satisfaction with a brand.