Customer Service: How Will It Change After COVID-19?
How different will the customer service experience look after the coronavirus crisis? Is there any risk involved for businesses in consumer markets? COVID-19 has made huge changes to how people live, work and shop, from the rise of telehealth to a near cashless society.
“It’s what I wrestle with every day,” says Richard Hatherall, who leads Bain & Company’s Asia-Pacific customer strategy and marketing practice. “If I’m a customer-facing business, what’s it going to take to win in the ‘new normal’?”
The expert in customer loyalty and experience transformation says the biggest change in customers has been their attitude to risk and safety. What started early in 2020 as a massive increase in searches and social media mentions of terms such as “mask”, “hand washing” and “isolate” will “morph into a broader shift in the consumer psyche that focuses on habits: how people exercise, holiday and interact”. The health and safety issues that frightened people during the crisis will affect consumer behaviour long after the curve flattens.
By mid-April Bain found “reduces risk” had risen to a high priority for most people in consumer markets; in some industries, such as retail, pharmacy and takeaway food, the element rated almost as important as “quality”. This customer wariness has been compounded by economic hardship. For an example of how that could affect consumer spending long-term, Hatherall points to the Global Financial Crisis. “You have a segment of millennials who aren’t using credit cards because they saw their parents get into too much debt,” he says.
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The consultant says some individuals and population segments are more tolerant of risk but more broadly he asks what people will be worried about. “‘Should I go to this restaurant?’ ‘Should I go to the gym?’ A walk in the park feels safer.” The insurance sector will benefit from this risk aversion, as will products seen to minimise danger, such as takeaway food and domestic travel.
The second big shift is the “turbocharging of digital”, an acceleration of a pre-crisis trend. “Bank CEOs told us they’d undergone their biggest change in how customers interact in just weeks,” says Hatherall. Digitisation is a “massive opportunity” to extend reach for businesses that can find the right “fusion” between a physical and digital presence. He notes Amazon in the United States was already onto this with its Amazon Go stores (offering “just walk out” technology free of queuing or touch-based payments). “In businesses impacted by social distancing we’ve seen a lot of innovation around how to pair up in-store offers with what can be offered to people at home; how to keep the connection and community. This won’t go away.”
Bain’s Anticipating When Consumer Sentiment on COVID-19 Will Turn analysis proposes that “a premature shift to more optimistic messaging could seem tone-deaf to consumers’ continued anxiety.” It’s too early to determine the winning brands after the crisis but a Bain report in May found insurgent brands of consumer products were capturing much less growth as consumers and retailers turned to incumbents. Big household names could convert those customers to repeat buyers but the report noted insurgent brands are entrepreneurial enough to pivot.
The strongest shifts will be due to habits forged during the crisis, Hatherall says. “Not everyone will go back to working in an office. Not everyone will go back to shopping in malls. But some people just want to go out for a good bottle of wine – and the risk-averse will choose restaurants with outdoor seating.”
