Depending on which politician or economist you listen to, we may or may not be in a recession. But you don’t need an expert to tell you that times are tough. We are in a period of financial uncertainty and instability, and it has a huge impact on people’s lives.
Every day the news is filled with stories of consumer struggles, from stubborn inflation driving up the cost of living and causing more people to live paycheck-to-paycheck, to increasing energy shutoffs as households fall behind on utility bills.
Consumer behavior has been volatile for a variety of reasons, ranging from ongoing digital fatigue to stress caused by the pandemic, and financial uncertainty is creating a compounding effect. This is making it a lot harder for service providers to engage effectively with their customers.
We surveyed billpayers across North America to discover what they’re experiencing now, what they expect in the coming year, and what their service providers can do to help them and manage recession risk.
Consumers are already feeling the strain
The Symend 2022 consumer report sets out how people are feeling the impact of the recession. Many already find themselves unable to make payments to service providers on time, and the situation only looks set to get worse. Almost half (47%) of billpayers say they have either fallen behind on payments in the last year or expect to do so in the near future, with this figure rising to 60% for those under the age of 55.
Financial situations are changing quickly, with 54% of billpayers saying they have more money worries than a year ago. A sizable 42% are saving less than they were and 25% are relying more on credit. Almost 70% expect that volatility and uncertainty over the next few years will require them to closely monitor and evaluate their financial situation. Meanwhile, over 60% are likely to reduce the number of service providers they use next year to help them save money.
Customers want support from their service providers
Customers want support from their service providers at this challenging time. The financial uncertainty they are experiencing is contributing to a scarcity mindset, where perceived or real resource limitations inhibit their ability to effectively make decisions and prioritize. More than four-fifths (84%) of the billpayers that took part in the study identified at least one action service providers can take to address this situation and help them more easily and confidently make positive decisions.
With that in mind, here are five of the actions service providers can take to help customers and manage recession risk:
1. Personalize every aspect of your interactions
Every individual has unique needs and, at a time of financial instability, those needs will be changing rapidly. Consumers want communications, options and solutions that are relevant and tailored to their individual situation, even if that situation is in constant flux.
Hyper-personalization can help individual customers make positive decisions and manage recession risk by addressing their core needs and motivations. More than half (53%) of billpayers say they’re likely to ignore a communication that feels generic and isn’t relevant or personalized.
2. Stop bombarding customers
Message volume and frequency is a key concern among consumers. Over half (52%) of billpayers felt communications from service providers increased during the pandemic and then either stayed at the same level or carried on rising. What’s more, 63% said excessive volume would make them more likely to ignore messages (which would prevent them from receiving the support they need).
It’s not just about frequency, service providers also have to make sure they are sending each unique customer the right type of message, at the right time, via the right channel.
3. Communicate with clarity
When we asked billpayers what actions service providers can take to support them in making decisions at this difficult time, many responses were centered around clarity of communication. They’re unlikely to pay attention to messages that are too long, complex or vague.
Clear explanations of charges or reasons for a bill were considered particularly important, as were simple explanations of the next steps of actions required. Some billpayers want practical information, such as options around financial assistance, which is particularly critical during the recession.
Overall, billpayers want short, easy to understand messages that give them the information they need to make effective decisions faster.
4. Issue timely reminders
At a time of financial uncertainty, service providers need to understand the difference between:
- sending reminders with a genuine sense of urgency that will deliver clarity of information and help customers to make positive decisions.
- sending unnecessarily aggressive or urgent messages that will only erode customer trust.
Communicating mindfully, and prioritizing the mental and financial wellness of customers in all interactions is essential. Issuing timely reminders can be a helpful strategy to keep customers on track and prevent them falling behind (as long as these are handled sensitively).
5. Interact with genuine empathy
The ability to truly understand a customer’s perspective and offer relevant solutions to their situation is important at any time. During a recession, this capability could mean the difference between loyal customers and a cancellation.
Anyone can find themselves in financial difficulties, and people can fall behind on bill payments for any number of reasons. The important takeaway for service providers is to demonstrate authentic empathy when supporting customers through these situations. Engaging with empathy builds trust, increases satisfaction and drives positive outcomes that will help both customer and service provider to manage recession risk.
To find out more about changing billpayer behaviors, what’s behind them, and what service providers can do to better support their customers in the year ahead, download our 2022 consumer trends report, The Great Shift in Billpayer Behavior.