On 21st November 2020, the Nigerian economy officially plunged into a recession as the country’s GDP in real terms declined by -3.62% YoY in Q3 2020, the second contraction in 2020 (source: nairametric.com).

According to a report released by the National Bureau of Statistics (NBS) on 21st November 2020, the performance of the economy in Q3 2020 reflected residual effects of the restrictions to movement and economic activity implemented across the country in early Q2 in response to the COVID-19 pandemic.

What Does This Mean?

In an Impact of the Economic Recession on Nigeria in a Socio-Economic Context report published on naijaproject.com, the foreseen outcome of the recession is similar to that of the pandemic i.e. high-interest rates, increased inflation and loss of jobs

With this in mind, how can Nigerian businesses mitigate against losing customers?

How The Recession Will Affect Customer Experience In Nigeria.

With foreseen recession outcomes of increased inflation and possible layoffs by businesses seeking to achieve more with fewer resources to stay afloat, customers will experience changes in the availability, quality, quantity and value of their preferred products and services.

How do inflation and layoffs impact customer experience overall in Nigeria? Here are what customers should expect as businesses try to stay afloat during the recession.

Alternative marketing and sales. There will highly likely be less physical sales activities (also coupled with the outbreak and spread of COVID-19). This means customers should expect to get more marketing emails, text messages and telephone calls from businesses. For businesses that have never cultivated the habit of collecting customer contact data, auditing their customer database or segmenting customers (existing or prospects), there sure is a bumpy road ahead

Ater-sale support limitations. As human resource (customer-facing employees) would likely reduce, customers should not expect businesses to;

• Be available 24/7. For customers that are used to accessing 24/7 support, they may experience alterations in this regard as businesses try to reduce operating cost during the recession
• Retain existing support channels. As preferred customer contact channels in Nigeria are telephone calls, emails and social media (Facebook and Twitter), WhatsApp and Live Chats customer support channels would likely be unavailable during the recession (data source: Avetium Consults)
• Increase in response and resolution time. Although telephone (voice) and email channels are the preferred customer contact channels, customer should expect during the recession longer wait time and query resolution time as businesses work towards delivering value with limited human resource. For businesses that are yet to embrace self-service options, retaining customer satisfaction levels will be a huge challenge

Increase in price. With inflation, customers should not expect to pay the same amount for their preferred products or services. As businesses try to stay open amid the recession (depending on the size of the business), there will highly likely be the need to mark up on prices to cover their operating cost and record some profit

Product/Service quality modifications. Expected that businesses will increase rice of products/services to cover the unavoidable increase in operating cost. In cases when businesses do not want to increase the price of product/services bearing in mind prospective and existing customer ability/willingness to pay, customers should expect businesses to reduce current product/service quality to offer a product/service at the existing price.

Stringent customer loyalty. In a recession, businesses may not be as liberal as they would love to with regards to rewarding loyal customers. Customers should expect less indirect loyalty programs (programs unrelated to product/service) and more direct loyalty programs as businesses strive to maintain their share of customer wallet for longer periods. Customers should expect businesses to offer annual purchase discounts so customer lifetime value is secure for a whole year

How Nigerian Businesses Can Manage Customer Experience During The Recession

With the above impact in view, businesses in Nigeria can position themselves to retain and acquire new customers by considering the below.

Get Reacquainted With Your Customers

So much has happened with customers post the outbreak and spread of the coronavirus and now a recession. The customers you think you knew before the pandemic have somewhat changed in behaviour. Get reacquainted to know what has changed. Have their fears, needs, wants, motivations and aspirations changed? Have their buying patterns changed? Have they moved from one product/service type to another and why? Has their spend with businesses increased or reduced and why? Are there other opportunities outside your primary offering customers need that businesses in Nigeria can provide? Has customer’s behaviour towards aftersale support changed? What channels of service support do they use or prefer now and why? What are customers current top priorities and preferences?

A business can only truly satisfy and retain a customer it knows during the recession so businesses in Nigeria are encouraged to take a step back and get reacquainted with their customers. Get to know them all over again and think of this as rekindling a love relationship i.e. businesses need customer facts to set the ball rolling.

Review Your Customer Processes & Business Processes

Post getting reacquainted with your customer, consider reviewing the blueprint for your product or service with regards to your customer’s journey. Check to see that all your customer actions (what customers are expected to do to enjoy your buy and use your product/service) and business actions (what your business is expected to do to ensure each customer action elicits the right customer emotion). This is important to ensure that your business or organization is not sustaining processes and policies that are obsolete leading to customer dissatisfaction and customer churn. 

Review Your Products/Service Offering

As the outbreak and spread of coronavirus has impacted customer behaviour, it only makes sense for businesses to do a product/service audit in the recession. Your product/service was designed to solve a customer’s problem so if your customers don’t buy specific products/services, find out why. Knowing why will help businesses in Nigeria identify the most profitable and least profitable products so they can accurately set customer goals per product. In some cases (if you run a fair audit), you will find out that some of the offerings need to be cut off. If this is the case, channel your resources to increase the supply of your customer’s preferred product to sustain customer satisfaction, loyalty and profitability.

Try Story-Telling & Experiential Marketing

Showcase the kind of experience your existing customers are enjoying. Storytelling always works especially in a time when a customer’s buying behaviour is driven by his/her priorities considering the above-projected impact of a recession. Rather than run basic/expensive marketing campaigns for the sake of it, think about collecting customer testimonials and use this as content to not only sell the value customers can derive from your product/service from everyday people (customer relatability), but also use it as content to drive customer engagement on social media. This approach can help businesses increase customer reach organically and stay top of mind during a recession. 

Another option to consider is experiential marketing i.e. using experiential campaigns to trigger product to service activation. This approach to customer acquisition gives prospective customers an opportunity to experience a product/service for a limited period of time hoping that the outcome will be a sale.

Segment Customers & Give Each Segment A Unique Experience 

With a focus on new and existing customer relationship management that delivers on customer satisfaction and retention, Nigerian businesses during the recession should consider:

• New Customers: Review or create a customer onboarding experience that; welcomes new customers, educates them about product or service they have purchased i.e. how to use it, shows how customers can get help, shares product/service success stories from other customers, simplifies product/service repurchase and incentivises customers to keep buying over a longer period of time (loyalty/reward). Think about automating this so you free up human resource for other important customer relationship management tasks
• Existing Customers: Calculate product usage cycle per customer segment and monitor customer’s usage in realtime. Also important is to regularly monitor are; the quality of customer support you provide (availability of support/time of response/time of resolution/etc) and repurchase patterns (has customer’s spend increased or decreased). It is important to know why customers keep buying from you, reduced their spend or stopped buying from you. The insights from the ‘why’ will help in identifying gain points, pain points, risk points or improvement points so that targeted actions are taken to turn gain points into a marketing strategy (customer testimonials – storytelling), use pain points as insights to the design and deploy customer experience improvement initiatives, use risk points to prioritize what aspects of your customer’s experience to improve per time and use opportunity points to gain insights into new markets for further business expansion i.e. other business-related products/services customers need.

To survive the recession, it is important for businesses in Nigeria to track customer satisfaction in realtime. Are customers happy after every interaction with your business? Are customers happy with your product/service after a complete product usage cycle? 

In summary, staying on top of customer experience activities and acting on customer insights is a sustainable way for Nigerian businesses to manage customer experience during the recession.