In South Africa, we don’t do things by halves! While consumers and businesses in many countries are dealing with the dual global crises of Cost of Living and Supply Chain, we’ve added two of our own to really stretch our tenacity and resilience: the Energy Crisis and the Water Crisis, making for year-round stormy seas.

While all these issues feed into each other, our in-house research has revealed that it’s the cost of living crisis that is the most crippling for local businesses right now.  This is not surprising because if your client or customer is out of pocket, chances are, so are you. Unfortunately, this year has had a significant impact on the wallets of South Africans, who are actively taking steps to change their spending habits and save where they can.

Anchor in CX to Avoid Shipwreck

Looking at the bleak performance of Black Friday this year it’s a clear indication of just how cash-strapped South Africans are.  Media reported that the crowds in malls across Johannesburg and Cape Town this past Black Friday were particularly thin, with no queues outside stores – unlike previous years.

With limited cash to go around, how can businesses ensure that they are the ones that customers and clients will part with precious pennies for?

Well, since we can’t fix the economy overnight, one of the best ways for businesses to differentiate and survive, especially now as retailers head into the festive season and B2B companies look to renew annual contracts, is with a good customer experience.

The recent 2023 Ask Afrika Orange Index, published by research company Ask Afrika, found that companies that focus on CX  typically exhibit increased revenue, are more profitable, have more engaged employees, and have customers who are willing to pay up to 18% more for products.

This is significant because businesses can invest in understanding what their customers are facing at the moment, empathise with them, and then create solutions to reduce those pain points. If we look at the likes of how Shoprite Checkers, and the  Discovery Group are coping, they’re not closing the doors and turning off the lights; they’re fighting back by putting themselves in their customers’ shoes to understand exactly what they need. In doing so, they’re winning client trust.

Smooth waters never made a skilled sailor

Companies weathering the storm best are those that don’t focus excessively on cost and being the cheapest. Sometimes easier said than done.

However, if your strategy is simply to be the cheapest offering, then when your competitor matches or beats your price, your only option is to lower your price again. It becomes a race to the bottom until the company runs out of profit margin. And no profit means you’ll soon be out of business.

Rather, the winning companies in the Cost of Living Crisis are those that focus on a good customer experience and customer-service excellence.

As businesses we can’t control the economy, the markets, the supply chain and interest rates. But we do have an element of control when it comes to how we treat our customers, the level of service we offer, and how we empathise with them.

Now is the time to meet the customer where they are at. It’s tempting and seems counterintuitive, but do not obsess over price. Rather focus on how you can give your customer real value for their money.