Is customer service important in a recession?

I have been wondering if the downturn in the economy will result in an improvement to customer service in the marketplace. Conventional wisdom dictates that as companies tighten their belts and look to ways to recapture falling profit margins it is still important to provide excellent customer service to entice customers and encourage repeat business.

But do consumers care about customer service in a recession?

During tough times some may think that price (and with rising gas prices, convenience) becomes the only important differentiating factor between firms. I don't think this is necessarily the case.

Customer service speaker (sounds like a great job!) Kevin Stirtz recently wrote: "Customers are smarter now than ever. They know the difference between a company that exists to help them and one that exists to pick their pocket." He was talking about the importance of creating a customer-centric service culture to create a sustainable business and I couldn't agree with him more. Today's consumer works hard for their money and realizes now more than ever the importance of a dollar. They are going to be far more willing to part with those dollars on an emotional level at a company that truly values their business.

In a great article Lior Arussy asks the question: "Why’d we ever focus on customer experience to begin with?" He lists multiple factors for why it is that we focus and customer service and shows that none of those factors change during a recession. If anything it is more important to keep a focus on differentiation due to service during a recession because there are fewer dollars chasing goods.

I am happy to report that I have been experiencing some great customer service lately. It seems like everywhere I go cashiers and sales associates are truly happy that I am spending money at there stores. This could be due to a few factors. Maybe employees have made the connection between reduced sales and a reduced labour force. You could help employees come to this conclusion but be careful not to sound threatening. Your good intentions could have a negative impact. A "times are tough and we are all in this together approach" beats "shape up, or ship out" any day.

It also seems like there are a lot of people taking positions that they are frankly over qualified for. Because of the rise in unemployment some workers are taking what they can get. These star employees provide excellent customer service while raising the standards of the team. Problems may arise when these employees are enticed to leave for better positions. When the economy is back in an upswing retention will become an increasing issue. Your customers will notice when their experience changes and will punish you for it.

I think that customer service is without a doubt important during a recession. This is a short run view though. What will really be important is improved customer service in a recession continuing through the business cycle, that is where a company will move from just floating to being sustainable and successful.