Nearly 80% of Consumers to Cut Back Spend Amid Record Inflation, According to New UJET Research
Brands With Poor Customer Experience Will Be Cut First as “Skimpflation” Rises
Seventy-nine percent of consumers plan to cancel subscriptions, move to lower-cost providers, or renegotiate existing contracts to combat inflation, according to new data released today by UJET, Inc.
Nearly 80% of consumers will cut back spend amid record inflation, according to new @ujetcx research. Read more about the findings in the release.
The research, which is based on data from 1,600 consumers, reveals a major shift in buyer behavior due to rising prices and “skimpflation” – where companies skimp on the goods and/or services they provide to help combat rising costs. Key findings include:
- 73% of consumers said they’ll first cut providers and subscriptions with the worst customer experience (CX), user experience (UX), app, or platform.
- 66% of consumers experienced customer service skimpflation in the past six months – with 87% reporting they will spend less or stop spending money altogether at brands who skimp on customer service.
- The top areas consumers are experiencing CX skimpflation are quality of service (60%), wait times (58%), and expertise and helpfulness (54%).
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“Rising inflation – along with predictions of a looming recession – have fundamentally changed consumer confidence and purchasing power for the worse. Households are thinking twice about how they spend and are looking to quickly make cuts,” said Vasili Triant, COO of UJET, the world’s most advanced cloud contact center provider. “If brands want to retain consumers through this economic hardship, investing in the customer experience is the only way forward. The bare minimum simply won’t cut it – skimping on customer service will cost brands customers, revenue, and loyalty.”
According to the Bureau of Economic Analysis, real consumer spending slowed from a 1.8% annual growth rate in the first quarter to a low 1.0% rate in the spring quarter. With the U.S. economy contracting for the second straight quarter from April to June, all signs point toward recession. Many brands are cutting costs by reducing technology investments, headcount, and team trainings. In the contact center, this has led to record wait times, burnt-out employees, and insufficient service – as most recently illustrated by the airline industry.
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“While these findings are alarming for many brands, for others, it’s an opportunity to double down on their differentiators and expand market share,” said Justin Robbins, who led the research for UJET. “Consumers are clearly saying that CX is a top factor determining how and where they spend money. Smart, customer-centric businesses recognize this. When they see competitors cutting back, they invest more, further increasing loyalty and brand reputation.”
Although some businesses are combating rising prices, labor shortages, and ongoing global disruptions with CX skimpflation, UJET’s new research shows that customer service should be one of the last areas brands cut back, if ever, to stay afloat.
