The importance of customer service during a recession thumbnail image Published on 11th August 2023 by Gemma Harding

From the Great Depression of the 1930s to the financial crisis of 2008, global recessions have been fairly common over the last century. These times of financial uncertainty not only put pressure on individuals, but can also challenge the resolve of even the most resilient of businesses and organisations. With almost two-thirds of chief economists believing a global recession is likely in 2023, the business world is once again bracing itself for another period of turmoil and looking for innovative ways to not just survive but thrive. 


One such method of survival lies in an often underestimated yet immensely powerful asset –  providing exceptional customer service.


In this guide, we delve into the intricate relationship between customer service and recession management. To help your business put together a strategic approach to customer service that can help you weather the storm, this guide first looks at how recessions can affect businesses. It then outlines the things you can do to prepare your customer services for a financial crisis. Finally, we explore the benefits of increased outsourcing during a recession.


How does a recession affect a business?


The fact is, recessions are periods of uncertainty that can wreak havoc on businesses of all sizes. Below we take a look at the three key ways in which a recession can impact a business:

  • Lower profits

When recession hits, consumers naturally become more cautious when it comes to spending. This typically involves cutting back on non-essential purchases and seeking better value for money on everyday essentials. With this in mind, businesses can find it harder to generate their usual sales, especially if the business is in a so-called ‘non-essential’ industry. When this happens, businesses may be forced to cut costs in order to balance the books. This can result in redundancies and a reduced desire to invest in new product/service lines.

  • Reduced lines of credit

Individuals and businesses are not the only ones affected by recession. The way lenders such as banks and credit unions operate will also usually change. Providers of credit will usually become more risk averse. This can make it harder for businesses to access new lines of credit.

  • Cash flow issues

As recession hits, individuals and businesses alike may find it more difficult to make payments. With this in mind, your business may have to spend more time chasing invoices and, as a knock on result, delay making your own payments to suppliers/lenders. 

How to prepare for a recession: should you double down on customer services?


As the storm clouds of recession gather, businesses should start to reevaluate their current business strategies. Part of this process should involve prioritising their resources and the services they offer to see where cost-saving cuts can potentially be made. This is an essential part of recession planning. Failing to do this can put your business on the back foot going into a financial crisis, meaning harder, more severe decisions may need to be made later down the line. On the other hand, cutting too much – or in the wrong areas – can make the situation worse.


With this in mind, it can be tempting for businesses to cut costs equally across the board in a bid to stay afloat. This might include cutting/reducing customer service expenditure. However, this can be a shortsighted approach. On the contrary, a proactive approach to preparing for a recession could involve actually doubling down on customer services. 


Think about it – when consumers are tightening their purse strings, they are looking for added value. That is, not just products and services that do what they say on the tin, but a comprehensive experience that provides value beyond the price tag. By ramping up customer service efforts, businesses can build lasting relationships that transcend economic hardships.


By enhancing your business’ customer service output, you can ensure that customers feel valued, heard and understood. This may take the form of ensuring you are readily available to address concerns, providing accurate information, and delivering timely solutions through the use of outsourced customer service call centres or 24/7 live chat services, for example.

At the end of the day, a robust customer service strategy can help your business to better anticipate customer needs and offer personalised recommendations. This adds value and fosters loyalty in the eyes of the customer. In this way, customer service becomes an investment in long-term customer relationships that can help to carry a business through the recession and beyond.


Outsourcing during recession: the benefits 


Outsourcing customer service operations might not be a new concept, but its significance during a recession cannot be overstated. Below we take a look at a number of key benefits that outsourcing these services can have for your business:

  • Cost efficiency: Outsourcing customer services is often more cost-effective than building, growing and maintaining an in-house team. Think about training costs, increased overheads and natural staff turnover

  • Flexibility: Outsourced customer services teams can be as flexible as required. For example, partners can provide 24/7 customer support, catering to customers in different time zones. This is something your domestic in-house team may not be able to provide.


  • Specialist expertise: Outsourcing partners can bring a wealth of experience and specialised skills to the table. This can be especially helpful if you are looking to grow your customer service offering. For example, this could include introducing live chat messaging or 24/7 call centres.

  • Maintaining focus on core business function: By outsourcing non-core functions like customer services, you can focus internal resources on primary business functions. For example, this can include areas such as product development, marketing and strategic planning.

In the face of a recession, the strategic importance of customer service cannot be overstated. By embracing customer service as a key weapon in the fight of recession survival – and recognising its ability to add flexibility and long-term added value to their business offerings – organisations can give themselves the best opportunity to emerge stronger on the other side.

Remember – the way you treat your customers during tough times can define your reputation and prospects for years to come. To find out how CallCare can assist your organisation in improving its customer service, get in touch with our friendly team today.