CX giants are starting to feel the regressive effects of rising inflation and a slowing economy. Several large tech corporations have all reported hits to their business during the past few weeks. One CX giant suffered a 21 per cent decline in revenue during the last quarter.
As we go deeper into the inflationary cycle, costs begin to increase, leaving consumers with less spending power than before. This leaves companies with a smaller profit margin than before with which to operate.
Furthermore, a CEO admitted that his company is now experiencing prolonged deal cycles as more decision-makers scrutinize tech investments due to rising costs and dwindling profit margins.
However, increased scrutiny of tech investments does not mean a complete derailment in tech expansion.
How are companies responding?
Companies must provide CX, regardless of the economic conditions. Hence they are far more particular and cautious about the type of investments they are making.
Organizations are now investing in CX technology that can help them navigate challenging economic times by reducing operating costs and turning complex backend operations into more agile, efficient operations.
What type of technologies are companies investing in?
Hence why AI-driven automation is becoming the preferred investment for many CX companies. For example, one major tech provider has launched a conversational AI “studio” that can optimize the testing and deployment of omnichannel bots.
Furthermore, many CX operators are accelerating their move to the cloud to guarantee their savings. In fact, key cloud operators are losing out to their competitors who are offering leaner, more cost-efficient services. This would help them navigate a shrinking industry as organizations see a slowdown in consumer demand.
What do the economic forecasts indicate?
According to the CEO of a prominent company, not all industries serviced by CX companies have been affected the same. For example, consumer goods, retail, and communications were most impacted by the recent inflationary cycle, while financial services, energy, and high tech have remained consistent in their demand.
Regardless of the industry, CX providers will be feeling the effects of a regressive economy and must plan accordingly through smart prudent investment. It would help them navigate a challenging scenario.