Whether you pick an economic pundit or a social commentator, you’ll be hard-pressed to find anyone who disagrees that consumers are experiencing a once-in-a-generation level of change in everyday life.
Record high inflation, economic downturns, and widespread geopolitical uncertainty are combining to create unprecedented challenges that many consumers haven’t faced before.
Consumers are uncertain, exhausted, and fearing for their financial future. But the extent to which the turbulence has been affecting their bill paying behavior — and their wider relationships with communications service providers (CSPs) over the past year — has largely been anecdotal. Until now.
Hope Amid the Hardship
The Symend 2023 Consumer Report — based on a survey of consumers across North America — has revealed the depth and intensity of the struggle being endured by so many during the past year.
Inevitably, this struggle has been negatively affecting consumers’ sense of security, their state of mind, and their general decision-making: especially when it comes to transacting and engaging with CSPs, among other providers competing for consumer mindshare.
Consumers are uncertain, exhausted, and fearing their financial future.
But along with these worrying findings, the report delivers insights into how service providers can help alleviate stresses being faced by their customers, while improving their economic situations and generally protecting their mental wellbeing.
In many ways, the report represents a collective call for understanding, empathy, and help from consumers. It’s a call that comes with a clear articulation of the next steps CSPs need to take. But before setting these out in detail, let’s take a look at four major challenges consumers are facing.
1. Mental health
The toll of economic and social pressures on consumers’ mental health and day-to-day lives is revealed in the report.
Seven out of 10 consumers (70%) say being treated poorly by their provider affects their mental health while almost eight out of 10 (79%) say they expect more support from their provider during periods of financial uncertainty.
These stats are just the tip of the iceberg. They represent a consistent trend seen throughout our report and highlight the impact that the company-customer relationships can have on a CSP’s bottom line.
For example, 40% of consumers feel they are treated negatively by service providers when they are behind on their bills: and 87% of those who feel this way are less likely to purchase additional products or services, with 78% indicating that they are more likely to consider changing service providers.
The report finds those CSPs that take consumers’ mental health into account and respond with an empathetic approach to engagement during today’s cost of living crisis, are well-positioned to address late bill payers’ pain points to the benefit of both parties.
2. Financial worries
A clear red flag to service providers stands out in the report. More consumers are having difficulty keeping up with their bills. Three in five (60%) say they have either fallen behind on bills in the last 12 months or expect to do so in the near future, compared to 47% in 2022.
What’s more, almost three quarters (74%) say they are currently struggling to manage competing financial obligations. The number of those who say their financial priorities have changed often or very often in the last 12 months also grew to 50% in 2023 from 43% in 2022.
A key takeaway? Financial insecurity compounded by fears about future risk is a day-to-day reality for many of CSPs’ customers. And there are some clear indications of how this is increasingly affecting their behavior. For example, 80% admit they find it difficult to make quick and effective financial decisions, up from 66% in 2022.
3. Scarcity mindset
More generally, the confluence of actual and perceived lack of financial resources speaks to another real challenge facing consumers: a scarcity mindset.
A scarcity mindset is when perceived or real resource limitations, perhaps around time or money, inhibit a person’s ability to effectively make decisions and prioritize.
In other words, actual money worries and the perception of more financial struggles to come can impede the ability of some consumers to make decisions that are in their own best interests.
This mindset can lead consumers to make suboptimal choices. Case in point: the report reveals 85% of those who are behind on payments are more likely to avoid direct contact with their service providers, while 80% are more likely to avoid opening or acting on digital messages.
Unchecked, this state of mind can have negative impacts for both consumers and the service providers they deal with. Like missing out on great offers that save money, enhance the service, and build in loyalty and revenues. Or conversely facing disconnects, past-due bills sent to collections, and “firing” customers.
4. Digital and decision fatigue
Compounding this is the fact that consumers are also facing the need to adapt to the “always on” digitalized world.
This reality is worsening as we continue to become even more connected online. In fact, consumers who say they feel overwhelmed and anxious when they receive messages and notifications from service providers, skyrocketed from 48% in 2022 to 71% in 2023: a jump of 48% in one year.
When there are limited funds and a need to pay multiple service providers, consumers face hard decisions.
Overall, 90% of consumers are typically positive about interacting with service providers digitally. However, 40% will try and speak with a human if the digital experience is time-consuming or difficult. More than two-thirds (68%) say the number one reason they stop interacting with their provider digitally is because their needs aren’t being met.
Digital fatigue, multiplied by incessant general demands on customers’ time, appears to be generating another type of exhaustion: decision fatigue. This occurs when people experience cognitive overload that impedes their ability to effectively evaluate and make decisions.
When there are limited funds and a need to pay multiple service providers, consumers face hard decisions. According to our research, the top three factors that most influence which bills consumers prioritize are the availability of flexible payment options (69%), the risk of losing access to a product or service (65%), and late fees (55%).
...it’s time for CSPs to align their engagement strategies with individual customers’ preferences and motivations.
To pay down a bill or prioritize payments, the report finds consumers will make a partial payment (65%); seek ways to lower the cost of their services (50%); reach out to their service provider for support (50%); and look into digital tools like payment arrangements or extensions (46%). It is also important to note that one-in-five (21%) say they won’t make a payment until they can pay in full.
Service or account suspensions also influenced consumers’ decisions. Of the billpayers surveyed, 45% have experienced a service or account suspension in the last two years with around half (52%) saying they are now more likely to keep up with bill payments.
However, more than one-third (37%) say they are changing the service provider and not using them again, while around the same number (36%) say they are avoiding direct contact with this service provider.
Having a glimpse into how consumers prioritize bill payment enables service providers to help their customers avoid decision fatigue and make decisions that are in their best interest.
How CSPs can Help
What can service providers do to help customers make positive decisions that improve their lives? The overarching takeaway is that customer engagement needs to reflect an understanding of their challenges.
Ultimately, it’s time for CSPs to align their engagement strategies with individual customers’ preferences and motivations. This is where behavioral science can play an important role. As the science of decision-making, behavioral science allows them to deeply understand, empathize, and motivate their customers toward a mutually beneficial outcome.
Clarity and Practicality
Let’s start with some practical requests, straight from consumers. Amid the cost-of-living crisis, the top three things consumers told us they need from a service provider to help them more easily and confidently manage their bill payments are:
- Information on flexible payment options available (59%).
- Knowledge of financial assistance programs available in their area (49%).
- The option to speak to a real person if needed (48%).
Others include clear explanations of charges or reasons for a bill, clarity on next steps or actions required, self-serve options, and earlier or timelier reminders.
While these efforts can be costly, they offer CSPs a unique opportunity to stand out from competitors, and better support their customers with their preferred digital approach. CSPs can also benefit from greater adoption of digital communication, reduced call support volume and costs with decreased bad debt, and improved customer affinity and lifetime value.
Personalize, Personalize, Personalize
Every communication, interaction, and solution should be tailored to reflect individuals’ needs. In fact, consumers especially value personalized service when they’re behind on bill payments. The report finds 60% like having the flexibility to choose how they want to manage their outstanding balance, while more than half (54%) value solutions that fit their specific needs. Further, more than half (52%) say personalized service makes them feel like a valued customer.
Volume, Frequency, and Channel
Think long and hard about the volume, frequency, and channel with which you engage each customer. Even well-meaning communications seeking to provide help and guidance can add to digital fatigue. Indeed, more than one-third (34%) of those consumers behind in their bills say they will leave a service provider if they receive too many messages or phone calls.
Tone and Timeliness
Unnecessary urgency that ramps up pressure on customers is an instant turn-off too: eroding trust and negating any professions of empathy.
To ensure your engagement evolves with your customers, implement strategies with baked-in adaptability.
Similarly, take note of how your message is crafted: any perceived aggression or lack of authenticity will undermine customer relationships and prevent win-win engagements. It’s worth noting that 82% of consumers say that if they are behind on bills, they are more likely to respond to positive, supportive communications than threats to have their service cut.
The Need for Adaptable Engagement
Here’s a crucial final point. People’s lives, personalities, priorities, and circumstances constantly evolve. So do their reactions and general behaviors. To ensure your engagement evolves with your customers, implement strategies with baked-in adaptability.
This requires ever-changing insights into how customers are making decisions and what is motivating them. That’s why increasing numbers of customer-first organizations are using behavioral science to shape and drive engagements. Those leveraging it in the right way are delivering highly empathetic, personalized communications.
The period of turbulence we are living through may not yet be over. But mindfulness, authentic empathy, and adaptation to customer requirements can build trust, promote positive decision-making, and reinforce customer relationships: regardless of the environment.