Here’s a new word for your business dictionary: Skimpflation.
At first glance you might think it’s something to do with the effect of cheapskates on the economy. It’s not, but it’s an interesting concept that I’m sure there’s a word for.
Skimpflation was coined on the NPR program “Planet Money” and was the focus of this Forbes article.
The word describes the deterioration of customer service in our society.
No doubt, you’ve noticed this trend in your own lives. It didn’t start with Covid, but the pandemic caused real labor shortages that have since caused many service-based businesses to reduce offerings.
You don’t have to go far to see it. Where I live there are Starbuck’s that are drive-up only. A few weeks ago, I wrote about how Starbuck’s is continually innovating, citing the coffee giant’s new mega-store in downtown Chicago. But today, in some locations, you can’t even sit down to drink your coffee and surf the internet.
Plenty of other businesses have reduced the hours, or even days, they are open. Many have fewer staff when they are open.
What does that mean for us as business leaders?
Customer experience is more important than ever. Skimpflation irritates customers because they are getting less than they expected.
They will go elsewhere… eventually.
The writer in Forbes points out that simple inertia keeps consumers going back to the same companies over and over, even as the quality of the experience slides.
“Companies that routinely engage in skimpflation count on that inertia, because instead of seeking to maximize customer loyalty, they focus on minimizing customer defections,” he wrote. “And when defection-avoidance is your goal, customer inertia is your friend. A good customer experience is no longer necessary; you just need one that isn’t so awful that it eclipses the inertia and motivates a switch to a competitor.”
Be the business that gives customers a reason to leave your competitor and come to you. The market is just waiting for you to make the invitation.
How do you do that? There’s an investment, to be sure. But it’s more than money. It’s mindset. It’s leadership.
What’s the employee experience at your company?
A big part of Skimpflation is attitude. How are you and your team approaching the challenges of the day? Are you bemoaning the lack of qualified job candidates and the laziness of the ones you have?
That surely isn’t the path to a remarkable experience that develops customer loyalty.
Now’s the time to examine your company culture, your development systems and how you will ensure customer success.