How tariffs could impact customer service

I’m not going to sugar the pill. If you are a customer service leader, your job is going to get more difficult over the next few months.

Economic uncertainty creates a double-headed challenge for customer service. On the one hand, it drives up customer demand. Customers who are feeling squeezed financially are more likely to query a bill, return a purchase, make an insurance claim, or switch provider. On the other hand, internal budgets get squeezed, constraining resource capacity to handle the additional volumes.

Many customer service leaders are veterans of the 2008 Great Financial Crisis, and the COVID-19 pandemic, so they are used to uncertainty as a standard feature. However, the constantly changing threat of trade tariffs create a new layer of volatility for customer service teams to deal with.

The area most affected by the tariffs will be outsourcing and offshoring of customer service work. On the face of it, there is no direct impact. Only physical goods are covered by tariffs, not services, so US companies will not be charged extra for paying for offshore services. But there are still two factors to consider:

1. Any weakening of the dollar will reduce the buying power of US companies seeking offshore services

2. We don’t yet know if any other protectionist policies will be put in place that might also affect services

Ironically, I think it is likely that we will see companies offshoring more work in spite of these challenges, as a way to save costs in the short term. This is what we saw after the Great Financial Crisis.

Ultimately, it’s hard to predict exactly what will happen. So it’s imperative for customer service leaders to set up their organisations to be able to respond quickly to changes in market conditions. Priorities should include:

• Implementing well-established AI tools that pay for themselves in less than 12 months through productivity gains. For example: pre- and post-call summary, AI knowledge search, and automated QA

• Collaborating closely with Business Process Outsourcers to increase the level of flexibility, and look for win-wins that benefit both organisations

• Predicting and preventing large volumes of contacts that can be driven by economic shocks, by having self-service solutions readily available (for example: a bank is inundated with calls from customers seeking a refund if a travel company goes out of business).

And despite all these challenges, it’s worth remembering that one things prevails: customers will always need service.

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