With the UK plunged into the cost of living crisis, consumers are being severely impacted by rising prices and businesses are also seeing costs skyrocket. This shift is leading to a host of challenges, with unaffordable bills causing new costs to be passed onto consumers and staff cuts or hiring freezes impacting companies as large as Facebook parent Meta.
An often overlooked but significant challenge many businesses are facing is the rising cost of customer communications, which is impacted heavily by the increasing cost of paper. That’s because energy prices also impact manufacturing.
Two years ago, producing one ton of paper cost around £600. Now, due to the mounting price of gas, it can cost around £2,000, with gas alone representing half of this price. This has a knock-on effect for paper mills, some of which are closing down as they simply can’t produce paper for what it’s selling for – leading to supply chain issues and greater cost hikes, which leads to higher prices.
While it seems like everything is going digital, paper is still a vital tool for communicating with customers, so businesses are reassessing how they use it. In doing so, they can unlock the cost benefits as well as the customer experience enhancements of a more considered approach to communications.
Serving your customers’ needs
Even as communications go digital – with one report claiming 86% of consumers prefer email over direct mail – there will always be a place for physical communications and strategies that incorporate both. With this idea underpinning any digital transformation strategy, you can respond to rising costs by making smarter use of paper.
To better serve your customers, you should consider which channel will best achieve the objective for each communication. Do all my customers need to hear this message, or would we benefit from a more targeted approach?
The ability to offer multiple channels to resolve queries and allow customers to self-serve is vital in the quest to achieve cost efficiency, and fundamentals like using your customer preference data to reduce the reliance on paper is a good starting point. You would be surprised how many organisations find it difficult to join up that communication preference with their current operational capabilities.
Research shows that different content benefits from different forms of delivery. But it’s still very personal – some customers will likely appreciate receiving a physical copy of bank statements or contracts, while some won’t. Often, an email or text message will suffice for promotional content. Sometimes, though, it’s about what will grab your customers’ attention more.
This is especially true if there’s a call to action involved. In the past two years, we have seen direct mail’s role in customer communications change dramatically. It has become a highly effective medium and it can form a trusted entry point to a customer’s digital journey. This route can then lead to an enhanced experience for your customers while releasing cost and carbon efficiencies, as well as reducing the need for physical follow-up as your customer builds a relationship with a brand through their digital experience.
Fundamentally, the cost of living crisis has prompted businesses to reassess their approach to communications, but this doesn’t have to mean losing out. By being forced to focus on cost efficiency, they are devoting more time to unlocking the advantages of an integrated approach to communications, which can see customer engagement skyrocket as a result.