Managing demand effectively is the key factor in maintaining brand advocacy. The adage around customer expectations increasing in ‘today’s fast-paced environment’ (which most articles around customer service will tell you in the first line) only tells half the story.

The vast majority of organisations are delivering a fantastic experience to their customers during ‘peace time’ where their capacity to service demand meets or exceeds that demand (and they have the right internal expertise and processes in place).

The other half of the story is that your BAU interactions with customers – while vital – are likely not the limiting factor in any customer satisfaction challenges you face. Not effectively addressing a surge in demand not only leads to missed revenue opportunities as you deal with backlogs, but it can create the need to win back customer trust.

While this is perfectly feasible through the use of a best practice complaints approach, it is more costly than simply getting it right; by this time, your relationship with your customer may have deteriorated to a point where they are no longer a promoter of your business, or possibly no longer a customer.

If your business is able to cope throughout the year, but volumes compromise the customer experience for even a short period, your brand can suffer. So how can we address this? First, we take a consolidated view of the risks:

1. Customer dissatisfaction and negative perception: According to a recent study, 32% of customers would stop doing business with a brand they loved after just one bad experience. In today’s interconnected world, dissatisfied customers are quick to voice their grievances on social media, which means the sentiment of one customer’s experience can be easily spread.
2. Loss of loyalty and market share: Brand loyalty is hard-earned and easily lost. A survey by HubSpot found that 93% of customers are likely to make repeat purchases with companies that offer excellent customer service, underscoring the importance of meeting expectations.
3. Impact on brand equity: Brands that disappoint customers may see a decline in perceived value, which can affect pricing power and profitability. A Deloitte report highlights that 88% of consumers who feel connected to a brand will spend more, but this connection is easily severed when demand is not managed effectively.
4. Operational strain and increased costs: Surges in demand, if not anticipated and managed, can strain operations, leading to increased costs due to expedited shipping, overtime wages, or temporary staffing. This operational strain can result in a greater number of errors, further compounding the issues. A McKinsey study revealed that operational missteps during peak demand periods can increase costs by up to 20%, which in turn affects the bottom line and the ability to invest in future growth.
5. Reputational damage from poor crisis management: In situations where demand spikes unexpectedly, a lack of a robust contingency plan can lead to some quite difficult situations for firms. Companies that fail to communicate effectively during these times risk appearing disorganised or indifferent to customer needs, which can have long-lasting effects on their reputation. The Edelman Trust Barometer indicates that 81% of consumers need to trust a brand to do what is right, and this trust can erode quickly if a brand mishandles demand surges.

Harnessing Demand: Turning Challenges into Opportunities

While the risks of failing to manage demand are significant, the flip side is that effectively managing demand can turn challenges into opportunities to wow your customers and strengthen your brand’s reputation:

1. Proactive demand forecasting and inventory management: Leveraging data analytics and AI-driven forecasting tools allows businesses to predict demand surges accurately. By understanding patterns in consumer behaviour, companies can adjust inventory levels, staffing, and logistics in advance. This proactive approach prevents excessive stock outages and ensures that the right products are available when customers are likely to want them, creating the seamless experience that is the expectation.
2. Agile and responsive customer service: Flexible staffing models and robust training and Agent support ensure that your team is ready to handle increased demand without compromising service quality. Companies that can scale their customer service operations efficiently during peak times are often remembered positively by customers due to service standards remaining high. For example, when Black Friday hits, the media is awash with stories of the ensuing chaos – don’t underestimate the impact of your firm being in full control of this demand. Customers will notice.
3. Effective communication and transparency: Clear communication during demand surges is essential. Informing customers about potential delays, stock levels, or alternative options (and the immediacy of these messages) can turn a potentially negative experience into a positive one. Transparency fosters trust and shows that your brand values its customers. A survey by Accenture found that 73% of consumers prefer brands that use personal information to make their shopping experiences more relevant, which includes transparent communication about product availability.
4. Leveraging technology for operational efficiency: Implementing technologies such as cloud-based inventory systems, AI chatbots, automated supply chain management and advanced workforce and workflow management systems / features can enhance your ability to respond to demand fluctuations dynamically.
5. Creating memorable experiences that wow: By exceeding expectations during peak demand periods, brands can create memorable experiences that stand out. This could be as simple as surprise upgrades, personalised thank-you notes or exclusive offers for loyal customers. Such gestures not only meet demand but create emotional connections that significantly boost brand recall. According to research by Bain & Company, organisations that excel in customer experience grow revenues 4-8% above their market average.

So how do we strengthen brand recall and reputation?

Effectively managing demand is not just about avoiding pitfalls; it’s about capitalising on opportunities to strengthen your brand’s position in the market. When customers are delighted by a seamless experience during peak times, they are more likely to associate your brand with reliability, responsiveness, and exceptional service.

This positive association enhances brand recall, making it more likely that your brand will be top-of-mind when customers make future purchasing decisions. In a crowded market, where products and services can often be similar, the way you handle demand can be a key differentiator that sets your brand apart.

The risks of failing to address a surge in demand are multifaceted, ranging from significant additional cost to longer-term reputational damage. However, by recognising that high demand scenarios are firms’ biggest risk exposure in terms of customer trust, businesses can not only focus on these risks, but also turn them into opportunities to wow customers and strengthen their brand’s recall and reputation.