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The Critical Error of Cutting CX and UX Investment During an Economic Downturn

As we find ourselves in the midst of a challenging economic climate, many companies are making drastic cost-cutting measures to assist with short- and long-term survival. In the quest to optimize budgets, some organizations are making the grave mistake of reducing their investment in customer experience (CX) and user experience (UX) efforts. However, history has shown that companies that maintain or even increase their focus on CX and UX during downturns are more likely to emerge stronger and better prepared for the future (see sources and further reading on this below*).

So, why is cutting back on CX and UX investment a mistake? Let’s dive deeper into three compelling reasons.

  1. Customer loyalty is priceless: In times of economic uncertainty, customers tend to become more cautious and selective in their spending. By prioritizing CX and UX, you can create a superior and memorable experience that will encourage customers to stick with your brand despite the downturn. A positive experience not only helps retain existing customers but also builds a foundation for attracting new ones once the economy recovers.
  1. Differentiation in a competitive landscape: As companies tighten their belts, the market becomes more competitive than ever. One way to stand out is by offering exceptional experiences to your customers. By investing in CX and UX, you can provide a seamless, intuitive, and enjoyable interaction with your brand, distinguishing your business from competitors and potentially driving more sales, even in the face of economic challenges.
  1. Long-term growth strategy: Companies that invest in CX and UX during downturns are often better positioned for growth in the long run. By focusing on your customers’ needs and ensuring their satisfaction, you are setting the stage for sustainable success. As the economy improves, those companies that have consistently prioritized CX and UX will have a competitive advantage and a loyal customer base to drive future growth.

History has shown that companies that maintain or even increase their focus on CX and UX during downturns are more likely to emerge stronger and better prepared for the future.

Now is not the time to compromise on the experiences you provide to your customers. Cutting back on CX and UX investments during an economic downturn is a short-sighted decision that could have lasting repercussions on your business’s future success. In fact, investing in a robust user-centered approach as part of your IT projects has been shown to have a Return on Investment of over 300%**, so it actually results in much needed cost savings and a much faster turnaround time on these projects, with higher success rates.

Get in touch with Sand Dollar Design now to learn how you can thrive in the current economic climate and emerge stronger than ever. Our team of experts can help you strategically plan your IT spend and optimize your return on investment even during these challenging times.

*Sources / further reading:

HBR (Harvard Business Review) – Roaring Out of Recession (2000):

In this research conducted by Gulati, Nohria, and Wohlgezogen, the authors analyzed 4,700 public companies across three recession periods (1980-1982, 1990-1991, and 2000-2002). They found that companies that focused on operational efficiency and maintained or increased their investment in customer-centric activities were more likely to outperform their competitors after the recession.


Forbes – Customer Experience: The Best Way To Fight A Recession (2008):

In this Forbes article, the author cites several examples of companies that were able to weather the 2008 recession by maintaining or increasing their focus on customer experience. These companies not only survived but thrived during the economic downturn.


Gartner – How to Prioritize Customer Experience During Economic Downturns (2020):

In this Gartner report, the authors discuss how companies that prioritize customer experience during economic downturns can gain a competitive advantage. The report highlights the importance of maintaining or increasing CX and UX investments to build customer

The Business Value of Design Thinking (IBM) 2018**( highlights the significant impact that design thinking can have on businesses, emphasizing its role in fostering innovation and driving financial growth. By implementing design thinking, organizations can create more user-centric products and services, ultimately leading to enhanced customer satisfaction and increased revenue.

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