The Biden-Harris administration is once again trying to tackle customer experience issues.
In a move that’s sending ripples through the business world, the administration has launched the “Time Is Money” initiative, targeting practices that waste consumers’ time and money.
The Fight Against Poor Customer Experience
The new initiative takes aim at several time-honored customer pain points, including:
- Cancelling recurring payments and subscriptions, which is often more burdensome than signing up
- Accessing a real human being when calling Customer Service
- Obtaining refunds—not just flight credits—for delayed and canceled flights
- Disallowing the use of AI to create fake online reviews and testimonials
By focusing on reducing customer irritants—like endless hold times and convoluted cancellation processes—the administration is aiming at one half of a strong customer experience (CX) program. Research has shown that both enhancing positives and reducing negatives can improve customers’ perceptions of a company’s CX.
But of the two halves, reducing pain points may prove more valuable. The single most important factor in gaining customer loyalty is reducing customer effort, according to the Harvard Business Review.
The New Regulations: Standard CX Improvements, Not Radical Shifts
The core of the Biden administration’s new rules revolves around customer experience basics. For companies already prioritizing CX, these changes should feel like common sense.
For example, the Federal Trade Commission’s proposed “click to cancel” rule is a straightforward improvement that ensures canceling a subscription is as easy as signing up for one. Similarly, the push to eliminate “doom loops” in customer service by making it easier to speak with a human representative addresses a common consumer pain point.
These measures aren’t radical—they’re standard practices for any customer-centric organization. Companies that have already embraced these principles are likely to find that they’re well-positioned to comply with the new rules without major disruptions.
Not Everyone Is Happy About the Changes
The U.S. Chamber of Commerce immediately released a condemnation of the new initiative, saying it will “cost the American people more time and money.”
“Businesses succeed by being responsive to customers and have a far better track record of customer service, streamlined paperwork, and prompt response times than the federal government,” the release stated, adding that the organization objected to “regulations that micromanage business practices and pricing.”
Yes, many businesses exceed the very low customer experience bar set by the federal government. But while some businesses may view these regulations as burdensome, customer experience leaders know that these changes are long overdue and ultimately beneficial to both consumers and businesses.
And calls for better customer experience have been bipartisan, as both the Biden and Trump administrations have tried to tackle the issue.
Biden-Harris Initiative Continues Customer Experience Focus
President Biden issued an Executive Order in 2021 on “Transforming Customer Experience and Service Delivery” in the U.S. Government.
(Related: Episode 152 of the Experience This! Podcast examines Biden’s Executive Order)
The goal was to improve how the U.S. government interacts with the public by enhancing accessibility, efficiency, and trust. It mandated federal agencies to reduce administrative burdens, streamline processes, and utilize technology to deliver services that are more responsive and equitable.
The order also emphasized human-centered design, interagency collaboration, and the reduction of “time taxes”—the time lost by individuals due to inefficient government processes. It also recommended to:
- Improve service delivery with a focus on customer experience
- Reduce administrative burdens and paperwork
- Utilize technology to modernize government services
- Enhance equity and accessibility for underserved communities
- Foster interagency collaboration to improve service delivery
Additionally, the Biden administration, through the Consumer Financial Protection Bureau, proposed a crackdown on so-called “junk fees” earlier this year – another consumer irritant.
Trump Initiative Also Tried Improving Customer Experience
The “Improving Customer Experience with Federal Services” initiative under the Trump administration likewise aimed to align federal service delivery with private sector standards by modernizing, streamlining, and enhancing the customer experience.
It focused on increasing trust in the federal government by making services more usable and reliable, leveraging digital tools, and improving satisfaction across key services.
Specifically, it aimed to:
- Align federal services with private sector standards
- Focus on usability, reliability, and satisfaction
- Increase trust through improved customer experience
- Leverage technology for service enhancement
The Business Case for Better CX: Why Compliance Is Good for the Bottom Line
While some companies may initially view these new regulations as onerous, the reality is that improving customer experience is good for business. Numerous studies have shown that better CX leads to increased revenue, as measured by more customers who spend more, stay loyal longer, and refer others.
Moreover, improving CX can also reduce costs. By streamlining customer service processes and making it easier for customers to resolve issues on their own, companies can deflect a significant volume of calls and reduce the strain on their customer service teams.
This is especially true when it comes to addressing the problem of “doom loops”—when customers cannot escape an Interactive Voice Response (IVR) system to reach a human being. This not only frustrates customers but also leads to higher operational costs as agents handle more escalated issues. Customers who fall victim “doom loops” often call back and/or try other service channels instead, adding to operational costs.
Calculating the ROI of CX Improvements
Businesses looking to justify the investment in these new CX requirements can calculate their return on investment (ROI). CX improvements can be directly linked to increased revenue and reduced costs.
For example, reducing customer churn by just a few percentage points can have a substantial impact on revenue. Similarly, by improving first contact resolution rates and reducing the need for follow-up interactions, companies can lower their customer service costs.
To calculate the ROI of CX initiatives, businesses should start by identifying key metrics, such as customer lifetime value (CLV), retention rate (or its opposite, churn rate), and cost per contact. By measuring the impact of CX improvements on these metrics, companies can build a strong case for the value of compliance with the new regulations.
Biden-Harris Customer Experience Changes Are a Win-Win for Consumers and Businesses
The Biden administration’s focus on eliminating bad customer service practices is ultimately a win-win for both consumers and businesses. Consumers stand to benefit from a more seamless, less frustrating experience, while businesses can leverage these changes to differentiate themselves in a competitive market.
As competing on price has become a race to the bottom, and competing on product has become nearly impossible given the commoditization of many industries, customer experience has emerged as companies’ biggest competitive advantage.
For companies that are already customer-centric, these regulations offer an opportunity to double down on what they do best. For those that have lagged behind, this is a chance to catch up and create a more loyal customer base.
The bottom line is that better CX is good for everyone—and the businesses that embrace these changes will be the ones that thrive.
Conclusion: Biden-Harris Embracing the Future of Customer Experience
As the Biden administration rolls out these new regulations, businesses should focus not on the challenges but on the opportunities. By improving customer experience, companies can not only comply with the new rules but also set themselves up for long-term success. The future of customer service is one where consumers expect—and receive—transparency, efficiency, and respect for their time. Businesses that deliver on these expectations will find that the benefits far outweigh the costs.
Image by Yogendra Singh from Pixabay.
