A guest post by Nick Rowley, who leads the Marketear Limited team in helping companies’ transition to a truly customer focused approach.
In the last decade two undeniable truths have emerged:
- Consumer behaviour drives commerce – which the Enterprise depends on
- The Enterprise has to adapt to the new order or perish
Social Media burst in to visibility thanks in large part to the explosion of the web and has galvanised consumer opinion across disparate individuals and communities who otherwise were unlikely to be known to each other. But Social Media itself is only a single dimension of Consumer Behaviour. Consumer Behaviour has always been in evidence, be it nurture, environment, responses to advertising, disposable income, peer pressure or need, to name but a few examples. These components and more, had been islands of influence, but are now inextricably linked and are creating a massive energy field that the Enterprise has to embrace. Likened to Pandora’s box, once opened, there is no turning back, the Consumer Behaviour ecosystem will only become more deeply integrated and influential.
Some, 250,000 people watched ‘United Breaks Guitars ‘ on YouTube, before United Airlines saw fit to do the right thing for Dave Carroll; but was that really any different to the Libyans gathering in Martyrs’ Square to demand Gadaffi be overthrown? A protest yes, but not a consumer decision influencing mechanism. The question is, would ‘United’ have done anything without the aggregated power consumers unknown to each other, committed to fair play?
With consumers having choice and significant voice, now backed up by influential muscle, no longer can companies adopt a dismissive or reactive culture. Choices for the consumer are becoming far more granular, across the full spectrum of products and services they consume, right down to the basic utilities flowing into one’s home, the consumer can now choose which supplier and the type of product/service being provided. So how do they decide? No longer the billboard, the clever TV advertising campaign, the most ‘liked’ supplier on Facebook, or other sensory receptor open to supplier manipulation – the consumer has taken control and sovereignty.
Consumer Behaviour is all about the consumer exercising independent choice, which multiplied out by us all (we are all consumers), awards business to enterprises. It can be transitorily fickle – such as when we all boycotted Starbucks for a millisecond when we discovered it was not paying taxes – but it can’t be tamed. Like water rushing downhill, there is not only the inevitable direction to it but significant energy, which provides the opportunity to be used constructively, but is all too often interpreted destructively or obstructively. It is the role of the enterprise to invest far more energy and resources than they have done previously, in understanding how to work with these new forces.
Taking a simple example. If an insurance business interacts with its customers through their preferred channels, using competent resources, it will almost certainly provide a better experience, for customer and company alike, leading to a reduction in costs. Reduced costs offers bigger profits. But wait. If you are communicating in a way the customer wants, they are likely to be happier. A happy customer is way more inclined to increase loyalty, reducing churn and more disposed to promote the company, encouraging others to your product/service. It gets better still, happy customers complain less, meaning your customer service operations can deal with real problems rather than noise. Fewer, more focused queries, will – with quality staff – deliver higher staff morale and that in turn reduces staff turnover, promoting lower costs (decreasing the need for recruiting and training) and driving a more experienced workforce.
It is easy to see how doing the right things for customers positively impacts so many functions in a business, with the potential for a virtuous circle of benefits, and all from a shared cultural disposition toward Consumer Behaviour; it is however more often a vicious circle where the initial disregard for the customer triggers almost the exact opposite of the positives just described.
So, if it is not the business’s actions, in a positive sense, influencing the consumer, what other than the negative or indifferent actions of the business is determining Consumer Behaviour?
The main drivers:
- Activity levels: The sheer volume of mainstream personal administration, (number of transactions per capita per annum), for example credit cards, store cards, mobiles, utilities, insurance, e-commerce etc. etc., have increased 100 fold since 1975, eroding the consumers personal time and showcasing a growing spectrum of sub-optimal service styles.
- Accessibility: All aspects of accessibility have or are moving in the Consumers favour:
- Availability: Some form of 24 x 7 is becoming the standard
- Channel: Alternatives emerging, though not necessarily by current provider(s).
- Access Device: Choices available according to user preference and nature of interaction required.
- Digital Communications: Enables mobility and time independent access.
- Free Information repositories: Have promoted two key behaviour modifications:
- A mindset geared to research
- An expectation of immediate responses across all access points
- Social connectivity: From casual interaction to more meaningful business related relationships, consumers are discovering a new source of trusted advisors, bypassing the traditional corporate advisor. Social connectivity is also competing for the consumers valuable time, given it is a generally a more pleasant experience.
- Rate of Change: The requirements of the customer/consumer are already moving faster than the ability of the business to change, unduly pressurising the quality and timing of decisions.
There are many secondary drivers contributing to the changes in consumer behaviour, but most can be tracked back to the five main drivers identified, thus consolidating the shift in the balance of power to the consumer.
It follows that the corporate world is increasingly being shaped from the outside in, even though business continues to focus its changes from the inside out. So how long can the business world ignore this imperative, continuing with ‘more of the same’?
The reality is somewhat obvious, not long at all, dependent on their industry and position in that industry; however, the operational and cultural changes required to move to the new paradigm are significant and require experienced practitioners with the correct balance of tools and techniques to work with an organisation’s specific issues.
Marketear Limited provides the necessary thought leadership, through to programme ownership, delivery, support and on-going mentorship.
How prepared is your organisation for this most significant change?
Nick Rowley is MD of Marketear
07768 715 715 or firstname.lastname@example.org
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Trevor Lee – EP International
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