Changing stakeholder perspectives: Consumers
In this Changing Stakeholder Perspectives series, we investigate the ways in which the New Normal – media anarchy, hyper-transparency, and interconnectivity – has fundamentally altered the relationship between businesses and their stakeholders and what this means for corporate reputation and external communications.
In previous blogs, we’ve examined how organisations need to respond to the increasingly far-reaching influence of a diverse set of stakeholders, from employees with the power to publically rate their employers, to investors demanding greater transparency on ESG policies and NGOs able to summon the weight of online opinion for their campaigns. But while no business can afford to ignore the new power being hefted by these groups, for many, the consumer is still king.
In appeasing the customer, many of the themes are common to other types of stakeholder: just as investors want to invest in environmental practices and employees want to share a sense of purpose with their employers, so consumers are more focused on looking for sustainable products and produce; and want to buy from companies with ethical, authentic business practices. But what defines today’s consumers – and what sets them apart from other stakeholder groups – is the desire to be treated as an individual.
For the consumer, the New Normal, with its accelerated degrees of connectivity, is about hyper-personalisation. They want companies to recognise them as unique individuals with specific tastes, preferences and shoe sizes. And once every customer facing business is employing targeted advertising and personalised mailshots, the differentiator becomes immediacy.
Consumers want what they want now, instantly, yesterday if possible. The days of waiting three weeks for a catalogue delivery are dead, and any organisation supplying products with a longer lead time that their competitors will soon find themselves in the same state.
Always a primary stakeholder group, the shift away from the high street to online retail has put consumers firmly in the driving seat. In 2018, the Office for National Statistics reported that one in five pounds taken by UK shops was spent online, making up 18.2% of all retail sales. No longer tied to their local area, shoppers can go where they want on the internet – and leave just as easily.
Competition for their attention is at an all-time high. If transactions take too long, or required the creation of an online account, then they are liable to be abandoned: 25% of US shoppers will quit during checkout when forced to wait, and 31% discard a purchase when asked to set up an account. If they do have to open an account, more than 70% believe it should be active instantaneously; although they won’t accept the sacrifice of security on the altar of speed.
Hyper-personalisation also demands that customer service is decisive, individual, and reflects the consumer’s need to be recognised as a valued customer. These days, consumers are buying the sense that they matter, and solutions to problems, as much as products and services. They want to be understood, to have businesses anticipate their needs, and, should something go wrong, for them to apologise instantly and meaningfully. Similarly, product returns should be seamless and guilt-free.
There’s no mystery about what has gifted online consumers their power: we highlighted the influence of employee review sites in an earlier blog; customer reviews have an almost infinitely greater reach. Among US consumers, customer reviews are nearly 12 times more trusted than manufacturers’ descriptions. According to research by BrightLocal, 52% of 18- to 54-year-olds always read reviews before using a local company. The average consumer spends 14 minutes reading reviews before making a decision – and needs to see 10 positive ones before deciding to trust a business.
In the New Normal, consumers continue to call the shots, but with heightened expectations and shortened patience. The companies that will thrive in this environment will need to be faster and more personalised yet also sensitive to the ever-changing whims of their individual consumers.
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