The Changing Consumer

The relentless march of technology and new communication channels means that the consumer has more power than ever before. For boards, it’s a case of being brave in deciding on a strategy which delivers a clear message on how the business is going to stay the pace as expectations and buying patterns constantly evolve.

Kerstin Mogull, COO of BBC Future Media, says: “An organisation’s ability to transform itself is more important than ever, and that may mean the processes we have; how we manage people, technology, infrastructure and a whole range of elements. Now, transformation, however, is a very big word and in my mind the essential element –  in terms of leading organisations – is to be clear on the direction.”

Some big decisions have to be made by boards based on the diversification and fragmentation of markets, especially when this is put into a global perspective. Ian Wright, Corporate Relations Director at Diageo, says: “This has important implications because you have to make choices; you simply haven’t got the resources to address them all. So you have to decide first of all who are the most important for you, who are the most value creating for your business and then go after them pretty ruthlessly; I think that’s the biggest single change.”

Andrew Moore, Executive Managing Director of clothing retailer, George, agrees: “Retailers have to ask themselves: what are they going to be?… Should they be providing an excellent service through a small number of channels or a mediocre service through all channels? Is it possible to provide an excellent service through all channels, cost-effectively and profitably? I’m not sure.”

Clearly, the opportunity to gather intelligence has also grown dramatically. “Customer data does have a  big role to play,” says Andrew. “We have enormous amounts of information on our customers, but data won’t provide you necessarily with the answers. It will provide you with the questions and the only way you’re going to find out the answers is actually by interrogating further and talking to customers and testing things.”

With this, there has to be the acceptance that ‘right answers’ are something of a moving target. Ian says: “It actually makes instinct and insight even more important and the thing I think I’ve learned in the last three or four years is that knowledge of the past isn’t a predictor of the future. So you can condition yourself to be flexible enough to know that you’ve got to think in a particular way, but don’t expect people to behave tomorrow as they behaved yesterday.”

Face the music

The speed at which a brand and reputation can be tarnished or irretrievably ruined has rapidly picked up and so organisations can’t be lazy or slow when it comes to relationships and communication. Tony Cocker, Chief Executive of energy company E.ON UK, says: “We use the technology to help to give the customer a better experience in the simple things that we can do today… and really make that a much better experience…
“Hopefully… they will trust us to provide those services and will buy [other] services from us. The first step is to do the simple stuff and then move into the more complex areas once you’ve built the trust.”

Kerstin says: “Making things simple is sometimes very hard…  Look at Apple, one of the keys to their success is their products are easy to use, being both instinctive and intuitive. That makes a huge difference. It always starts with the consumer, there’s no question about that, but the consumer moves fast today and that means that we have to be very agile.”

It’s no wonder that businesses are struggling to be fit for purpose in this complex environment. Andrew explains: “The most important thing is the distinction between intentions and actions. Businesses can intend to do certain things… and proclaim points of differentiation, but they’ll be found out very quickly if they don’t carry that through. Information is so immediate, so responsive, that if retailers or any businesses are found to be wanting against the standards that they set themselves, then that goes to the heart of the credibility of their message and what it is that they want to do.”

This cuts right across sectors. Richard Ackroyd, Chief Executive of Scottish Water, says: “There’s been quite a substantial change around people demanding things being done quickly and that, to me, is the biggest shift. Whereas it used to be acceptable to say to a customer with a problem, ‘We’ll be around in three days’ time,’ it clearly no longer is. Customers demand an almost instantaneous response, and they also need the information that goes with that.

“On a daily basis there are a few consequences of this more demanding customer in that hardly any customer interaction is done in writing these days, even over email.  It’s done verbally because that’s faster and it’s more instantaneous.”

Tim Godwin, Former Deputy Commissioner at The Metropolitan Police, explains: “The consumerism, in terms of the experience with private sector providers, has meant that there is a far greater expectation on public services in terms of speed, accuracy, the quality of service and the quality of customer care that is given. As a result, public services are being measured against private sector companies for the customer care, which has actually meant a significant challenge and a rethink to the public services as to how they deliver that.”

Those organisations which put the consumer first, in terms of strategy and culture, as opposed to just marketing slogans, are going to be in a strong position. It’s about investment too, in technology and people, so that you don’t get left behind but, underlying all of this, is the understanding that you have to be flexible enough to switch strategies if the game is changing.

The very best organisation will, of course, be a step ahead of the rest. Andrew says: “It also requires businesses to try and predict where the consumer is going to be in two, three, four, five years’ time, and it was much easier to do that 20-years ago.”

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon.

Matthew

www.twitter.com/criticaleyeuk

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