Nielsen: responsible brands are big business
Far from being a ‘nice to have’ brands that demonstrate a commitment to sustainability now have real meaning for consumers and the resultant ability to provide healthy returns for manufacturers and retailers alike. Evidence of this is the 2015 Nielsen Global Corporate Sustainability Report which shows that 68 percent of South African consumers are willing to pay more for brands that come from companies who are committed to positive social and environmental impact. This in comparison to 66 percent of global respondents, which in turn is up from 55 percent in 2014 and 50 percent in 2013.
These findings stem from a Nielsen poll of 30,000 consumers in 60 countries during which consumers were asked how much influence factors such as the environment, packaging, price, marketing, and organic or health and wellness claims had on their consumer-goods purchase decisions.
Nielsen Africa Managing Director Allen Burch said: “Sustainability is a worldwide concern that continues to gain momentum—especially in countries where growing populations are putting additional stress on the environment. An increasing number of consumers in developed regions consider sustainability actions more of an imperative than a value-add.
“Consumer brands that haven’t embraced sustainability are at risk on many fronts. Social responsibility is a critical part of proactive reputation management and companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners, and importantly, consumers.”
This is also clear from additional findings on the South African market where in response to the question; “Thinking about the consumable brands purchased in the last week, how much influence did the following factors have on your purchase decision?” 65 percent of respondents stated that the products were made by a brand/company that they could trust; 57 percent said because the product was known for its health and wellness benefits and 53 percent said because it was made from fresh, natural and/or organic ingredients.
Another interesting insight to emerge from the study is that it’s also no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. Consumers across regions, income levels, and categories are willing to pay more, if doing so ensures they remain loyal to their values. Sustainability sentiment is particularly consistent across income levels. On a broader scale this has seen sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4 percent globally, while those without grew less than 1 percent.
Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62 percent) consumers globally was brand trust.
Nielsen Senior Vice President for Reputation and Public Relations Solutions Carol Gstalder commented: “This indicates an opportunity for consumer-goods brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth. On the flip side, large global consumer-goods brands that ignore sustainability, increase reputational and business risk. This may give competitors of all sizes, the opportunity to build trust with the predominantly young, socially- conscious consumer looking for products that align with their values.”
Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the last 100 years, they continue to be most willing to pay extra for sustainable offerings—almost three-out-of-four respondents (73 percent) in the latest findings, up from approximately half in 2014. The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more was equally strong—from 55 percent of total respondents in 2014 to 72 percent in 2015.
Brands that therefore establish a reputation for social responsibility and environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too.
Health and wellness
Consumers are looking for products that are both good for them and good for society. A product’s health and wellness benefits are influential purchase decision drivers for more than half of survey respondents (59 percent). Products made with fresh, natural, and/or organic ingredients carry similar weight with consumers (57 percent). Finding opportunities to bridge the two is a powerful and impactful way to connect with consumers.
When it comes to sales intent, commitment to the environment has the power to sway product purchase for 45 percent of consumers surveyed. Commitment to either social value or the consumer’s community are also important (each influencing 43 percent and 41 percent of respondents, respectively). Retail data backs up the importance of these influencers. In 2014, 65 percent of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value.
It’s clear that the hierarchy among drivers of consumer loyalty and brand performance is changing. Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers and consumer-goods’ brands that fail to take this into account will likely fall behind.
TV ads highlighting a company’s commitment to positive social and/or environmental impact are influential in the path to purchase for 34 percent of global respondents. Brands that actively reinforce societal commitment must amplify and socialize their message using multiple sources and distribution channels.
Gstalder adds; “While marketing good deeds is encouraged and expected by consumers, authenticity and credibility are essential. Using multiple communication methods is important to demonstrate good deeds, such as third-party validation (news coverage), annual reports, affiliation with a respected non-profit or civic organization, employee volunteerism, advertising, or reporting actual work in the community on a web site. A balanced approach is key for brand communicators, with the emphasis on demonstrating good deeds versus self-serving promotion. ”
Developed vs Developing Markets
While the relative importance of sustainable factors that influence the path to purchase is consistent across regions, the overall rates were lower in North America and Europe than in the Middle East, Africa, Asia, and Latin America. Consumers in developing markets are often closer to and more aware of the needs in their surrounding communities as they are reminded daily of the challenges around them, which leads to a desire to give back and help others. This suggests a greater likelihood to seek out and pay more for sustainable products.
When it comes to sustainability, the findings show it is generally harder to influence consumers in developed markets to pay more. Consumers in Latin America, Asia, Middle East, and Africa are 23 percent-29 percent more willing to pay a premium for sustainable offerings.
Re-defining the economics of CX in the new customer journey
There’s no shortage of customer service channels for the enterprise to select from today. Regardless of the many new metrics that have emerged – such as customer success, or empathy – cost reduction is still a primary driver in selection criteria.
There are many articles dedicated to how companies can turn customer service and customer experience (CX) from a cost to a revenue centre. The problem is, if you stop there and don’t look beyond cost reduction, you’re limiting the scope for CX to become an even bigger economic contributor in the enterprise.
There is every opportunity for customer service and CX to significantly influence the front end of business, particularly amongst direct-to-consumer subscription-based products and services, such as popular streaming services like Netflix, Amazon, Disney+, as well as sports subscription services like DAZN.
In these products and services and others, there are new customer journeys that may drive business growth and revenue. They start earlier and may last a lifetime, so getting things right at the start of the journey is key so that customers have the best experience from day one.
Not only will this help in making customers less likely to reach out for issues-based support further down the line, but these customers will be much less likely to churn, and much more likely to take up new services as they are offered throughout the lifetime journey.
So, what does the new customer journey look like for these services?
Opportunity waiting for the likes of Netflix & Disney
While consumers may have previously regarded customer service as a way to mitigate the inconveniences in their lives, the customer journey is expanding in scope every day. Today there are many more touchpoints available that put CX in a position to drive revenue.
For one-off purchases, traditional CX deployments have not changed significantly in the past few years. However, if you look at the change in the CX relationships we’re seeing with subscription-based products and services, particularly media-based streaming services, it’s clear that these companies lead what quickly become very multifaceted relationships with their customers. These have serious potential to evolve over time for increased economic benefit.
For any sort of subscription-based business, customer lifetime value is paramount, and the requirement to actively manage a continued positive customer experience is critical.
Every interaction is an opportunity, and every data point is a chance to offer more value. Introductory offers can convert to longtime customers. Longtime customers may take up opportunities to upgrade to more premium products or services. They may also appreciate incentives to invite family and friends to become customers. Consumers who like a particular service, for example, may appreciate a recommendation for another similar or complimentary service.
It all starts with customer interaction, and the customer experience journey becomes an opportunity to strategically affect the user base and resulting revenue - which is a far cry from the limitations of call center cost reduction or churn metrics.
How do companies support the new customer journey?
More and more, customers look at the new customer journey as engaging with brands as part of their lifestyles. Many companies are making brand ambassadors available before the traditional customer journey even starts, which is a marked change from a purely transactional relationship associated with a one-off purchase.
These ambassadors, who are often independent users of products or services, are providing trusted pre-sales advice, and that same trusted advice can also function to nurture the customer journey in a subscription-based relationship. Call it ‘GigCX’ or ‘crowdsourced customer service’ or even ‘peer-to-peer customer service’ - it doesn’t matter.
The key is in providing impartial, trusted advice from real users. Think about it: who would you rather get advice from? Someone who has used a product or service extensively, or someone who has been trained to provide customer service surrounding that product or service?
For services such as streaming media, advice from trusted experts with real product know-how could be invaluable. This may not be limited to technical issues, such as what to do when you can’t access your favourite show, or how to access services across various devices. It could be parents helping other parents who are concerned about how to restrict adult content from child viewers, or simply customers who have similar taste in programming who can comment on the benefits of upgraded or premium products. The point is, these experts are easily available at any touchpoint in the customer lifetime journey, creating more chances to add value.
It’s also about tipping customers from ‘passive’ to ‘promoter’ in the NPS scale. It’s an opportunity to turn neutral customers who may be vulnerable to competitive offerings into loyal enthusiasts who will keep buying and referring others, fuelling growth. It may ultimately help drive even further revenue by creating customers that are helping to sell the brand itself.
And, while chatbots and automation may play a key role, they are often not able to handle the more complex support needed in the new customer journey. Conversational AI is rarely as conversational as it claims to be, and in the new customer journey, most companies are finding that a mix of automation and people-centric service is an ideal way to nurture the many new touchpoints created.
It’s no longer about trying to replace human capital with automation: it’s about orchestrating a uniquely personalised CX, and proactively engaging during the customer lifecycle to enhance the experience, and to create more long-term value.
At the moment, we’re only seeing the tip of the iceberg in terms of the power to affect the economics introduced by the new customer journey. We’ll no doubt see this evolve rapidly particularly amongst streaming companies as they use human-centric connections in CX to support the full potential of customer lifetime value.
About Roger Beadle
Roger Beadle is an entrepreneur and business leader who is reinventing how customer service is delivered via the gig economy. After establishing several businesses in the contact centre industry, Roger co-founded Limitless with Megan Neale in 2016. Limitless is a gig-economy platform that addresses some of the biggest challenges faced by the contact center industry: low pay, high attrition and access to new talent. Previously, Roger and Megan helped to build one of the largest privately-owned outsourced contact center business in Europe, before selling the business to the global conglomerate Hinduja Group. Roger is an outspoken proponent of digital ethics, worker’s rights and the ‘good-gig:’ which encapsulates gig work for incremental pay versus full time work, skilled gig work, no unpaid time/downtime and zero expenses.
Named a Rising Star at Deloitte’s Technology Fast 50 program, Limitless is a gig customer service platform, combining crowdsourcing and AI to help global businesses address their biggest customer service challenges – rising costs, increasing attrition, variability in demand and the need for diversity. Brands like Microsoft, Unilever, Daily Mail Group and Postmates are using Limitless’ SmartCrowdTM technology to connect with their most engaged customers, and reward them for providing on-demand customer service that can flex in line with demand. Limitless is one of the world’s first global tech platforms to introduce localised platform terms to protect the rights of its gigging workers. Backed by AlbionVC, Downing Ventures and Unilever Ventures, Limitless is empowering people worldwide to earn money for providing brilliant customer service for the brands they love.