It feels timely that, as I sit down to write this blog, we are in the middle of another heatwave here in the UK. We are not yet into July, but this is the second heatwave of the summer already, with temperatures smashing previous June records. Meanwhile, across the Channel, the whole of Europe is sweltering under elevated heat.
If we needed any reminding about climate change, here is another example of it knocking on our windows. Extreme weather simply isn’t rare anymore. Whether it’s heatwave, flood, storm, drought or wildfire, the effects of climate change are hitting an ever-greater number of people’s lives.
Climate change and the customer
This makes it increasingly important for organisations to take account of climate shifts and how they may impact the customer experience. Our latest research, Boiling Point – Customer Service in the Age of Climate Change, lays this bare – with the full depth of insight to be unveiled at our upcoming launch event for members. We surveyed over 1,000 consumers and 500 employees to get the latest perspectives on the topic – with half of consumers saying their daily lives have been impacted by extreme weather events in the last two years, with 18% experiencing ‘serious’ disruption.
Even more significantly, 72% said that an organisation’s responsiveness and customer service in the context of an extreme weather event resulted in them trusting the organisation more. Conversely, 66% agreed that poor customer service during an extreme weather event would make them consider switching provider if they had the choice.
In short, dealing with the effects of climate change – anticipating disruptive events, building organisational resilience in infrastructure, systems and services, communicating with customers, and responding quickly to unfolding events – has become an important aspect of the customer service agenda.
This applies to certain sectors in particular, with consumers in our research believing that energy suppliers, healthcare providers, water companies and supermarkets should be especially well-prepared to cope with the impact of extreme weather events.
However, as the impact of climate change increases, all sectors will feel the impacts and will need to increase both their operational planning and their support and advice to customers accordingly. Transport, housing, local government, insurance, retail to name but a few are all set to see, or are already seeing, significant shifts. The winners of tomorrow will be the organisations that gain the trust of customers by anticipating and mitigating the effects of climate change on products and services, as well as by helping their customers make informed sustainability choices.
Are customers prepared to pay more?
When it comes to consumer preparedness to choose greener or environmentally conscious products and services, we see a mixed picture:
- 28% strongly support action to tackle climate change and accept that this may mean higher costs/prices
- 21% support action to tackle climate change but say it must be affordable for customers
- 30% are highly cost-conscious and put financial concerns ahead of action on climate change
- 21% are uncommitted and express uncertain views
This shows that around 70% of consumers are yet to be persuaded to pay significantly more for goods and services for sustainability reasons. That said, 62% said they were prepared to pay more for at least one commonly used product or service to reduce its harmful environmental impact. However, the average premium customers said they would be prepared to pay was only 4.6% – a modest increase that would not give organisations much scope to cover additional costs.
In summary, it’s a complex and still emerging picture. No doubt, the political agenda plays into public views as well. Internationally – very much led out of the current US administration – there has been something of a rowing back from what we might describe as a ‘pure ESG’ mindset. At home, different political parties espouse quite different views. For the consumer, it can be a confusing issue to navigate.
Stepping up to the plate
That is why businesses are stepping up, and certainly from the conversations I am having with the many boardrooms I am fortunate to hear from, they do care and see this as key to their overall strategies, although there is always more to do. And our research shows that employees want their organisations to do still more. Nearly two-thirds (65%) believe their organisation needs to do more to be environmentally sustainable, while over a third (38%) indicate that an understanding of the relevance of climate change and environmental sustainability to their job has become more important in the last 1-2 years. At the same time, a quarter of employees say they engage directly with customers at least monthly on issues concerning environmental sustainability.
There is a clear need, therefore, for organisations to ensure they are equipping staff with the knowledge and tools to engage with this topic. Doing so has also the potential to build employee engagement: amongst employees who are aware that their organisation has a Net Zero or sustainability strategy, three-quarters say it makes them feel more connected to their organisation.
With investors increasingly expecting organisations to evidence a strategy to address climate risks and sustainability for long-term value, and with a growing array of regulatory and reporting requirements to comply with too, the time has come for businesses to integrate climate and sustainability into their customer strategies. For those that get it right, it could become a differentiator that strengthens the brand, organisational reputation and customer trust.
Those that don’t act, however, could find themselves increasingly feeling the heat of customer dissatisfaction, investor disengagement and regulatory scrutiny – rather like being stuck in a hot office without air-conditioning on a day of ninety-degree temperatures!
Related Posts
