As a leader, when was the last time you directly interacted with a customer to listen to their feedback and understand what matters most to them?
Hopefully the answer is ‘not long ago’ – but certainly it’s easy for busy leaders and managers to get so wrapped up in deadlines, meetings and emails that they become distanced from the customer and their actual experience of the brand.
Our research shows that consumer behaviours are changing and this makes it more important than ever to listen to customers, with a finger on the pulse of what they are thinking and feeling.
The changing customer landscape
Behaviour is changing in many ways, one of the most obvious being the migration online and the increased use of apps and digital channels. But another important shift is in attitudes towards value and price. Our recent UK Customer Satisfaction Index (UKCSI) found that 36% of customers are now prepared to pay a premium for excellent service and customer experience. Pre-Covid, that figure was only 25%.
This represents a significant movement. Even though many households remain squeezed financially due to the cost of living so that price is certainly a key consideration, more of them are looking at their purchases through a wider lens – including other important determinants such as quality, product life, sustainability and (if it’s a service) the experience that comes with it. These factors together make up value, which is a broader concept than price on its own. It’s about feeling that the deal is fair and represents a good return on the money spent. It also crosses income brackets: more of us want value, whatever our affordability level is.
Alongside this, and as I have discussed before in this blog, there is a definite trend amongst many individuals of consuming and buying less. The age of mass consumerism is, in my opinion, coming to an end or at least entering a new phase. Many individuals are consciously reducing how much they buy, whether that’s for sustainability reasons (lowering the strain on the planet’s resources and reducing waste) or so that they can make what they do buy really count – a ‘less is more’ mentality.
Another factor is the increasing polarisation we see amongst customers. In the UKCSI, in general terms we see a reasonably healthy consumer outlook: nearly half (43%) of customers believe their personal finances will improve over the next 12 months. However, 15% of customers describe their financial health as poor or very poor – and only 19% of these expect their position to be better in a year’s time. It’s a gap that seems to be widening. This means it’s essential for organisations to understand their different customer segments and make sure they’re catering appropriately for all of them.
Listening and responding
Taken together, these trends show that listening to and understanding customers is now in fact a key leadership skill. It’s something I’ll be touching on at our Annual Conference in March when I discuss the importance of connectedness. In our fractured and unpredictable times, brands that create and maintain a sense of connection with their customers will be the ones that win out.
So, ask yourself as a leader: is there more I can do to listen to the customer voice? In my role here at The Institute, I have the pleasure of speaking to many CEOs and organisational leaders, and I see some truly inspiring best practice. For example, the CEO of a financial services business who regularly looks at customer complaints and rings up customers himself to discuss; the leader of a logistics business who makes sure to go out with delivery drivers to see how it is on the front line; and the leadership team of an energy company who spend time every week on the phones.
This kind of practice means that you can really connect with customers and what’s going on in the business. You don’t just understand on a theoretical basis – you see it and feel it too.
There are other ways of keeping connected as well. Is your business staying in touch with customer sentiment through regular surveys and feedback channels? Making use of published research such as the UKCSI? Do you have active customer focus groups and forums? Are you listening to and tracking sentiment on social media, and engaging appropriately there?
Needless to say, it’s not just about listening: acting on what you’re hearing is critical too. It’s important to make sure customers know that you have heard them and that you’re acting on the feedback. “You said… We did…” is a powerful and engaging message that resonates with customers and builds loyalty and trust.
Why not make a resolution to increase the time you spend talking and listening to customers? I don’t think there’s any doubt that doing so will make you a better leader in your business – it’s one of the most powerful and customer-centric things you can do.
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