Consumer activism is officially here (and customers are prepared to vote with their money)
Consumers in the modern world have more free access to information and news spreads faster than ever before. This, combined with a 24 hour news cycle, means they can more readily assess the performance of the brands they buy from and how that aligns to what they value.
‘Belief driven’ buyers are an increasing trend, with 57% of global buyers choosing to buy from or bin a brand based on how that brand demonstrates commitments on issues the consumer cares about. How issues are prioritised depends on the consumer segment, however ethical business practices, such as closing gender pay gaps, being environmentally conscious and impacts to humanity are increasingly important.
With the rise of social media, consumers have also begun to realise their collective power to call brands and leaders to account. This combined with the trend of consumers trusting their peers more than brands makes social and digital conversation even more crucial to business success. Recent examples include Barnaby Joyce’s conduct, the revelations of the banking royal commission, Billabong and the World Surf League gender pay outrage, Sainsbury’s artist advert, Tony Robbins and the #metoo scandal, Cricket Australia ball tampering, the growing discontent about violence against women and sporting codes, criticism of milk processors and farmgate milk prices and the gun reform debate in the US.
Consumer trust in brands is fraying and is it any wonder?
Many big brands who have relied heavily on market domination as a way to maintain marketshare whilst being complacent about how they are demonstrating their values are ripe for disruption. Recent examples illustrate how it’s no longer good enough to have commitment statements touting the values you aim to achieve or support if your business practices are not aligned.
For example, sponsoring international women’s day events whilst still having a gender employee pay gap in your business or asking women to work for free is simply unacceptable to the modern consumer. They view it as ‘lip service’ and disengage quickly. On the flip side, brands who pre-emptively review and re-align their practices to their commitments and consumer sentiment will gain stronger consumer trust. Smart brands have already started doing this. Take, for example, Medibank who recently pulled its carbon polluting and tobacco investments, because it didn’t align to their ‘commitment to the health and wellbeing’ of customers.
People recognise that money is power and they are expecting brands to invest in a socially conscious way. This push towards ethics and transparency is being driven by the millennial consumer. Interestingly, whilst younger consumers are realising their power to publicly call businesses to account and millennials are the master of this, they’re also more likely to simply change brands without warning or communication. The ‘silent boycott’, as it has been dubbed, presents serious risk to brands who are reactionary as opposed to focused on implementing a long-term vision their customers care about.
How damaging is public scandal to a brand in the modern world?
It depends on a number of factors including the type of scandal and how the business or leader responds to it, however it can irrefutably go south very, very quickly – particularly if the consumer senses the brand is being disingenuous in their management of it. Brands are far better off being proactive than reactive.
Although increasingly less tolerant of brands who miss the mark on important social issues, it’s not to suggest that consumers expect brands to be completely immune to error. People generally understand that human beings are not perfect and sometimes good intentions can get lost in translation. The days of making an apologetic statement, re-affirming your ‘commitments’ and waiting for it all to blow over have officially come to an end, however. The adage that ‘action speaks louder than words’ is reverberating louder amongst consumers than ever before. Brands are subsequently expected to own their mistakes and genuinely set about fixing them.
What can businesses do to ensure they don’t become the latest casualty to consumer activism?
1. Appreciate the power consumers hold and how consumer sentiment influences buying behaviour
A brand is only as powerful as the customers who buy from it – never be complacent about that. Think carefully about your ideal buyers, their pain points and the issues they care about. Show how much you care through implementation instead of chit chat.
2. Identify the long-term value you can add to customers rather than what you can get out of them
Think beyond the every day. How can you actively invest in making the future brighter for your customers? Align your efforts and offering accordingly – they will reward you with loyalty.
3. Review your commitments and business practices regularly
Prioritise doing business in a way that actively demonstrates your values and never sway from this standard.
4. Evaluate where you are putting your money
It’s more important than ever to ensure you have adequate checks in place to evaluate where your money is going and how that impacts the issues your consumers care about – think suppliers, sponsorships, affiliations and investments.
If you have any further questions or need help with reviewing the way you do business, please don’t hesitate to get in touch.