Boosted by technology and changing expectations, consumers are increasingly setting the business agenda
An upmarket Manchester restaurant hit the headlines recently when it responded to a customer complaint with a vitriolic social media attack on the complainer. The stunt backfired in a way that might have seemed unimaginable a couple of decades ago and the restaurant’s reputation was wrung out online.
Customers have become as crucial a part of business success as the board of directors itself, and are beginning to define brands and business direction.
According to PwC’s 2015 Global CEO Survey, when asked to identify disruptive trends in their industry over the next five years, 72 per cent of UK chief executives cited changes in customer behaviour, compared with 61 per cent of their global peers. This was seen as the biggest single disruptive trend, followed by changes in core technologies of production or service provision.
Understanding the customer is key to success, says Alistair Smit, chief executive of smart energy meter company, Blueberry Home Solutions.
His company developed the Blueberry Smart Hub as a direct result of customer-led technology aspiration and deployment. “As more and more customers aspire to own smartwatches, the R&D team are using these – Samsung Gears – to develop and test the hub, the world’s first hub to measure real-time boiler fuel consumption,” says Mr Smit.
Blueberry’s research and development team are planning to test on Apple smartwatches. “The key to the success of the hub is that it shares its loyalty with the loyalty the customer has to his or her smartwatch. So Apple early-adopters remain Apple fans for life.”
Customer trends are key to every aspect of the company’s R&D, says Mr Smit. “So, for example, we know that the number of mobile phones is now higher than PCs, 64 per cent of internet traffic is done using a mobile and, on average, people check their mobile every six minutes, people use mobile apps six times more than websites, and 73 per cent of business owners use mobile apps daily,” he says. Following the customers’ lead seems to be working. The Essex-based company started just seven months ago and is on target to hit £2 million in orders this year.
To drive transformation, the company did something very simple, but incredibly powerful – we asked customers what they wanted
“Customer experience is behind everything we do,” says Dean Lamble, chief executive of financial services company SunLife, part of AXA. “When I joined the business a little over two years ago, we embarked on a major transformation, launching new products, refreshing the brand, overhauling the digital experience and trying to bring to financial services what is severely lacking – a ‘retail experience’ where everything is designed around the customer’s needs and experience,” he says.
“To drive that transformation, the company did something very simple, but incredibly powerful – we asked customers what they wanted from financial services. Their answer? Straightforward, affordable products and a clear, straightforward experience. We now look, sound and feel like a company making financial services more straightforward and accessible to all.
“We ask our customers their thoughts at every stage, from pre-product design, through to customer testing, post-purchase surveys and ongoing research. Customer insight is key to us as a direct-to-consumer brand.”
As a result, he says, that ruthless focus on customer experience extends from the very first interaction with a customer right through the customer journey. “For example, we pay out 98 per cent of claims within three days,” says Mr Lamble.
SunLife customers said they wanted the application process to be simple and clear. “Some companies routinely ask their customers over 40 questions, which means less than 5 per cent of them complete the application journey,” he says. “We have streamlined this process to fewer than 15 questions which has also resulted in a 200 per cent decrease in the time it takes to apply for cover.”
Moreover, when SunLife launched its savings proposition, customers wanted the chance to beat cash returns, but ensure their money was guaranteed. They also wanted to be able to start and stop paying when they wanted, rather than be tied in.
“We knew there was a large audience of people who were currently excluded from stocks, shares and ISAs because of the high monthly deposits required,” says Mr Lamble, “so we designed a product that lets people invest as little as ten pounds a month, have full flexibility and access the stock market, but with a ten-year money-back guarantee. We also let them name their accounts depending on their savings goal, which means we know why they are personally engaged in saving.”
It’s translating into business success. The company is now the market leader in over-50s life insurance, with more than a 50 per cent market share. “We’ve sold thousands of new policies of products that a year ago didn’t exist. Our awareness and consideration brand metrics rose by 5 per cent each in the last year. And we have one of the highest customer satisfaction scores in the industry at over 97 per cent,” he says.
Online wine retailer Naked Wines has shaken up the wine industry with its angel-funded model. Last month it announced it would be expanding and opening high street stores and tasting rooms. The company, which backs 145 winemakers in 13 countries, shipped 13 million bottles to its customers last year.
“One of the key turning points in Naked Wines came after we watched a TED talk video by Simon Sinek called Start With Why,” says founder Rowan Gormley. “The gist of it is that companies obsess about what they are and how they do business. And that’s wrong. What they should be thinking about is why their business needs to exist in the first place.
“When we applied that test to Naked Wines, the answer was obvious. We are here to make rich people’s wines available to normal people. As soon as we focused around that objective, a whole list of strategic questions had simple answers. Do we need to be the cheapest? No. Do our wines need to taste better, pound-for-pound, than the supermarkets? Absolutely.”
The power of the customer to transform business is as relevant to the little guys as it is to the behemoths, as fast-growing knitwear fashion brand, Wool And The Gang, has discovered.
The brand, founded by designers Aurelie Popper and Jade Harwood, has collaborated with Whistles, Giles Deacon and Christopher Raeburn to create something of a distinguished name for itself. Initially tapping into a growing trend of DIY fashion by selling ready-to-make “knit kits”, the company gathered acclaim quickly through word of mouth as customers began sharing their finished pieces with friends, family and fellow fans.
These talented customers then started approaching the brand to become members of the gang themselves, so by the time Wool And The Gang introduced its ready-to-wear collection, they had a network of knitters who were knitting the garments for new customers. The business grew organically as a result, creating a whole new generation of knitters across the world.
Chief executive Lisa Rodwell says: “This really helped build a core following and we became ‘cool’ almost overnight, with orders quickly rolling in.” Keen to capitalise on this, the company partnered with FedEx to make sure parcels arrive complete with the correct shipping documentation. “Speed to market is essential in our industry, so we need a provider that we can trust to do the job quickly and efficiently,” says Ms Rodwell.
Using FedEx’s international next-day delivery service means the company can be more reactive, tapping into customers’ online shopping expectations. “We know ahead of time exactly what customs clearance fees are likely to be, leaving no unwanted surprises for anyone,” says Ms Rodwell.