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How brands that give consumers choice and demonstrate they are listening will be best placed to combat the plague of consumer fatigue and indifference.
Asking customers what they want, then doing that thing, might not seem like a ground-breaking idea, but it is surprisingly uncommon
In the years ahead, it will be fair and democratic brands that will be best placed to combat the plague of consumer fatigue and indifference and positively engage their customers.
To set the scene: even one of the world’s most high-profile business sectors – the energy industry – has been troubled by total consumer indifference in recent years. Despite a panoply of companies and tariffs available, the vast majority of the market audience fails to shop for better deals on their gas and electricity.
In the UK, this has led to government intervention in the form of the recently imposed energy price cap. But the cap doesn’t address the real issue, which is consumer indifference not market failure. The better value deals are there, but hardly anyone is buying them. This is why nine small energy brands have failed in the past year. These firms offer the best prices but fail to reach the scale to make the tariffs financially viable.
So how can such brands address indifference and get their customers to engage? In my view, two things are necessary.
Firstly, fairness. The energy price cap is touted as progressive and fair, but it punishes the minority of customers who engage and look for the best energy deals by causing price rises across the board. Since the announcement of the cap, the UK’s big six energy providers have inched their default tariffs as close as possible to the ceiling. It is little wonder the vast majority of households are disengaged.
When it comes to financial brands, there’s no great secret for success through fairness, but there are examples to learn from. Consumer bank First Direct consistently wins awards and is rated best-in-class not because of fancy technology gimmicks or ground-breaking products, but because it treats customers fairly. Like it or not, old-fashioned good customer service tends to make the difference. A customer that feels he or she is getting fair treatment and a good deal is a happy one.
Fairness is an age-old concept that businesses seem to forget about in times of political turbulence and economic insecurity.
This contrasts against widely disliked banks such as RBS that are routinely in the news for failing to help customers affected by fraud, and regularly displaying a ‘computer says no’ type attitude.
Secondly, there’s democratisation. App-only challenger bank Monzo is perhaps the best example of this. As I have written before, at the end of 2018 Monzo achieved a staggering £20m ($25m, €22m) investment from 36,000 customers in under three hours. Such events do not take place in a vacuum. Monzo has an intriguing ability to engage with its customer base through in-app customer service and online forums.
Monzo has democratised elements of its offering by directly asking its customers what they want from the brand. And I don’t mean by holding focus groups, I mean by holding an actual poll on a product decision and implementing the result. For example, back in September 2017 the bank admitted that its fee-free cash withdrawal policy was hurting the business’s financials. It then asked customers to vote on a new fee policy, and duly implemented the most popular choice.
Asking customers what they want, then doing that thing, might not seem like a ground-breaking idea, but it is surprisingly uncommon. The notion of introducing democracy into financial provision is still very much in its infancy. But fairness is an age-old concept that we seem to forget about in times of political turbulence and economic insecurity.
In the future, then, giving consumers the sense that they have a choice, that firms are listening, will pay dividends.