Increasing empowerment of consumers

Description:

Customer empowerment can be explained as companies harnessing the very real but largely untapped power available in their customers. Customers are more willing and able to play a role in the creation and delivery of the products and services they desire in order to get what they want in the way they want it, and at the price they want to pay.

Empowering the customer isn't simply a consumer phenomenon. Business-to-business relationships are increasingly built around shared decision making, data exchanges and cooperative controls.

[3] Customers want the companies to deliver on the old Burger King promise: Your Way, Right Away. And far from trading off quality for a cheaper price, they are becoming painfully adept at identifying the essential quality they want, then trading down to get it at a lower price.

Customers have had some 50 years (growth of consumer knowledge) to learn how to be savvy customers, whether in the consumer economy or as business-to-business clients. They know there's too much supply chasing too little demand.

[2] Consumers are beginning to feel overwhelmed with the sheer volume of marketing messages they receive. From direct mail, e-mail and field marketing to television and radio advertisements, end users field hundreds of marketing messages each day. As a result, they have become far more discerning, actively selecting the most relevant messages and filtering out the obsolete from a fragmented media landscape.

[4] Marketers in the $1 trillion global communications industry are facing unprecedented challenges in building loyalty and retaining customers as cut-throat competition and new service models undercut pricing, prey on lucrative customers and disrupt established markets.

[2] Increased consumer empowerment comes at the expense of customer loyalty. According to the latest DMA/Experian Participation Media report the level of positive responses from past customers has fallen from 43% to 34%, illustrating that customers are far more likely to switch brands.

[4] Gartner, a research firm, estimates that nearly 60 per cent of customers prefer to check themselves whether an item is in stock, often through a self-service kiosk or their mobile phone.

According to NCR, which makes self-service technology, 85 per cent of consumers prefer brands that offer several forms of self-service: online, at kiosks and via mobiles, for example. Sometimes self-service can be more personal, not less.

[1] The legislation announced in June 2008 by the European Consumer Commissioner would see consumers being able to shop for goods and compare prices across Europe for all manner of items - regardless of geography, culture or language.

Enablers:

• The internet presenting an enormous opportunity for both retailers and consumers - expanding the market place for the retailer and providing choice for the consumer
• E-mail becoming a global medium for communication - cheap and allows customers to control the audit trail behind their transactions – order confirmation, etc.
• Automated systems providing customers to control - of time, of place, of the functional matter.
• Free or low-cost interactive digital media channels, social networks, mobile messaging devices, online communities and other forms of content-rich engagement redefining customer experience
• Customers have grown increasingly used to self-service devices. Many consumers, especially younger generation who grew up with the internet, like doing things themselves
• Companies being keen on self-service due to its low cost
• Products are Turned into Services[1]

Inhibitors:

• Barriers for online retailers when deciding how to communicate with thousands of customers across multiple countries and in many languages

Paradigms:

The customer raises the bar. Management lowers operating budgets. How do we do more with less?

Web Resources:

• [1] M2 Presswire, 25 June 2008, MTPWProposed EU Legislation For Online Retailing Will Require True Pan-European Customer Service Says Numero; Legislation Advocates Consumer Choice and Empowerment. Retrieved September 14, 2009:http://global.factiva.com/
• [2] Marketing Week, 4 July 2008, INTERACTIVE: A place at the top table, Retrieved September 14, 2009:http://global.factiva.com/

• [3] Schaaf, D., 1996, And now, customer empowerment
• [4] New Zealand Herald, 10 July 2009, Are you being self-served?, Retrieved September 14, 2009:http://global.factiva.com/