There is currently a power struggle occurring between brands and consumers, and consumers appear to be winning. With social media amplifying the voices of consumers more than ever before, many well-established companies are feeling the pressure to innovate in response to rising customer expectations.
So how exactly are consumer expectations changing, and what can well-established brands do to adapt and remain competitive? Turns out, online on-domain communities may be key.
The rise of the superpower customer
Despite what brands may believe, customers have always held the power with their purview to choose where they spend their money. But until the digital age, brands retained the power over their messaging, reputation and marketing efforts.
With the exception of word-of-mouth marketing, historically brands put forth a one-way communication to consumers. Customer complaints were contained within the customer’s small network of friends and family, or in one-off phone calls or letters to the customer service department – and it’s anyone’s guess where those ended up.
Social media has created an equal playing field when it comes to brand communication and reputation. Not only do consumers talk with brands, they also complain and praise them on wide-reaching social networks. This means one consumer now has the ability to influence how millions of others think. Unfortunately, this leaves brands wide open to public shaming, which can critically injure a brand’s reputation, often within hours.
Some disgruntled customers will go to all extents to have their voice heard. The best recent example is the British Airways passenger who, after having his baggage lost, paid $1,000 to have his complaint tweets promoted and thus broadcast to millions of users.
This is an extreme case, but not an isolated incident. Shaming brands into better behaviour or restitution is now something every brand has to be prepared for at all times. Consumers are quick to speak their minds and will not hesitate to hold brands accountable for poor customer experiences.
Digital experiences are putting pressure on traditional brands
With the impressive customer service of digital pioneers like Amazon and the advent of Yelp and Uber, every brand now faces customers who expect that the best customer service experience they’ve ever had at any brand should be replicated at all other brands, regardless of the industry they are in.
This can be a scary prospect, exponentially enlarging a brand’s competitor set far beyond those in their specific space. (And who is to say that this expectation isn’t right? If others can provide exceptional service, it’s hard to explain why your brand can’t). In fact, a recent Harris Poll survey of US businesses shows that a whopping 82% of business leaders said their customers have higher expectations now than compared to just three years ago, with 60% admitting it is difficult to please their customers.
Business leaders must find innovative ways to adapt to the new consumer. Social has also created more discerning customers as they can now conduct research online for just about everything from finding and sharing information, to leaving reviews and insider tips. The digital experience is driving what consumers expect as not just a shopping experience, but a way of life. The Harris poll also found 78% of business leaders believe digital and consumer app brands are setting a new benchmark for ‘customer experiences’ in their industries.
How brands are embracing the superpower consumer
Digital transformation remains just that to many traditional brands – a transformation. But to consumers, it’s an expected and normal way of life. Brands must embrace digital and meet their consumers where they are in order to attract and retain them. One way brands are successfully doing this is through online communities. In fact, a recent study showed that customers who engage with a brand through an online community are significantly more loyal, engaged and satisfied.
The study also revealed that online communities generate a 67% in a brand’s Net Promoter Score (NPS) compared to those customers who are not engaged with the brand socially. In addition to a shift in brand perception and creating customer loyalty, companies that are providing a personalised and consistent digital experience throughout the customer journey are experiencing revenue growth. Social is not just about driving Likes and fans anymore, it’s driving real business results.
One excellent example of this is Sony’s PlayStation Community where fans exchange information, ask and answer questions, get new ideas on games and services, and receive support from each other and a dedicated customer service team. Sony studied the top members of its PlayStation Community and found that 82% visited and purchased from the PlayStation Store – their online site for digital games, music and videos. They found that their most engaged community members were also their biggest spenders, with 80% of their top community members ranking among the company’s elite customers.
Communities give brands the power to evolve their business model
Communities convert shoppers into buyers and even continue to influence consumers long after a visit to the community. Studies have shown that sales conversion approximately doubles after a customer’s first visit to an online community, and can continue to influence up to four times as many shoppers as other social channels within 30 days of a first visit. Community users are also more likely to purchase again, with Millward Brown finding that 79% of visitors intend to purchase again from the company in the future. That’s a full seven percentage points higher than shoppers who don’t engage at all with a company on social media.
The value of a community in helping brands meet rising customer expectations is hard to deny, and many well-established brands are enlisting community as a way to create a central “space” for customers – a place they can interact with each other, not just the brand. In this case, the brand does not own the conversation. Rather, it facilitates a dialogue between customers.
Community helps create a consistent brand experience and a place to “find” the brand regardless of which channel a consumer uses or even if they use a brick-and-mortar location. To meet consumers’ growing demands, brands can implement on-domain communities, and centre their digital strategy on providing a “Total Community” experience where social channels, customer service and community meet. This helps drive loyalty, improve sales and gives brands a way to manage the ever-increasing expectations of today’s digital consumer.