The rise and rise of customer expectations
It is no secret that customers want more than they have ever had. ‘More’ comes in the form of greater value for money, of higher and quicker availability and of greater functionality. But it also comes in the form of a higher aspiration; that the product they buy is produced in a way that is acceptable to them. In ethical terms, it is sourced in a way that is ‘right and good’; customers want more than just ‘cheap, available and better’.
For a producer or seller of a commodity, this presents a strategic challenge. Why is this shift occurring, and where might focus be applied to anticipate and gain competitive advantages from it?
Customers like business integrity, and this is not a new desire. Brand studies have told us for decades that they have always valued it. Business integrity is not just about the utility of products, the robustness of assets and the strength of a balance sheet; it is now also about how business is done. And a customer’s view of how business is done has undergone two significant shifts in the last decade:
- Expectations across a wide range of ethical, social and environmental factors have become more connected and focused. They continue to elevate in mainstream consciousness, courtesy of our collective ability to exchange viewpoints, expectations and information; and
- A customer’s ability to see into and through the supply chain has increased, courtesy of the very same collective ability.
To expect that these trends will somehow flatten, or even dissipate, is counter-intuitive. It is more realistic to anticipate that expectations, and the onus of proof that they are met, will increase. The direction of the expectation is up rather than down.
Today, customers are increasingly empowered to voice their expectations, and to query if they are met. They ask three simple questions:
- Do you honour my values?
- How do I know you are doing that?
- If you can’t show me, who else can?
For a business, particularly in industries such as manufacturing for cars, phones, appliances, infrastructure components and others, a tepid answer on the first two invites the third question. Competitive ground is potentially lost when this happens.
For companies to foster and maintain competitive advantages, they must understand the current and emerging customer values. Next, they must be clear on what standards should be met to honour those values. They must then seek positive proof, where possible, that those standards are being met. Lastly, they must be prepared to present this proof – and not just the assertion – transparently to their customers, and their customers’ customers. And this is because, in a rapidly expanding world of information and misinformation, customers are becoming more cynical of claims made.
If these four steps cannot be taken authentically, it should be expected that any competitor company that can do so will entice the customer away. In the customer stewardship agenda the product, and the way the product is brought into being, are two sides of the same customer value proposition.