The “post recession” consumer

Experian’s latest report refers to a “seismic shift in consumer behaviour” stating that the recession has caused even the most affluent of consumers to reflect on their spending. The company states that over half of consumers surveyed have switched from a supplier in the last year due to “poor or indifferent” service; and indicates that customer experience, referrals, value, and green considerations will be the major influencing factors on consumer loyalty and spending moving forward. Research undertaken by Loudhouse concurs with this prediction; when recently polling consumers about why they would remain loyal to a company 65% cited because of ‘past good experiences’, 53% ‘good reputation’, and 51% ‘offers best prices’.

There is no doubt that customers make purchasing decisions more slowly and deliberately in an uncertain economy; however their decision processes are further influenced by the proliferation of cost comparison websites and abundance of customer reviews via social networking sites and blogs which are serving to radically transform consumer pre-purchase research.

Today’s customers have unprecedented access to information on companies; technology is facilitating the sharing of this information outside of their immediate network; and they are compelled and empowered to voice their views on their experiences with suppliers. Recommendations and referrals have become core criteria of a customer’s purchasing decision; in the same research Loudhouse found that 69% of consumers most value word-of-mouth recommendations from friends and family. In this environment candid customer reviews in the public domain can help make or break a brand.

This shift in consumer behaviour is causing many companies to increase their focus and efforts on enhancing the customer experience, so as to build loyalty, and transform their most valuable and loyal customers into brand advocates.