“In a hyper connected, knowledge sharing economy, companies must reinvent and significantly enhance or replace their existing processes in order to be a relevant part of this customer revolution.”
– Vala Afshar, Chief Digital Evangelist, SalesForce
Thanks to the innovation and proliferation of the Internet, today’s consumer landscape is different than ever before – and it continues to evolve at a rapid pace. Customers are empowered like never before, with an unprecedented amount of information available to them at all times. Digital innovations like the social networks, powerful mobile devices, and cloud computing have created customers that are more savvy than ever before when it comes to researching, selecting, and purchasing products.
Not unrelated, large businesses with firmly entrenched processes based on tried-and-true methodologies of eras past are finding it increasingly difficult to attract and retain customers. Often, a hesitancy to adopt and integrate digital solutions is a major factor. No matter what industry you are in, digital does affect and will continue to affect your business with increased significance year-over-year for the foreseeable future.
The most successful businesses in the coming years and decades will be the ones who are best able to quickly understand and adapt to the shifting digital consumer environment of the American and global economies. In this article you will find four of the most important characteristics to understand about today’s new breed of customer – and the potential implications for your business.
1. The modern consumer is CONNECTED
The customer of today is online – they are using their home computers, their smartphones, their tablets, and their wearables to stay informed and up-to-date 24/7. 73% of Americans report going online daily, with 21% reporting being online “almost constantly” – and it should come as no surprise that those numbers are on the rise. As digital continues its conquest of the consumer landscape, the average customer is becoming more and more expectant of a seamless digital experience across many industries. These customers expect full service without ever having to speak to a real person. This does not apply only to the realm of B2C sales. 30% of B2B buyers in 2015 completed at least half of their work purchases online, with that figure expected to rise to 56% by 2017.
The takeaway: A significant amount of offline business will move online in the near future. This business will be won by companies that offer sophisticated digital experiences.
2. The modern consumer is THOROUGH
The connected customer results in a thorough customer – and this means new pressure on prices and margins. Comparing prices, reading product reviews, and seeking out authentic content from real users is all at your customer’s fingertips. Some 81% of shoppers research online before buying, while 61% read online product reviews. Unless your existing digital presence and customer experience are both great, consumers will be able to quickly and easily find a competitor who does it better. Again, the heightened competition caused by the digital revolution does not apply just to B2C industries. 94% of B2B buyers do their research online before making purchasing decisions, even if their purchase is ultimately made offline.
The takeaway: It’s easier than ever for your customer to do research and for competitors to take your business. Digital business solutions are a proactive means to retaining current customers and attracting new ones.
3. The modern consumer is WARY
The consumer of today won’t take your word for it. A Nielsen study showed that customers are increasingly skeptical of traditional advertising, with confidence declining rapidly in ads on television (down 24%), in magazines (down 20%), and in newspapers (down 25%). Overall, only 47% of customers trust traditional advertising. While digital advertising is faring significantly better, still only 58% of customers trust “owned media,” such as messages on company websites.
Where digital marketing truly shines is in the realm of “earned media,” such as word-of-mouth and personal recommendations. The same Nielsen study showed that an astounding 92% of consumers trust earned media above all other forms of advertising, making it easily the most trusted form of advertising. A distant second, at a still-impressive 70%, is online customer reviews.
If you think there is only so much one can do to influence earned media, you need to be introduced to user-generated content. One of the hottest trends in digital marketing today, brands across many industries are leveraging UGC to get the authenticity of earned media with the control of paid advertising. Especially among younger demographics, UGC is considered more trustworthy, more memorable, and more influential on purchase than any other form of media.
The takeaway: Trust in traditional advertising is falling, while trust in earned media is growing. Brands can effectively use user-generated content to win the trust of the modern customer.
4. The modern consumer is VOCAL
Today’s customers are more vocal than ever before. With an unprecedented and always growing number of ways for customers to voice their opinions – from Facebook and Twitter, to Yelp and Google, to Amazon and more – it has never been this easy to hear and be heard (for better or for worse).
While this is intimidating to many, the empowerment of the modern consumer is a massive opportunity for all businesses. The authentic expressions of consumers who have already used a service or product is highly valuable to prospective buyers – much more so than traditional advertising, as explained in the last section. What’s surprising, then, is that while 83% of satisfied customers are willing to refer products and services, only 29% ultimately do. Many businesses are missing an opportunity to find and amplify the voices of their best customers in an effort to appeal to new potential customers with authentic earned media.
It is estimated that marketing-induced consumer-to-consumer word-of-mouth generates more than twice the sales of paid advertising. Furthermore, referred customers have a 16% higher lifetime value compared with other customers. Meanwhile, a 12% increase in brand advocacy can generate twice as much revenue and growth while boosting market share. Investing in a digital system that supports referrals and word-of-mouth simply makes sense from an ROI perspective.
The takeaway: Customers want to be heard. By actively engaging with them, you can mitigate negative experiences and promote positive experiences to grow your brand advocacy.
What It Means For Your Business
“Digital content is becoming a deal breaker for consumers (especially younger buyers) who are looking for information online. Companies that aren’t there with answers to prospects’ questions will fall off the radar, while brands that anticipate questions and provide useful resources will win brand awareness and, eventually, conversions.”
– Lauren Kay, Marketing Editor, Brafton Inc.
The new digital global economy is constantly evolving and the modern consumer is the beneficiary. Transparency is at an all-time high – research, comparison, and purchasing have never been easier thanks to innovative digital tools.
Businesses must invest in digital solutions to keep stride with today’s empowered customers. High-performing websites, mobile applications, and custom enterprise software allow businesses to be proactive in keeping their audiences connected and informed, which customers will repay with trust and public praise – which, in turn, generates more leads.
The data collected by these digital solutions can be analyzed to better understand your audiences, so that you know exactly when and how to engage customers. The true value of digital lies in the ability to measure, analyze, and always improve. It might be more complicated than it used to be, but it’s more effective, too.