Comment: Customer relationship counselling in the age of the empowered consumer

You may have noticed it; a now empowered consumer has seemingly set new rules on interaction between themselves and retailers. So how to respond to this new age customer? Winged Wheel’s Mike Reisenleiter talks us through a new sales process…

I often notice examples of people forgetting how the balance of power in consumer-retailer interactions has changed in recent years. This time, it was a Facebook post on the World Bicycle Mechanics Forum: “For the first time in 9 years of business, I fired a customer.” I read through the whole post and over fifty of the comments. I stopped when I realised the comments were coming in faster than I could read them.

Here are a couple of key bits from the original post. You can find the rest in the forum:

  • “I quoted him MSRP plus labour, he told me that the quote wasn’t even in the ball park…”
  • “After he committed to this other source, he mentioned that he really wanted to support my shop…”
  • “I fully expect to get a negative review online after I expressed my frustration”
  • “He seemed to really enjoy my attitude prior to the quote, again, we had a great rapport established.”

After reading, I felt really bad for both the consumer and retailer. It isn’t the first time I had felt this way and it won’t be the last. This is the age of the empowered consumer.

Early last year, the World Economic Forum published a great report talking about how the next decade is going to be a “Golden Age of the Consumer.” Consumers will have a greater range of choices and more control over their purchases than ever before. The report details how consumers place values in new factors of a purchase, how loyalty is low and how consumers need guides to sort through the massive amount of information.

With all the increased choices and benefits, empowered consumers have greater leverage than ever before, while manufacturers, suppliers and retailers have less. Let’s use an analogy. The traditional channel for products used to be like a single pipeline of water, flowing from the manufacturer, through the distributor and the retailer, finally ending at the consumer. This meant that those upstream controlled the game. Today, the new channel is more like an ocean: a massive body of water with flows coming in from countless streams and currents moving in every direction. This combination of abundance and chaos takes control from the upstream suppliers; giving the consumer the power to be selective in their purchases.

With our pipeline analogy, consumers made a decision about the value of a product or service based on three things alone: cost, choice and convenience. To a traditional consumer, these were the only three things that seemed flexible. Our modern, empowered consumer has an ocean of choices with falling costs and massive increases in convenience. With so many products and services, consumers increasingly decide value based on factors beyond the traditional options of cost, choice and convenience. New factors that consumers regularly weigh include the buying experience, their internal belief system and their control of the transaction.

As demonstrated by the Facebook post at the start of our story, many businesses have struggled to satisfy and retain these empowered consumers. The retailers and suppliers are competing for a consumer’s attention and we find ourselves in a world where consumer loyalty is nearing all-time lows. As evidence, more than 50% of consumers have changed a provider of a major service in the last year. Even among consumers who identify as loyal to a specific brand, over one third will spend the same amount (or more!) with a competing brand.

Further evidence of low consumer loyalty exists in the very programs that bear the ‘loyalty’ name. When polled, consumers frequently view loyalty programs as a way for brands to show loyalty to their customers. Of course, the businesses who started these same loyalty programs state the goal is to do the exact opposite: they feel their loyalty program keeps the consumer loyal to their brand!

In addition, this overwhelming amount of information makes it incredibly difficult for consumers to make a purchasing decision. This is where empowered consumers love to have a trusted customer service guide. This guide can often be user-generated reviews, a friend who is an expert in the subject matter or the retail staff. The purpose is to help the empowered consumer sort through the information and identify what products/services fit the consumer’s unique situation in order that they can decide for themselves what is best.

Empowered consumers have more choices than ever. They expect businesses to express loyalty to the consumer, and love guides who can help them make decisions. As I like to point out, this consumer looks more like you than you might realise. What are the keys to succeeding with the empowered consumer? Here are three:

Swallow your pride. I’ll use an analogy that every cyclist can understand: when cycling in traffic, you can both be right and be dead. In retail, that means keeping your ego out of any transaction and never taking it personally. For our Facebook poster, when the consumer says they want to do business with you despite the price gap, this is the time to be humble. The consumer isn’t here for you; rather you need to serve them. Be selfless. Focus on the consumer and their needs first. Stop talking. Listen closely.

Be loyal to your consumer. As a retailer, you’re at a disadvantage and that is okay. Be willing to celebrate the purchasing decisions the consumer made, even if it doesn’t include you. If they buy a bike online, celebrate and remind them of your fit services. If they show up on the group ride in a jersey from another store, be happy for them. Even though consumer loyalty is low, we should not misunderstand and simply say consumers cannot be retained. In fact, consumers who are actively engaged with a brand buy nearly twice as often and spend 60% more per transaction. Consumers are proving time and again they have a pattern: they research heavily and seek out partners who help guide them to what is right for their unique situation. If you serve the consumer selflessly, they will become an advocate for you to their networks.

Be empathetic. Even though it can be unpleasant to be haggled or show-roomed, don’t forget this important point: if you have ever bought anything on price, then you are no different than the consumer you are serving. Price matters, but it is rarely the only consideration. Find out what it takes to get the business and focus on added value rather than price. Is there something important beyond price? What will it take to win the business? Finally, if you have to say ‘no’ to a transaction, be absolutely sure you leave the door open to still say ‘yes’ to the person.

Would these three things have saved the consumer and retailer in our Facebook post? Read the post and judge for yourself. There are no guarantees. The consumer and retailer may never have seen eye-to-eye on the bike sale. However, I wager these three points would have helped the two sides to stand down. Which would have saved, rather than ruined, a customer relationship.

Author bio

Mike Reisenleiter brings 20+ years’ experience in product development, business operations, global sales, marketing and retail. Today he serves the trade under the Winged Wheel Development banner where he helps outdoor businesses — big and small — to better connect, inform, and actively engage with their customers