The Covid-19 pandemic has changed many aspects of businesses, from moving to work from home to halted travel plans, to online communication. Here are 5 shifts in customer business relationships brought on by the pandemic.
Around 61% of small-medium businesses in the Asia Pacific region have reported a fall in sales and 29% of businesses are receiving state financial assistance due to Covid-19. The pandemic has caused a lot of business to pivot into a new direction or move to a different platform. One of the biggest challenges that businesses have had to adapt and adjust to is customer expectations.
Companies are being forced to initiate significant changes to their customer service in order to keep up with new demands, leading them to innovate in their customer relationship strategy. Many companies have reallocated their priorities, resources, and goals to survive the crisis, here are five ways customer business relationships are shifting.
1. Prioritising Communication and Customer Demand
With most people staying safe at home, many business owners are thinking of new ways to communicate with their existing customer base. Social media usage by businesses and other individuals has increased up to 60%. To make sure each of their customers are still aware of their services and products, around 45% of small businesses have pivoted towards live streaming. Whether it is through immediate live selling or introducing or testing out a product, the e-commerce live stream industry is expected to hit US$129 billion this year alone. Although used as a form of advertisement, many audiences view livestreams as a source of entertainment. Businesses are able to retain loyal customers through interactions during the stream such as answering questions about their product to reassure their choice of purchase.
2. Embracing the Online Customer Experience
With many aspects of people’s lives shifted online, businesses must ride the digital train in order to compete with existing online stores, and also to continue to increase their sales. Even grocery stores are switching to using online platforms, gaining more than a 300% jump in online sales. Many businesses are also investing in delivery- last mile delivery allows customers to quickly deliver items from a warehouse to their doorstep. This form of delivery has become an industry standard expected by customers: reliable, safe, and quick. If a company fails to provide or complete a delivery, customers will shop elsewhere.
3. Data Driven Customer Retention
On average, an individual will create 1.7MB worth of data. Currently, new customers cost 5 times more to convert compared to retaining loyal customers. With customers more likely to shift from one business to another, companies are emphasising data analysis in order to keep their existing clients. The more data a business has access to, the more accurate these insights will be, which will allow them to adapt to an individual’s purchasing behavior. This will also keep your customers satisfied, boosting loyalty and retention rates. Collect, store, and analyse data to create more personalised ads and messaging. This will make stronger bonds with your customers, which leads to more sales and referrals. Not only does data help with customer retention, but it can also help companies better prepare for emergency preparedness and planning. With this new data driven path, many businesses also need to prioritise digital security and the protection of consumers’ data, with the expectation that online transactions and activities will continue to increase towards the future.
4. Direct to Consumer Brands
With live streaming trending, many businesses are leaning towards creating digital media and marketing content on their own. Direct to consumer (DTC) brands are cutting out the middleman, like department stores or online marketplaces, and creating their own online platforms. With many small businesses gaining prevalence on social media sites like Instagram and Facebook marketplace, the explosion of DTC brands has empowered businesses to build strong customer relationships, rooted in competitive prices and the ability to adapt.
5. Alignment with Customer Values
The shift towards a more customer-centric approach has made building a trusting relationship more important. Since consumers are willing to purchase from brands that are aligned with their values and priorities, many businesses need to understand those values and make it their focus in order to establish trust, and a loyal customer base. As 71% of consumers prefer buying from companies that align with their values, more than 66% of individuals have shunned companies from either a post or scandal that misaligns with their values. Many businesses need to reevaluate their consumer data to understand and adjust on how their brand value can play a role in consumer experiences and the customer business relationships, as just one misaligned marketing campaign could result in a significant drop in customers and following.