Customer behaviour is changing, and the speed at which it is altering has resulted in customer decisions becoming less transparent. Given the current scenario, how does one keep up with this disruptive trend, re-think the basis of competition and customise one’s business model to win the battle of growth? What is very evident is, old frameworks and business models are not going to work. It is now time for a new approach that involves a multi-dimensional framework that can engage the new ‘multi-dimensional customer’. KPMG in India, in collaboration with its member firms, sought to present a new way of thinking by way of a report titled ‘Me, My Life, My Wallet’. The report is a framework about the changing customer, in line with today’s needs and also explores in depth what is it that companies today must identify, and work on, so as to understand and respond to today’s demanding customer.
Below are three dimensions, basis which customers today make decisions. These include the Five Mys Framework, customer wallets and generational surfing, all of which help navigate the complexity of consumer decision making.
The Five Mys Framework 1. My Motivation – Trust, authenticity and social values are critical but intangible motivators of the choices today’s consumers make. This means our best experiences have become expectations, and we no longer just compare a company to its competitors but to whosoever sets the standard for our best experience as consumers. This means customers value peer reviews and social references, and a majority of them today believe individual influencers than companies, a fact that can be attested to the fact that as many as 41 per cent of Indians trust online reviews, according to the report.
2. My Attention – The fight for consumer attention has never been more intense. This has been further exacerbated by unprecedented volumes of content at our fingertips.
As an example, there is more media created in 60 seconds that can be consumed in a lifetime according to the report. Understanding how individual customers prioritise and marshal their time and attention is essential to break through the chaos to build deeper and more meaningful relationships.
3. My Connection – Today’s technology connects humans to information and each other 24/7, driving shifts in our social interactions and behaviour. Understanding the shape and patterns of the wide-ranging digital connections and networks is central to understanding how decisions are influenced.
4. My Watch – The companies that understand the constraints of time and anticipate how they change across life events are best placed to engage customers in the moments of greatest impact and meet their expectations head on.
Forty-eight per cent of professionals in India are ready to forgo a top position with high salary for flexible working arrangements, according to the KPMG International report. How we balance the constraints of time, and how that changes across life events, can help engage with customers at the greatest time of impact.
5. My Wallet – Here again how consumers adjust their share of wallet across life stages and pivotal life events is changing and causing a ripple effect of change across not one but all categories to which they allocate their money. Thirty-five per cent of Indian millennials identify their parents as their source of income compared to 22 per cent globally. How much money we have, how we choose to allocate it and our attitude towards it shifts based on myriad factors, not just our salary or age.
Customer wallets When, where, how and why we spend is becoming increasingly complex, and this calls for a new way of thinking about the interrelationship among income, borrowing, savings and spend.
As an example, the report found that consumers stress the importance of budgeting but then show a willingness to forgo value in favour of convenience or self-improvement.
Generational surfing For years, companies have used age as a proxy to determine our spending power, likely needs and relative attractiveness as customers. But things are no longer happening at the same time, or in the same order, as with earlier generations.
Buying a home is a life event where age assumptions are fast becoming invalid. Globally, according to the report, the proportion of millennials living with their parents has surged to 38 per cent and as high as 68 per cent in India.
To conclude, change isn’t looming in the distance, instead it’s the reality being faced by companies all over the world. No company, regardless of maturity of the sector, is immune to these forces and comparative pressures.
-Authored by Aditya Rath, Partner, Management Consulting, KPMG in India