Great customer experiences key as London faces brand loyalty crisis due to cost of living crisis
Macroeconomic challenges have impacted businesses and consumers alike, spurring changes to purchasing habits. As a result, 60% of those living in London say they feel less loyal to brands than they did two years ago, according to research of 2,000 people in the UK from ServiceNow.
Financial reasons are regarded as the biggest driver behind this, with half of Londoners spending more now in comparison to 12 months ago, citing rising costs (66%) as the main factor.
Those in the capital also express a greater desire to purchase more luxury products (18%), while many are paying more for products and services as part of a drive to become more sustainable (17%). Only 14% are spending less, and the majority (62%) are doing so to cut back due to the increased cost of living.
“Britain continues to grapple with higher prices, with London the most expensive area to live,” comments Jordi Ferrer, VP & GM UK&I at ServiceNow.
“This is leading to a brand loyalty crisis in the capital. But with operational costs continually rising, cheaper prices aren’t the lasting solution for businesses. Instead, organisations should evaluate things that money can’t necessarily buy.”
“Brands can make a difference by offering a great customer experience, helping them stand out at a time when people have less money and living costs are higher. Those that succeed in improving their customer experience now will have a greater chance of building loyalty for the long term.”
72% of Londoners would be more loyal to businesses that they feel understand them as a customer, while 63% want organisations to invest in technology that improves their experience.
This tech savviness is reflected in preferences, with three-quarters of those living in London using a FinTech bank compared to 58% in the rest of the UK, and 54% regarding a good chatbot service as a vital requirement for brands, compared to 48% nationally.
55% in London would also be happy to spend more to guarantee a seamless service, higher than the national average (41%).
When looking at how brands treat their staff, 71% in London say they would be less likely to engage with a company knowing that their employees were unhappy, higher than the national average (63%).
However, workplace elements Londoners regard as less important include: Salary (important for 47% in London, 63% in the UK); Flexible working (36% in London, 45% in the UK; Employee benefits (33% in London, 37% in the UK); Progression opportunities (27% in London, 32% in the UK).
Other employee aspects that Londoners are more likely to prioritise include optimal technology hardware (21%), good technical support (19%) and workplace perks (19%).
“The line between customer experience and employee experience continues to blur, and organisations need to assess them as one instead of separately,” says Ferrer.
“Treating employees well and giving them the tools and processes to work effectively not only leads to higher productivity but also delivers the service that customers crave, which could be the difference for businesses in extremely tough conditions."
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