People are looking to buy less. For many brands, this has created a conflict: how do they support this new consumer behaviour while maintaining long-term growth when, for so long, they have focused on encouraging increased consumption?
The solution lies in an overhaul of how an organisation thinks and operates. It must go further than grounding sustainability in its offerings and be greater than focusing on what consumers are looking for right now. Only by changing for the better around your customer can you better understand their wants, needs and states, and deliver differentiated experiences that balance mindful consumption and responsible growth. Something which in its own right might present a paradox.
“What if brands helped people to consume less? As customer data and our use of it becomes ever more sophisticated, it is now possible to genuinely personalise customer engagement across the lifetime relationship with positive customer and commercial, but also social and environmental impacts in mind. The role for CX and marketing will be to help customers consume just the right amount of exactly what they need.”
Tom Adams
Experience Consulting and Marketing Transformation Leader, PwC UK
Data-driven insights enable brands to deliver personalised recommendations, tailored messaging, and relevant content that resonates with consumers. When implemented correctly, it gives customers the necessary information to make informed purchasing decisions that align with their specific needs and preferences.
However, there remains a vital need for insight, creativity and imagination. While incredibly valuable, organisations need to be careful about over indexing on data, tech and automation which can have a negative effect on human connection and authenticity.
Our CMO study shows organisations that successfully balance this art and science deliver significantly better performance over the long term: better year-on-year improvement in customer experience, greater progress against ESG objectives, and twice as likely to see stronger revenue growth and brand performance.
This requires a more holistic approach to managing customer relationships, from data ownership and journey management, to a completely connected end-to-end customer relationship.
“The goal of organisations today is to capture customer interactions, connect them to their history, regardless of device or source and deliver an immediate, personalised, seamless experience. The challenge is finding the right technology and operating models to stay ahead of competition and abreast of technology developments like GPT and AI.”
Shobana Rajamani
Partner, PwC UK
The right technology solution gives organisations better insights into existing and potential customers, allowing them to deliver truly personalised service and nudge individuals towards mindful consumption. This is in everything from customer data platforms (CDP) to real time customer experience management technologies that bring together a single view of the customer, their behaviours, preferences and opinions that allow a business to identify and act on ways to improve customer experience.
By embracing AI and GPT these CDPs now have the intelligence, decisioning and analytics to add even more power to the customer experience by allowing scale, automation and much larger data sets around content, products, price, offers and messaging to give more choice and variety to every customer. The beauty is that the customer shouldn’t even know that this is happening, and the value to the organisation is increased sales and retention.
Yet this accelerated move towards technology, and particularly the onset of Generative AI and other tech advancements raises an interesting paradox to navigate.
With the rise of AI, it will become evermore important to think about ‘machine-to-machine marketing’. Brands may need to consider how to influence the algorithms that support responses to consumers' natural language questions. The challenge will be to ensure that a brand, product or service is included in the natural language response over other possible alternatives. While this will still require an element of personalisation, harnessing this to make a marketing-driven recommendation may be increasingly dependent on blending technology with creativity. Today, GenAI is built to interact with humans in examples like ChatGPT. But imagine the possibilities once GenAI is able to directly access APIs for marketing and experience execution.
Any attempt to nudge consumers towards more considered purchasing behaviours must be underpinned by trust and transparency.
By being open about data collection, storage, and usage, businesses can build trust and forge even greater connections, and influence, with their customers.This additional transparency helps ensure data privacy, maintain ethical standards, and build long-term relationships based on honesty and respect.
Because responsible growth depends on building distinctive, personal, engaging and coherent experiences, it’s essential to use customer data responsibly while respecting customer privacy.
That means making sure customers feel their data is always being used in their best interest. Encouraging them to consume less of something can reinforce this message, particularly when combined with data-driven insights to serve customers better and improve their experience, rather than pushing them into unnecessary or irrelevant communications or purchase journeys.
Take the Financial Services sector. Embedded finance is a way of seamlessly integrating the right financial services offerings to consumers at the right time and in a way they expect. While this can significantly improve customer experience and allow a customer to purchase an item they may previously have thought out of bounds, it must be managed responsibly. On the one hand, embedded finance creates seamlessness and a coherent experience but, on the other hand, there is a danger that easily available finance makes it too easy for people to spend beyond their means. A true customer-driven approach, backed by the right data, insight and platforms, allows financial institutions to help support customers to spend without encouraging over-consumption.
The end of third-party cookies next year makes maintaining trust, transparency and privacy more of a challenge. Yet ambitious organisations view it as an opportunity.
“Understanding how you currently use third-party cookies helps frame the scale of the challenge you will face in 2024, which should be supplemented with an assessment of your own first-party data, technology and operations. This information can then be used to build a roadmap for change, including how you will build out your first-party customer data in a way that feels transparent and fair to those customers.”
Sam Tomlinson
Partner, PwC UK
Third-party cookie deprecation creates an imperative to build up first party customer data. And the benefits go beyond marketing communications. The better data you have around customer demand, the better you can manage supply. Increased first party data and the ability to anticipate demand through greater insight should have a positive impact on manufacturing, stock holding and distribution. By using customer data to more accurately predict demand, you can avoid overproduction, inefficient storage and distribution and stock wastage - something that saves resources, energy, money and improves sustainability performance.
With almost half of UK CEOs looking to increase sustainability across their business this year, and the demand for ESG initiatives, low-carbon products and eco-friendly services coming directly from customers, it offers an opportunity to get to grips with the complex inner workings of your supply chain - and fast.
“Data can be a powerful ally in fostering trust between brands and customers, especially when it can be used to increase transparency in the supply chain. Take initiatives such as eco-labeling, traceability, and decarbonisation: by being able to demonstrate these sorts of metrics to consumers, they’re able to make informed decisions around the suitability of that product for their needs. For the business, that visibility helps them turn insight into action.”
Fred Akuffo
Partner, Supply Chain and Operations, PwC UK
Successful teams are already digitising supply chains, using cloud, AI, and machine learning to capture the right information and drive processes efficiently. They’re also combining it with the right people and skills to turn that data into insight that informs actions across the business, allowing every step in the supply chain to be designed with the customer in mind, from manufacturing to fulfilment to delivery.
This presents an opportunity to more accurately and directly connect demand and supply to avoid over consumption and overproduction by encouraging individual customers to consume the right amount for their needs based on their real preferences and situation. There’s also an opportunity to use any data to predictively manage demand forecasting to ensure just enough is made and distributed at the right time, in the right place to ensure certainty of supply, while reducing resource, cost and environmental impacts.
“Cloud is the foundation organisations need to turn data into rich insights if they want to enable smarter, bolder decisions. Those that embrace it will unlock value everywhere - whether that’s more effectively sourcing materials, improving product sustainability, better meeting customer demands, or greater personalisation. But the whole business needs to move to the cloud - not just one function - for a joined up demand and supply future to be possible.”
Rachael Hampton
Partner and Cloud & Sustainability Transformation Leader, PwC UK
Ultimately, if the long-term ambition is to understand and perfectly anticipate and meet customer demand on an individual basis, organisations must think about introducing a data-driven loyalty strategy.
This is about genuinely thinking about the intrinsic and extrinsic rewards to a customer of brand loyalty, which are driven as much by tailoring offers and experiences to the individual, as they are about financial offers and discounts.
If you get loyalty right in the experience, you’re more likely to build a long-term relationship with your customer, which, in turn, will support more efficient and effective customer engagement and higher customer lifetime value.
But many brands are held back from an effective data-driven loyalty strategy because they still lack a coordinated plan around which data to collect, and how to analyse and activate it. Getting that 360-degree view of customers will require asking some challenging questions about who controls customer data and where it should be stored.
From there, it’s essential to have the right people, technologies, and enablers in place - from the right customer data platform to marketing automation and a connected customer experience - to deliver on that strategy. That may require working alongside a trusted partner to fill any gaps in capabilities, expertise or solutions. Technology providers and platform partners can bring external expertise and a deep understanding of data to better guide your strategy, to help uncover the benefits of first-party data and deliver a successful data-driven loyalty strategy.
The paradox for brands now lies in how they reconcile business growth with the imperative to convince consumers to buy less, and better. Brands that can educate and empower individuals to make conscious decisions will not only help consumers operate in the way they want to, but will strengthen reputation, build greater loyalty and deliver long-term responsible growth.
Balance insight, imagination and technology to better understand your customer, differentiate experiences and unlock responsible growth
We combine brilliant ideas, passion and expertise with the power of technology and a unique combination of capabilities - from deep industry knowledge to broader capabilities across tax and deals - to help you change for the better around your customer and to create responsible growth. Whether you’re looking to reinvent your customer experience strategy, transform operations or improve customer insight, we’re with you every step of the way.
Customer Led Transformation Leader, Midlands Consulting and Financial Services Lead, PwC United Kingdom
Tel: +44 (0)7841 567045
