Boys Boycott & Girls Follow

Competitive Edge operates a site: http://www.consumersentiments.com.au/.

The objective of this site is to raise the awareness of the “lost” customers because of a poor understanding of consumer sentiments, especially in relation to complaint handling and servicing consumers for products or services.

The return on investment of customers who switch brands, do not complain, but cease business or boycott an organisation and its product or service range/ brand is increasing in the e-Age.

As consumers gain the upper hand and develop a quick-fire method of complaining or searching for alternative products or services they can source globally via the Internet, they are demanding greater service and responsiveness

Brand switching from poor complaint resolution is already over 80%, and women are catching up to men in their conversion to boycotting despite having a more optimistic approach to complaints at the outset.

Although many customers were considered “captive” in the traditional marketing world, today they can be “released” to competitors very easily via the Internet and social pages that broadcast alternative offers, approaches, deals, and better service/ quality opportunities for future purchases.
The recent anti-GST campaign is a good example of the retailers mounting a campaign to try to rein in a small percentage of offshore purchasing because of perceived better value by consumers. Instead, it sent a clear message to consumers that they have an opportunity to look at and transact with global competitors. These major retailers, themselves major importers, appealed to the “fair go”, “level playing field”, and “keep it Aussie” values of Australians, only to be re-buffed by the consuming public.
Banks, now second to telecommunication companies in poor complaint handling, are heading down the same path, but differently. Previous consumers captive to credit cards, loan rates for houses, etc. can now go on the Internet and view the total offerings of financial and banking institutions daily. While the money may not go global, the brand switching and the continual cost of transactions as customers leave and arrive at the
e-Bank and traditional bank doorstep, is costing millions, if not billions in the long run.
Add to this the trend to boycotting which has been growing in the market place. Customer Champions, a U.K. based company, reports that “men who are unhappy with how a supplier deals with their complaint will boycott that organisation for an average of 10 years, double the time for women”.
This result is similar for Australia.
In our recent Consumer Sentiments Study in December 2010, we found that:
Seventy-seven percent (77%) of respondents said they would boycott products or services if they were not happy after complaining to a supplier.
Only 6% said they would not boycott the supplier of products or services, and 17% said they were undecided.
Forty-three percent (43%) of male consumers and 33% of female consumers would boycott between 5-10 years, with 34% of males bocotting 10 years or more.
Australian males, just as in the UK, have a higher propensity to boycott than women, but women are not far behind and are catching up.

Married people, and those in partnerships are most likely to boycott than single parents or unmarried people. The critical age groups for boycotting are 34-64 years. Retirees are the highest group likely to boycott, but their overall effectiveness on bottom line may be reduced.
Boycotting for a period of 10 years in the 34-64 age group means that they are removing themselves from your market place for almost one-third of their most viable working life and best years of potential return on investment to an organisation selling essential goods and services.
Boycotting like this has to have a major impact on the bottom line, and the cost of handling a complaint correctly through better customer service values, customer empathy, training and authority delegation, must be extremely small in relation to the lost return on investment combined with the cost of replacing that customer for a 10-year period.

Organisations need to wake up. This includes government whose currency is votes, community volunteering, support and civic compliance.
Our Consumer Sentiments Study results for December 2010 agree with Customer Champions in the U.K. when they state that when people complain “the focus is not on financial reward, it is much more focused on organisations ‘taking responsibility’ and ‘ownership of the issue’, and “treating the complaint seriously in an effort to get a satisfactory resolution”.
Boycotting has a long term and detrimental effect to a company’s bottom line and balance sheet. With social media impacts now being experienced, and the tendency of consumers not to complain via social media, but to use social media to broadcast their sentiments from the complaint outcome including boycotting and brand switching, there needs to be a change in the approach.

Our consumer organisations, including government, need new consumer-driven approaches to tackle complaint handling, resolution processes, and customer satisfaction in Australia, and apparently also in the U.K.
By: David Higginbottom
Competitive Edge
Date: January 18, 2011

Reference: http://www.consumersentiments.com.au/

Government Out of Touch with Consumer Sentiments on Wikileaks, Banks & Consumer Communication

The Prime Minister, Julia Gillard, may be ready to dismiss Julian Assange and try to remove his Australian citizenship for a national/ global crime that is yet to be determined and substantiated, however she should understand the changing tide of consumer sentiments in Australia before she takes further action.

Not only is government uninformed about consumer attitudes in a number of strategic areas, but government at all three levels in Australia is the worst offender when it comes to being accountable to Australian citizens when they complain about services or issues.

Eighty-eight percent (88%) of respondents consider government equal to or more difficult than private industry to complain to regarding consumer enquiries and complaints.

Most Australians have very low expectations of even receiving a reply to their complaints from government. Poor response rates means sometimes consumers have to wait over six months to hear back.

Eighty-four percent (84%) have a lower than 50% expectation that they will get a satisfactory resolution to their complaint from any level of government. Sixteen percent (16%) have no expectation of receiving a satisfactory resolution to their complaint.

Our studies have shown that less than 10% of consumers will use the Ombudsman, so this deflection to these specialised offices does not go anywhere near handling the issues for consumers who want answers and solutions to unsatisfactory situations created by private industry, government departments, institutions and licensed organisations like banks.

The growth of the Internet and online communication platforms readily accessible to consumers, together with increasing legislation matched by an increasing inability to contact and talk to anyone or be heard, is a major contributor to the increasing dissatisfaction of consumers with traditional information channels and one-way government spin.

The Prime Minister may well dismiss Julian Assange as a threat to society, but now that the newspapers constantly use Wikileaks as a source of reference and daily publicity, in addition to being able to equally access the source documents that Wikileaks uses, the consumers are enjoying real time information about what really goes on between governments and in governments. Witness the recent information leaked on the whaling issue which most consumers assumed was being ethically handled with a high degree of conviction by the Australian Government.

Before issuing any other edicts about Wikileaks and Julian Assange, she would be well counselled to take into account our recent Australia-wide, independent Consumer Sentiments Study results.

These show that:

• On December 23, 2010 forty-five percent (45%) of Australians believed that Wikileaks offered an important source of additional information for individuals and communities interested in global affairs.This is almost the same result (46%) as that reported by an online study by Essential Report carried out on December 20, 2010 – at the same time we were surveying. Their question was, “The Australian Government has condemned the release of the Wikileaks material and the Prime Minister, Julia Gillard, has called it ‘grossly irresponsible’, and ‘illegal’. Do you approve or disapprove of the response of the Prime Minister and the Australian Government to the publication of the Wikileaks material?”
• A further forty percent (40%) of respondents were undecided on the importance of Wikileaks for our online study.
• Only fifteen percent (15%) of respondents did not believe that Wikileaks offered an important source of additional information for individuals and communities interested in global affairs.
• If forty-five percent (45%) believing that Wikileaks is an important source of additional information is not a large enough number for the Prime Minister to consider the merits of Wikileaks and to hold back on her rash decision to consider removing Julian Assange’s citizenship (an unalienable right), then she should be reminded that this is higher than her approval rating for “the job that Julia Gillard is doing as a Prime Minister”, (43% on December 20, 2010).

Having studied consumer sentiments for over 30 years, it is apparent to us that government and many organisations have underestimated the rising tide of consumer resentment to unrestrained and unrealistic, mismanaged regulation, and have been dismissive of the need to handle consumer complaints and enquiries while continuing to espouse the wonderful democratic rights of consumers in the economy and the “responsive” political system.

In our study banks, a government licensed group with direct reporting to a Reserve Bank, come in for some serious “stick” that should ring bells in Canberra. On the question of:
“Do you feel the banks have too much power, especially since the Global Financial Crisis?”.
The study results show that eighty-six percent (86%) of respondents feel they have “far too much” or “too much” power.

Only twelve percent (12%) of Australians feel they have “enough” power, and two percent (2%) “not enough” power. Furthermore, seventy-eight percent (78%) of respondents of our study of December 2010 would like to see the growth of more second-tier banks that cannot be absorbed or taken over by the “Big 4” banks. Only seven percent (7%) object, and fifteen percent (15%) were undecided. Do the banks really have the consumers’ votes and support? Is it about fees Mr. Swan, or about healthy open competition?

Who is listening in government and industry, and who is really aware that the e-Society is giving consumers more power and changing the balance of power?

There is no doubt in our mind that these sentiments have been there under the surface for some time, but that the traditional channels have not given consumers the voice that online communication platforms and the Internet now provide.

It is time that government and industry track and monitor consumer sentiments thoroughly before they resort to the traditional “top down” method of over-laying their spin on what consumers’ intentions, issues, sentiments and advocacy is about key issues of importance. The GST anti-campaign result, also reported by us, shouts this loud and clear. It came and went in less than a week!

It is even more important that governments start to respond to consumer complaints and requests in a timely and informative manner because further declines in response rates and complaint satisfaction will see a dismissive consumer base that may give up on communicating with government, to the detriment of our consumer society and democracy. Understanding consumer sentiments and learning how to communicate in the new paradigm is a real challenge that must be embraced immediately.

Consumer Sentiments are Turning Heads to Online in Australia

Before the latest publicity appeared in advertisements regarding GST in major newspapers, and before Christmas, Competitive Edge had surveyed consumers nationally to a 99% confidence level, and found that 69% of Australian consumers believed that there should not be a GST on online purchases when purchasing from overseas. A further 16.5% of consumers surveyed were undecided, and 14.5% were in favour of charging GST on online purchases.

The reaction of retailers, while placing pressure on government, may not, in view of these results, create favourable consumer opinion and sentiments, given that a large number of consumers are already dissatisfied with organizations with which they deal in any three month period, according to a national unbiased study of consumer sentiments undertaken by Competitive Edge.

In 2009, Competitive Edge conducted a national study into Consumer Sentiments, Emotions and Advocacy. The results of this study were presented at a conference at the Society of Consumer Affairs & Professionals in Sydney in August 2009.

(See http://www.consumersentiments.com.au/ )

The independent nationwide study was the first to look at national consumer sentiments in regard to consumer complaints and complaint handling across the major sectors in the Australian economy.

The study results reveal that complaint handling is a major area of consumer dissatisfaction and that it was not well handled by all major segments, especially in retailing, banking and government and utility sectors.
Consumer sentiment results showed that many consumers would switch brand readily and engage in telling others directly and online, rather than taking direct complaints to organisations which they felt often treated them “like idiots”, were indifferent, and generally made complaining about products and services which did not perform to their satisfaction, a waste of time.

In December 17-20, 2010 Competitive Edge undertook another independent consumer sentiment study on a nationwide basis examining the same sectors of the economy, and complaint handling for products and services. This study sought to determine if there was a decrease in consumer dissatisfaction with the way complaints were handled by organizations and examined the impact of the Internet and social media on complaint rates in the last three months of the year, consumer reaction to complaint handling and resolution, organizational and government response rates, and overall consumer reactions to non-performing products and services.

This comprehensive study of consumer sentiments found that consumer dissatisfaction was still leading to negative views, which frequently resulted in brand switching and to increased boycotting of products and services for many organizations with approximately 50% of all complainants taking this action and/ or telling colleagues and spreading the word” online.

This is a very serious state of affairs, and indicates that organizations are losing customers at an unprecedented rate without having effective strategies to return most complainants to loyal customer status and bottom line profitability. This churn factor, like the churn factor created by “over-cooked” sales promotions before and after Christmas, must be having a serious effect on organizational performance in the private sector where customers are not “captive” as with many utilities, government programs and selected banking, insurance and finance products and services.

While it has been shown that customers who complain and are given a satisfactory resolution, not always directly in their favour, return to the organization with greater trust and loyalty, it seems that most Australian organisations including government departments and instrumentalities, are unable to execute the necessary strategies and organizational approach to achieve this desired outcome.

In the case of consumer goods, face-to-face performance can easily be replaced by online performance if the face-to-face experience is negative and can lead to complaints and confrontation which consumers generally wish to avoid. In such cases, the GST may not be the real determinant of return to “normal retailing”, and may result in consumer resentment without reward further increasing sales for retailers or decreasing online sales activity

The advertising may have the opposite effect of driving more consumers to try buying online and at competitive prices, given that direct sales are not providing additional shopping pleasure or the level of desired of service before, during, or after the sale.

In this same study recently conducted in late December, Competitive Edge asked a number of questions about important social issues to explore in depth the strength of current national Australian consumer sentiments. This followed questions regarding use of the Ombudsman, the impact of the global financial crisis, and the impact of organizations sponsoring sporting organizations which were asked in the 2009 study.

Apart from the recent results from the study demonstrating that consumers were very much against GST being added to purchases under $1,000 when they purchased online it also revealed that they had a strong resentment to the Big 4 banking dominance in the Australian market, and had firm opinions on taxes on superannuation, support for Julian Assange and Wikileaks, and were very decisive on other key issues.

Could consumers in Australia, like in many other parts of the world , be finding in the Internet a new found freedom of choice and service, as well as the opportunity to exercise more consumer power that our retail industry leaders and sections of government are slow to recognize and appreciate?

Further information can be obtained by contacting Competitive Edge, an established marketing consulting, and market research firm with over 30 years continuous experience in the Australian market.

Email contact can be made by: comedge@comedge.com.au
Release Date: January 4, 2011

Contact: David Higginbottom, Competitive Edge – 613 9853 1899

Reference: Consumer Sentiments & GST Reaction

The GST Advertising By Retailers Has Zero “Net” Effect

The recent advertising to try to get GST put on purchases of goods and services under $1,000 seems to be continuing despite the fact that a very large majority of Australians are not in favour of assisting major retailers spearheading their campaign.

Our study independent national Consumer Sentiments Study before Christmas showed that 69% of Australians did not feel that a GST on goods and services under $1,000 was warranted. 

After the full page newspaper campaign, the Herald Sun and other major newspapers gave results of around the high 80% mark for consumers not wanting to have a GST on goods and services under $1,000.

In recent days, Bunnings via their owners Wesfarmers, have also joined major retailers in asking for the GST to be applied on all online sales of goods and services.

Are they right, and are the majority of consumers wrong in their attitude?

Well, it really doesn’t matter because consumers are king, and they have the buying dollars.  If they don’t want it, then it must be right because if government and large retailing groups force the issue, then they will drive them to further online sales and build consumer resentment.  You can’t win from this situation.

Perhaps what is more important is the fact that by taking on this campaign, retailers have “shot themselves in the foot” in a number of ways.

Firstly, they have told everyone in Australia that their online shops are not doing the job that other global organisations can do in terms of product, service, speed of delivery, and even quality.  Myer has announced that they will go online as a result of the GST.  Didn’t they have an online shop that failed?

Secondly, retailers have run a very successful campaign informing and converting those consumers who did not shop online to online shopping advantages, while having to “cop” the criticism of poor in-store service, attitude and even selection and quality of product compared to online offers.  In the price area, they are non-competitive.  The result will be increasing online shopping by future Australian consumers.  Perhaps they would have been better donating the lost GST revenue to Australia to the Queensland flood relief.  It would have given them credibility, leadership on the issue, driven home the benefit to ordinary Australians, and beaten “whinging” hands down.

Thirdly, many of these retailers are super chains that use their bargaining position to control markets, and in that role as channel leaders, to squeeze wholesalers and others in the distribution chain that supply them.  If suppliers complain about them, it will lead to further lost orders and lost business.  You have to suffer it because there is no other place to go to gain distribution outlets to consumers.  They are hardly an example of “level playing fields”, and giving ordinary Australians a fair go.

On the other hand, these retailers are large importers who have helped diminish Australian manufacturers and their role in this country.  They have always put price before customer, employment, quality and warranty.  Try complaining about a faulty product to any of these stores, and you will wait weeks and still not necessarily be satisfied according to Australian national customer complaint statistics. 

These retailers led the import revolution under the global banner, without placing ads in the newspapers, but now wish to control global markets when overseas competition they and the Internet impact on them and their business. 

Fourthly, the loss of jobs promised from the GST backlash may already be happening because they have practised suicidal markdowns and back-to-back sales programs that have delivered reduced retail margins and profits over the last few years. 

Their sales record is not really about the GST.  In reality, it’s more about the style of management that has focused on strategies for extended credit free terms, casual employment which translates to customer self-service in the store, misusing price as the basis for continuous promotions, and sacrificing product selection and quality, the store environment, customer relationships, trust and loyalty.

How come that the “stretched” Australian consumers have the funds to buy online anyway?

Altogether, I think the program will fizzle unless the Gillard government wants to fall on yet another ugly knife, which is very miniscule compared to the large policy swords it is currently evading.

The agencies and the print media are the beneficiaries, and consumer  sentiment is the winner.

The retailers will be reminded that nothing happens without a sale backed by money, and consumers are now taking back the market place and their sovereign right to shop where they want, with whom they want, how they want, when they want, and for what they want.

By:                  David Higginbottom

                       Competitive Edge

Date:              January 6, 2011

Reference:    www.consumersentiments.com.au