Changing customer & stakeholder behaviour: The value of customer loyalty 

"The topic is changing customer and stakeholder behaviour because I think in these changing times we have to have a broader view. Customers and shareholders are two very important groups of the stakeholders. I’ll give you two three examples why we have to broaden that. Brand is really really an important asset for a firm so we need to have reliable suppliers as one part of the stakeholder group just to really all the time have quality delivery. Then the opinion leaders on environmental issues which become more and more important. And last but not least you have the workforce and only if you take care of the workforce you are going to win the war for talent in the future.

From my point of view customer churn is top of the agenda and customer loyalty is out of fashion for two reasons, two major reasons. One is the web 2.0 strategy so they are social networks, web communities; you have as a customer can gather instant information on products and companies. So there is increased comparability and therefore customers always think there’s a better offer just one click away.

The other I think is the impact the economic crisis has on customers’ thinking and customers’ behaviour. Customers want ethical behaviour and they are really willing to change products and companies if their expectations are not met. Measurements companies can take to cope with churn as a first step, they have to take a longer term view on really customer lifetime value. So there’s additional information needed, business intelligence needed to really gather relevant information on the customers.

You have quick wins on the one hand based on valid information, sales go up, but churn is reduced if you’ve got the relevant insights and really can judge on customers on their lifetime value. However this is only one side of the coin so ethical and environmental behaviour is key. For two reasons I think. One is risk management aspects become more and more important in those times. Take a view on product recalls in the recent past. They cause massive brand damages and so company values are destroyed so from an internal perspective to embed flexible risk and control landscapes is essential.

And the other part is the environmental aspect to put it broader, sustainability. All companies have to have a sustainability strategy in place. This has to be an inherent part of a company’s reporting landscape. There have to be independent audits on on those reporting. And last but not least I think companies really have to optimise their web strategy just to get an ongoing contact with the customers and the other stakeholders.  

To reach investors expectations in the long term I suggest to be aware as a company that investors expect you to grab growth opportunities wherever they arise. From an investor’s perspective, there is no border. The companies really have to have a market research on a global scale and they have to reflect legal aspects, tax aspects, regulatory aspects, last but not least cultural aspects. I think we have to have a broader view on stakeholders. Broader view given these changing times so it’s not only customers and shareholders but the workforce, suppliers, opinion leaders and environmental things.

The reason for that is that our world gets more and more complex so the challenge for companies is to balance the different expectations from different stakeholders and to really align that to get insightful information to adjust processes in risk management respectively. You have to have integrated reporting and that all on a global scale. That’s a challenge."