Times are changing. Or is it you? Whereas consumers had to rely on reviews from magazines or advice from specialist retailers for what felt like an eternity ago, today they have a wealth of knowledge in their pockets. With the help of our best friend – the smartphone – we are able to compare product suppliers, their prices and the promised quality at any time. If the manufacturer doesn’t deliver what he promises, the item goes back. Convenient for customers, unattractive for companies. We show which factors significantly influence digital customer behavior.
In recent years, the digital transformation has literally transformed customer behavior – especially in online shopping. As a result, entirely new demands are being placed on the companies. Customer behavior is becoming the essential driver of digitalization, because companies have to play by the new rules. This is the only way they have any chance of surviving in the long term in the face of steadily growing competition. But does online retailing equal online retailing? Do all companies really have to adapt to modern, digital customer behavior?
B2B vs. B2C
Nothing works without our portable computers anymore. Online shopping and price comparison? With a few “swipes” and “taps”, the new sweater or TV is ordered quickly and securely. Many companies consequently adopted “mobile first” years ago. In the B2C sector, the smartphone and online research have long been established; but what about B2B? First, let’s dispel a misconception. Modern customer behavior does not only determine online shopping. It doesn’t matter whether it’s a lifestyle product, a service or a highly complex software solution for the company: the first port of call for serious interest is usually the search engine. And – unsurprisingly – in the vast majority of cases on a smartphone.
Meanwhile, it is difficult to distinguish between B2C and B2B customers. Digitalzation has given all market participants direct market access. Even with the most complex products, such as business software, customers have the opportunity to obtain sufficient information without even contacting the company in question. It is not uncommon for up to two-thirds of the purchasing process to be completed before the sales department is involved. This doesn’t make things any easier for companies: they are losing information sovereignty and should ensure that they reach existing as well as potential customers digitally. New marketing strategies are becoming imperative.
Quality Is King!
Before the purchase of goods or services (and, of course, beyond that), one differentiating factor remains crucial: quality. Although customers demand the best possible quality, they are not always willing to pay more money for it. The problem is obvious. Companies are under pressure to offer good value for money. And if the quality is not right, the product is returned. Or not even purchased in the first place, because easily accessible user reviews often provide the first information about any shortcomings of the product. The experiences of third parties will increasingly help to determine customer behavior.
Variety Instead of Loyalty?
Direct customer access to the products on offer and increasing transparency have further consequences for companies. They should not only focus on delivering good quality goods, but also consider that the reputation of their own company is a factor in their success. If a manufacturer suffers damage to its image, for example, this may reduce confidence and thus the willingness to buy. Dynamic pricing (keyword: predatory pricing) also leads to similarly dynamic buying behavior. The classic “regular customer” hardly exists anymore. After all, the search engine also spits out the lowest prices for the product being searched for. People buy what is cheap and/or promises the best quality.
Do you think all of this screams B2C and does not apply to the business relationship between, for example, customers and suppliers? Far from it. In B2B, too, the digital transformation and, most recently, the Corona pandemic are making customers think twice about who they want to work with. According to a study by Pros, around half of the participating companies have changed some of their suppliers during the crisis (the key findings of the study). The reasons for this include a lack of crisis resilience and a lack of opportunities to find out independently about the supplier’s pricing (B2C business sends its regards).
Counteracting with Action
Despite all the supposed disadvantages of modern customer behavior, however, progressive companies know very well that anyone who acts in a vacuum in our fast-moving world hardly stands a chance. Changes also always mean calls to action. It is and remains important to increase customer loyalty with good quality and fair pricing. In the relevant markets, companies stand out above all when customers can identify with the brand. Every interaction has the potential to influence trust positively, but unfortunately also negatively. Targeted marketing, excellent service, impeccable product quality and a good image can still bind people to a brand or a company in the long term.