ONE OF the few positives arising from our economic malaise can be found perhaps in significantly higher levels of consumer empowerment and a more proactive approach to managing money. During the boom, far too many consumers spent whatever cash they had – or whatever they could borrow from reckless lenders – without ever asking if what they were buying represented good value or could be found cheaper elsewhere.
And too many seemed willing to put up with appalling levels of customer service either because they were too timid or too busy to fight back.
Today all has changed and evidence of a new frugality is everywhere. It can be seen in the increasing popularity of German discounters Lidl and Aldi, which now share more than 10 per cent of the grocery market between them. It is evidenced by increased mobility in the health insurance market where one third of policy holders have actively sought out considerably cheaper corporate polices in the last three years, cumulatively saving tens of millions of euro. The shift away from big name brands in favour of much cheaper generic supermarket products has also gathered pace and more than 30 per cent of what Irish consumers put in their supermarket trollies now carries own-brand rather than more established names, an increase of nearly 300 per cent in less than five years.
As Conor Pope reports in Pricewatch today, a number of studies to be published this week demonstrate that the trend towards consumer action and a greater sense of empowerment is growing. A survey from the National Consumer Agency shows that Irish consumers are more confident about their rights than at any time since the agency began tracking consumer sentiment. And a wide-ranging survey from Accenture indicates that people are now switching service providers more than ever before and using the technology at their disposal to find the best value and to complain vociferously when things go wrong. According to the global consultancy firm, 78 per cent of Irish consumers say they are likely to shop around, a higher percentage than in any of the other countries in which it has carried out the same survey.
Accenture’s study begs many questions of service providers and says that just 28 per cent of those polled declared themselves happy with the service they are being given. Almost one in two Irish consumers now say they feel no loyalty to the companies they deal with. Higher levels of engagement have seen 25 per cent of consumers changing where they routinely shop after experiencing poor customer service or high prices, while 21 per cent have moved internet service provider. The same percentage have abandoned their home telephone service providers because they felt let down.
Buried deep in the Accenture study is a message Irish businesses would do well to heed. When it comes to marketing, 87 per cent of consumers said having a provider promise one thing but deliver another was the source of greatest frustration, with 75 per cent claiming it would impact on their buying considerations. In other words, under-deliver at your peril.