By 2020, consumer spending in Southeast Asia is expected to double to US$2.3 trillion a year, with over $770 billion coming from the nearly 100 million people joining the consuming class for the first time or moving into more affluent consumer segments.
This is great news for companies chasing regional growth. But in a region where almost nine out of 10 consumers rely on social media to inform their purchasing decisions, the path to winning and keeping them is less straightforward.
Digitization has empowered consumers. It has fundamentally changed their behaviour and gradually eroded loyalty. According to Accenture’s latest Global Consumer Pulse Research, only 28 percent of Southeast Asian consumers consider themselves loyal to specific brands, while 65 percent say they are more likely to switch between providers than they were 10 years ago.
Companies ignore this erosion of loyalty at their peril. In 2013, four out of five Malaysian customers switched because of poor service – 28 percent more than in mature markets. Meanwhile, one in two Thai customers posted negative comments on social media after an unhappy customer experience—nearly twice the global average.
The findings are sobering. There is, however, a flipside. While increased switching presents risk, it also presents tremendous opportunity for those willing to invest in creating standout customer experiences that cut through the competition.
Here are three considerations for companies looking to win – and keep – the region’s increasingly fickle consumers:
First, forget a one-size-fits all approach and focus on delivering targeted digital experiences. Listen to what customers truly desire, and customise offerings for each customer segment. Instead of offering all options to customers, choose a group in which you know you can make a difference and focus on making an impact there first. It’s about finding the right mix of digital and traditional channels and providing services that improve the customer experience – one group at a time.
Second, focus on the ecosystem versus the enterprise. Think about the general habits of consumers outside your organization. Who are the other stakeholders, such as distributors and brokers, who impact your business? Taking a look from the outside in can help you assess what it takes to offer a seamlessly integrated – and loyalty-building – customer experience.
Finally, instead of pursuing programs to improve the company metrics, invest in programs that customers use and like best. This seems so obvious but many companies lose sight of this important point. Focus on reasons why customers stay, not simply chasing those who leave. Leverage the power of analytics to understand the initiatives that are truly relevant to customers.
The growth potential in Southeast Asia is unprecedented but to make the most of this opportunity, companies must get smarter about consumers here. Those that take decisive action now have a shot at reversing the trends of recent years and winning loyalty that could last a lifetime.