Today, companies are increasingly in the spotlight due to a keener interest in their ethical practices, how they treat their employees and the relationships they have with their partners throughout the supply chain. Running a business has undoubtedly become more complex, with a need to balance expectations from investors, customers, employees, regulators, and society.
Being seen to do the right thing is now essential for most businesses. What’s more, having a culture of caring more their impact more broadly and a set of ethical behaviours and practices are increasingly being upheld not just by regulators and watchdogs, but by the consumer.
Our latest UK Customer Satisfaction Index highlighted the correlation between high satisfaction and perceptions of an organisation’s customer ethos, transparency, and reputation for doing the right thing by employees and society.
This trend is likely to continue – accelerated in large part, I suspect, by the ability to deliver through a more personalised customer experience, more tailored and more nuanced; this in part has been brought about using artificial intelligence.
AI has the potential to transform consumer behaviours and is already driving a shift in the balance of power towards the customer – providing them with easier access to information, allowing them to ask more questions and benefit from greater choice than ever before.
So, how can businesses evolve their strategies to continue meeting customer needs in the advent of this enhanced AI-powered transparency?
The Business Imperative: Doing the Right Thing
There is a business need to go beyond single-aspect metrics (including Net Promoter Score (NPS)), which reveal less and less in this new world of AI-empowered consumers. Instead, businesses should look to build trust through their actions across the whole supply chain and customer journey.
This means taking a considered approach on several fronts, the first being how they treat their customers – which includes transparent pricing, ethical sales practices, and, importantly, clear and honest communication. Our research shows 49% of customers consider clear communication to influence their perception of an organisation’s reputation – is the most of any factor.
Product sustainability also matters as consumers and media increasingly scrutinise environmental commitments. Greenwashing has been a real risk for some time, which AI could magnify by enabling consumers to avoid purchasing from businesses implicated in questionable sustainability claims more readily. Our research shows that 21% of consumers factor in sustainability when evaluating their satisfaction with an organisation.
On top of this, businesses need to consider their supply chains. The shop window or end product is no longer the only thing customers see or consider. AI is likely to enhance end-to-end visibility, making it more difficult (thankfully) to hide poor labour or product sourcing practices. With the EU’s Corporate Sustainability Due Diligence Directive and stricter rules on sustainability reporting for listed companies planned in the UK, this is becoming a regulatory as well as a reputational risk across multiple jurisdictions.
Balancing Multiple Stakeholders by Demonstrating Service Leadership
As AI and technology become more pervasive, we need to be mindful that the future of AI is unlikely to be a one-way street. Many leaders are focusing on its use as a tool deployed by businesses, but there is every reason to expect it will also become a consumer-driven force reshaping trust and accountability.
The future world I see – which is likely not so far off – involves the consumer asking their own AI agent to check the facts and figures, the behaviour of the organisation and its track record. This could quickly evolve into you and I having our own personalised filters, with firms who fail to meet specific criteria excluded or penalised, resulting in huge growth for ethical businesses that consistently serve their customers well.
Clearly, for service-led organisations, this AI-enabled consumer scrutiny represents a further opportunity to differentiate on service and build a loyal customer base for the long-term. Those businesses that prioritise fairness, sustainability, and ethical leadership will be set up to thrive in the AI era. They are also acutely aware of the difference between personalisation and a personal experience.
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