Traditionally, customers have purchased goods and services based on a number of factors. These can include price, features, brand loyalty, customer service, and more. However, according to a new McKinsey Study, a new factor is having an increasing influence on consumer spending behaviour in the wake of COVID-19. This new factor is how the company treats its employees.
This new factor seems to be borne out of consumer empathy towards employees, as said consumer themselves may be facing similar situations in their own workplace. As such, mistreatment of employees during such a harsh time (the pandemic) leaves a bad taste in the mouths of customers.
According to the McKinsey study: “One-fourth of consumers believe that a company’s treatment of its employees has increased in importance as a buying criterion since the crisis started. Companies’ actions in time, especially toward their consumers and employees, will be remembered for a long time and can lead to goodwill.”
McKinsey’s findings are supported by an Edelman report. In it, 81 percent of those surveyed said they must be able “to trust the brand to do what is right.
The Edelman report revealed that up to 29 percent of respondents said that how a company treats its employees was the most important factor in deciding whether to become a loyal customer. A slightly smaller number at 29 percent said employee treatment was their primary concern when considering to try a brand for the first time.
Ninety percent of those Edelman surveyed said to earn their trust, companies needed to protect the well-being and financial security of their employees and their suppliers, even if it means suffering big financial losses until the COVID-19 pandemic ends.
The pandemic has caused much disruption in business and supply chains throughout the world. As such, trust is becoming a more valuable commodity with each passing day. Consumers want to ensure that their needs are met during these uncertain times; however, they are not desperate enough to do so willingly at the expense of others. As such, brands will tend to fall out of favour with their customers once they earn that organisations are continuing to operate at the expense of their employees. To rebuild trust, businesses need to listen and deeply understand the needs of these audiences and consistently demonstrate that they value what matters to them through small and large gestures.
Companies have cut employee pay and furloughed staff to minimize losses during the pandemic. But a report from Morning Consult cautions that such moves don’t sit well with consumers, either. That factor was as important to respondents as product availability.
Victoria Sakal, Morning Consult managing director of brand intelligence and author of the report, said consumers tend to think first about their own needs when considering where to make purchases, but they are becoming more cognisant of factors such as employee health and more.
It is important for companies to realise that morale is integral to providing customers with an excellent experience. Happy workers will continue to generate happier customers after all. Happy and content workers are expected to provide clients with a much more positive mood and a greater degree of customer satisfaction. It produces a more enjoyable consumer service, improves client satisfaction and eventually generates a higher rate of return.
Mistreatment of employees could potentially harm workplace loyalty and organisational productivity, thus leading to a significant negative impact on company activities. This will eventually lead to unhappy consumers, and eventually affecting competitiveness.
