Macroeconomic challenges have impacted businesses and consumers alike, spurring changes to purchasing habits. As a result, almost two-thirds (60 per cent) of those living in London say they feel less loyal to brands than they did two years ago, according to new research of 2,000 adults in the UK from ServiceNow.
Financial reasons are regarded as the biggest driver behind this, with half (50 per cent) of Londoners spending more now in comparison to 12 months ago, citing rising costs (66 per cent) as the main factor. Those in the capital also express a greater desire to purchase more luxury products (18 per cent), backed by findings on rising retail sales volumes, while many are paying more for products and services as part of a drive to become more sustainable (17 per cent). Only a small number (14 per cent) are spending less, and the majority (62 per cent) are doing so to cut back due to the increased cost of living.
“Britain continues to grapple with higher prices, with London the most expensive area to live,” comments Jordi Ferrer, VP & GM UK&I at ServiceNow. “This is leading to a brand loyalty crisis in the capital. But with operational costs continually rising, cheaper prices aren’t the lasting solution for businesses. Instead, organisations should evaluate things that money can’t necessarily buy. Brands can make a difference by offering a great customer experience, helping them stand out at a time when people have less money and living costs are higher. Those that succeed in improving their customer experience now will have a greater chance of building loyalty for the long term.”
Most (72 per cent) Londoners say they would be more loyal to businesses that they feel understand them as a customer, while almost two-thirds (63 per cent) want organisations to invest in technology that improves their experience. This tech-savviness is reflected in preferences, with three-quarters (73 per cent) of those living in London using a fintech bank compared to less than two-thirds (58 per cent) in the rest of the UK, and over half (54 per cent) regarding a good chatbot service as a vital requirement for brands, compared to less than half (48 per cent) nationally. The majority (55 per cent) in London would also be happy to spend more to guarantee a seamless service, higher than the national average (41 per cent).
Happy employees = happy Londoners
When looking at how brands treat their staff, almost three-quarters (71 per cent) in London say they would be less likely to engage with a company knowing that their employees were unhappy, higher than the national average (63 per cent). However, workplace elements Londoners regard as less important include:
- Salary (important for 47 per cent in London, 63 per cent in the UK)
- Flexible working (36 per cent in London, 45 per cent in the UK)
- Employee benefits (33 per cent in London, 37 per cent in the UK)
- Progression opportunities (27 per cent in London, 32 per cent in the UK)
Other employee aspects that Londoners are more likely to prioritise include optimal technology hardware (21 per cent), good technical support (19 per cent) and workplace perks (19 per cent).
“The line between customer experience and employee experience continues to blur, and organisations need to assess them as one instead of separately,” adds Ferrer. “Treating employees well and giving them the tools and processes to work effectively not only leads to higher productivity but also delivers the service that customers crave, which could be the difference for businesses in extremely tough conditions.”
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