Historically, consumers have purchased goods based on price, features, customer experience or a combination therein.
But according to a new McKinsey study, a fourth factor has increasingly influenced customer purchase decisions in the wake of the COVID-19 pandemic: how the company treats its employees.
Employee Treatment Enters Purchase Decision Mix
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 this [the pandemic] 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% of those surveyed said they must be able “to trust the brand to do what is right.”
Nearly three in 10 (29%) respondents in the Edelman report said how a company treated its employees was the most important factor in deciding whether to become a loyal customer. A slightly lower amount (27%) said how a company treated its employees was their primary factor in choosing whether to try a brand in the first place.
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.
A Question of Trust
In a world struggling with COVID-19, Americans value "caring for others" more than they did previously — and expect the same of businesses, said Ashley Reichheld, principal, Deloitte Digital, Deloitte Consulting.
According a new Deloitte Digital report, 82% of customers said they were more likely to visit a business that takes extra steps to ensure the safety and well-being of its employees, with 31% considering it a “must-have.”
Businesses should make the right choice the easy choice, enabling the path of least resistance to address what employees, and by extension, customers, need, Reichheld added. "Our research found that employees want visible cleaning efforts (73%), daily communication of employee health status (77%) and remote work flexibility (77%). The good news is that customers are in favor of these, too."
The element holding all of this together is trust, according to Reichheld. However, in 2020, trust has become fractured. The research found only 4% of Americans trust businesses to tell them when it’s safe to return. Trust is the essential bond that underpins the relationships organizations have with customers, employees and partners. It’s the most important currency they have.
“In fact, 62% of customers who highly trust a brand buy almost exclusively from them; and 79% of employees who highly trust their employer feel motivated to work,” Reichheld said. “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.
Related Article: How to Handle the Crisis of Consumer Trust
Concerns for Employee Treatment Extend to Job Stability
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 cognizant of factors such as employee health and more.
“Companies exist in some way to serve consumers, but consumers are now increasingly taking a 360-degree view of things,” Sakal said. “And drivers of choice are increasingly going to be related to other factors outside of what a company is offering.”
When Sephora laid off many of its part-time employees via conference calls in late March, it sparked backlash on social media, even from some of its most loyal customers, according to Sakal. A Twitter user who identified as one of the company’s highest spenders, called VIB Rouge customers, said the brand was “cancelled” in her eyes after layoffs.
To combat such a backlash, Sakal recommended issuing a simple public statement about support given to laid-off employees. Sixty-two percent of those Morning Consult surveyed said such a statement would make them more likely to continue purchasing from a brand they already buy from.
Related Article: Customer Loyalty: Understated and Overestimated
Happy People, Happy Customers
Happier workers continue to generate happier consumers, said Matt Scott, owner of Termite Survey. “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. In comparison, poor workplace loyalty and overall weak organizational productivity will have a significant negative impact on the company activities, creating unhappy consumers and affecting competitiveness.”
Scott added that every company needs to concentrate on front-line service workers, those staff who have immediate, regular consumer interaction. At the center of management's focus should be the bond between front-line workers and customers. Managers ought to recognize external considerations that produce productivity at all levels of the company including: expenditure in healthy, skilled workers; infrastructure that benefits front-line employees; clear hiring and training procedures and workplace performance-related incentives.
“If you provide staff with the resources and expertise they require, workplace productivity should grow as will the opportunity to best satisfy consumers,” Scott said. “Employee happiness improves the efficiency of workers, and higher morale implies better quality and increased benefit for the customers. It interest results in improved consumer retention and engagement, fostering productivity and continuing success.”