Why brands must treat customers like stakeholders
The shift from shareholder to stakeholder capitalism has gained significant steam over the last two years. And, as evidenced by recent Business Roundtable, World Economic Forum, and Blackrock statements, the emerging consensus is that customers—not just shareholders—must be viewed as primary stakeholders in any business. Layered into this recalibration is the peaking prominence of customer centricity as a vision and strategy to elevate customers to the prominent role of ‘business stakeholder.’
These perceptions aren’t limited to the business bubble. In fact, people are aligned: 87% consider all stakeholders important to long-term company success, according to Edelman. What’s more, the study revealed that customers are ranked the most important stakeholders when compared to other cohorts, including employees, communities, and shareholders.
The criticality of customers to company existence has only been amplified by the COVID-19 crisis. And consumers desire to be heard more than ever. A recent Gongos survey found that 81% consider it highly important that companies listen to their opinions today.
Suffice to say, the customer-as-a-stakeholder imperative has reached an inflection point. If ever a time to give customers a real seat at the proverbial table and forge relationships of true reciprocity with them, it’s now.
Treating customers like stakeholders: The case for a new engagement model
For the sake of this article, we define “stakeholder” as an individual or group that has an interest in—or is invested in the success of—any decision or activity of an organization. And, when it comes to gaining input and insight from consumers, organizations have a long history of leveraging invitation-only, online communities to engage with and learn from customers and/or a broader base of consumers over a period of time.
More explicitly, communities are digital gathering places for customers, partners and others to engage in discussions related to a category or company’s products and services. They enable and empower brands and customers to walk hand-in-hand in fueling customer-centric decisions. Done well, they have the ability to instill positive brand affinity, positioning organizations as purpose-driven, caring connectors that give people a voice and find a way forward together. Perhaps most importantly, they are uniquely situated to help ensure that reciprocity is realized by cultivating more mutual empathy between companies and customers.
After all, they are designed to give customers the kind of say a respected stakeholder has—a strong, sustained voice in the decisions a business makes. Their two-way, ongoing, nuanced nature opens the door to closer connections between companies and consumers that more conventional customer interactions aren’t fashioned to forge.
The potential of these platforms to help corporations deliver on the customer-as-a-stakeholder imperative is promising. In fact, 80% of U.S. consumers (66% globally) believe that providing their input via an online community can truly make a difference in the success of the business, according to a global study conducted by our company in partnership with Dynata. This points to an opportunity for organizations to more meaningfully invest in the experiences of their online community members.
Evening out the value exchange: truly cultivating mutual experience
Customer expectations around a more even value exchange between themselves and corporations are evolving swiftly and significantly, as is their appetite for interaction over transaction. Communities go well beyond a mere touchpoint along a customer’s journey by establishing a sense of equal footing with the brands consumers invest themselves in.
But ensuring they live up to that potential of making consumers feel like the stakeholders they are hinges on the embrace of new engagement strategies that treat members less like customers and more like colleagues. And as organizations activate on this obligation, they should prioritize three key guiding principles:
- Empowerment: Set people up for success with an onboarding plan to help them perform optimally. This means fostering a collaborative and candid environment through information, understanding, and respectful remuneration. Start by establishing expectations, providing examples of quality responses and desired behavior. Encourage organic conversation and connection, probing when necessary. Communicate using commonly understood language that is conversational and non-intimidating. Carefully listen to what participants share, asking them to improve the depth of their responses when necessary. Validate their questions and thoughts just as you would an internal team member.
- Significance: Treat members like humans, not data points. Make them feel valued, heard, and reassured their investment in your business is held in high regard. Create a non-hierarchical environment in which participants have just as much power to guide the conversation as you. Welcome their pushback; you may find that your approach to exploration was fundamentally off base. Give them the authority to propose new ideas. Allow them to home in on areas that pique their interest, and to take discussions in entirely different directions. Sixty-seven percent of U.S. consumers feel like participating in an online community would give them a greater sense of purpose, according to our own research. But this doesn’t happen by accident. It starts with sharing authorship of the experience with them and taking a real interest in what they bring to “the table.”
- Transparency: Keep your members in the know, consistently erring on the side of openness. Build trust, a healthy sense of curiosity, and incentive by pulling back the curtain, providing more disclosure on your brand identity. Expose members to the insights and actions they play a crucial part in influencing. As key partners on the path to helping your business achieve positive business outcomes, they deserve and desire to know you, your objectives, and the impact of their efforts. They earn the right to exclusive business intel granted to every other stakeholder. In fact, where they’re seen as stakeholders in the company, 58% of global members of online communities expect to be among the first to know about new innovations, products and features, according to our study.
Greater reciprocity garners greater ROI
Events of 2019 and 2020 have accelerated the elevation of customers to stakeholders in the success and sustainability of corporations. Acknowledgement of individuals as deserving of truly reciprocal relationships with organizations is a powerful first step. But it must be accompanied with action.
Online communities are powerful tools to help build mutual value exchange between customer and company, so long as members are made to feel like the stakeholders they are. For businesses, achieving this requires an elevated understanding of communities not merely as dialogues or dashboards but as three-dimensional experiences that strategically meld platform, people and processes. It calls for new rules of member and brand engagement grounded in empowerment, significance, and transparency.
People provide higher value when they feel valued. Thus, organizations that truly activate on the customer-as-a-stakeholder imperative within online communities will reap the rewards of deeper insights that drive more customer-centric decisions and, ultimately, new kinds of “partnerships” toward growth.
As CEO of a company pioneering industry change, Camille understands what it takes to make business decisions while operating in volatile environments and building strong cultural buy-in. She believes operationalizing consumer-centricity as a strategy will produce consistent results and have a harmonizing effect on decision-makers; and adopting...