In recent years, the global marketplace has undergone an unprecedented transformation. Political reform, economic growth and digital innovation have empowered consumers as never before, with modern, digital age consumers not only having the power to influence what they buy, but also what others buy.

This rise in the power of the consumers and their expectations is driving far-reaching changes in how corporations must structure their business models if they are to remain relevant and competitive.  It is becoming increasingly apparent that future market share will be won on consumer experience rather than product and price, and that businesses that become a consumer-focused corporation, that integrates the consumer’s perspective into every process, at every level and across every function, will win both the battle and the war against those that fail to innovate.

“Without a customer focus, companies simply won’t be able to survive. We are living in a time where we face the commodity trap. Too many of our products and services are the same. To stand out in a sea of sameness, customer experience is the only way to do that.”

Knowledge is power

“A little learning is a dangerous thing” stated Alexander Pope and the ability of the internet to enable consumers to gather knowledge and information from multiple sources to make informed purchase decisions has certainly proven fatal to the power of brands to own the dialogue with consumers.  No longer happy to be passive purchasers, dictated to by business and brands, the consumer has taken ownership of the conversation. With the digital revolution enabling a wealth of information to be available at the touch of a button, consumers will both seek the opinions and experiences of others in order to make informed purchase choices and are prepared to share their own experiences and opinions.

Research from Deloitte, in their 2014 Consumer Review: The Growing Power of the Consumer, highlights how consumers place input from family and friends, customer reviews and ratings from trusted independent product/service experts above information provided by the product suppliers as a trusted source of information on products or services.

The digital revolution has wrenched ownership of information to support purchase decisions from the grip of corporations and brands and placed it firmly in the hands of the consumer.  Having been given the power, consumers are keen to wield it, and are utilising the tools available, such as social media and price comparison sites, to help them navigate the wealth of information and choices available and exert their power to own their own decisions.

Rising consumer expectations

Now more informed, connected and demanding than ever, there is a growing gap between consumer expectations and businesses ability to meet them. This is not only in terms of the products and services themselves, but in how businesses engage with consumers throughout the customer journey.

Businesses are challenged with managing an ever-increasing number of consumer conversations, across a growing number of social media platforms. Consumers expect to be heard and responded to by the businesses they buy from and, if not satisfied with the resolution, will vote not only with their wallets, but also have the power to influence the decisions of other potential customers.

If businesses are going to build customer satisfaction and remain competitive, it is critical that they invest in developing the capability to track these individual consumer journeys and deliver targeted responses in real time.  If they don’t engage, they are at risk being excluded from the conversation.

The changing path to purchase

Historic paths to purchase have been deconstructed as access to the internet and social media enable the modern-day consumer to take an active role in making their purchase decisions.  No longer a simple linear path, with information being disseminated from the brand to the consumer, the customer journey is a far more complicated workflow.  Preferring to pull information than be pushed it, a consumer’s path to purchase is often full of stops, starts and diversions as they use multiple information sources to inform their decision.

Within this evolved buying process, one thing is clear – customer reviews matter.  With over 81% of people reading reviews and checking ratings prior to making purchases, they have significant power to influence a purchasing decision for both B2C and B2B businesses.

92% of B2B buyers are more likely to purchase after reading a trusted review (G2 &Heinz Marketing, 2017)

At the end of their customer journey, the same tools which enabled the consumer to make an informed purchase are there for them to share their experience with others – thus making the customer journey a cycle, where one consumer’s experience feeds into another consumer’s decision process on whether to buy a product or a service.

Consumer Rights

Whilst the digital revolution has enabled consumers to take control of their purchasing decisions, improved regulation across many industries and changes to consumer rights legislation, have also played a part in significantly strengthening the consumers position.

The Consumer Rights Act 2015 has done much to simplify, strengthen and modernise the law in regard to consumer purchasing rights. However, one of the greatest drivers for ensuring consumers receive a fair deal has been the FCA “Treating Customers Fairly” (TCF) initiative which outlines how consumer financial services providers must be able to show consistently that fair treatment of customers is at the heart of their business model. Although TCF remains essentially an FCA prerogative, the standards laid out in the customer outcome framework have become a benchmark for fair treatment of customers across the board and can be seen reflected in Ofgem, Ofcom and other regulatory bodies principles of business.

Connected and informed, the modern consumer is not only aware of their rights and is prepared to fight to protect them but has been given the power to publicly highlight any infringements.

The impact on consumer and commercial credit and collections

As outlined above, today consumers have the power, not the sellers and with customers now owning their path to purchase and using other consumer’s feedback to inform their choices, it is unsurprising that a positive customer experience is going to be crucial to the success of a business. A positive customer experience promotes loyalty, helps retain customers and encourages brand advocacy.

Often thought to be the domain of sales, marketing and customer service, customer experience is in fact affected by any interaction with a business or brand on the buyer’s journey – including credit and collections.

Considering the level of customer interaction credit and collections requires, it is surprising how little it has historically been considered as part of the customer journey. Dealing with disputes, customers that need a nudge, those that need a shove and everything in the middle, credit and collections has always had to navigate the tightrope between company and customer needs – balancing the risk of bad debt versus the long-term sales opportunity in order to maximise company revenues.

A move towards a more customer-focused approach to debt collection is being further driven through growing evidence that providing customers with debt advice and support is far more likely to lead to settlement of the debt for the business. A change in focus to supporting customers who have defaulted rather than penalising them, will not only help build a competitive customer-centric business but will also deliver on those traditional commercial goals of reducing DSO and BDA – and ultimately supporting the delivery of working capital goals.

As power shifts into the hands of the consumer, and a satisfied customer becomes a commercial necessity, it is clear that future credit and collections strategies must adapt to be more customer-centric. With future market share believed to won on customer experience, those consumer and commercial businesses who are swift to reflect these changes in their collections policies will place their business in a strong competitive position.

Ashley Barratt, CEO at Barratt Smith Brown Credit Management Services


Barratt Smith Brown has also produced a new white paper titled ‘Debt collection to debt resolution.’

Click here to view or download the white paper.

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