Report: Social media strategies are failing to connect with 'chameleon' consumers

Customer experience is the new brand, says Ernst & Young

Companies are largely failing to engage social media users, according to a survey published by consultancy Ernst & Young.

The survey of almost 25,000 consumers in 34 countries paints a picture of companies struggling to adapt to "chameleon" consumers, whose behaviour no longer adheres to traditional market segmentation.

"In recent years, customer behaviour has changed beyond recognition," says Richard Ingleton, advisory partner at Ernst & Young.

"The consumer has undergone a radical metamorphosis and this change has significant consequences for all customer-reliant organisations."

Brands' use of social media fared particularly poorly: 85 per cent of social media users believe companies don't optimise social media to communicate with consumers.

Technology has changed consumers' expectations of service levels, as well as how, when and where they consume, the survey found, with 62 per cent of consumers venturing online for at least part of their shopping journey.

"Consumers are equipped with all possible product, price and stock information, and can simply bypass retailers that don't compete," the report says.

Technologically empowered customers want a greater say in how they experience service and to be active "co-creators" of products and service models, not passive consumers, Ernst & Young says.

"Customer experience is the new brand," says the report.

The survey covered 10 product and service sectors, including food and beverages, consumer electronics, and public services in mature and emerging markets.

Ernst & Young found diminishing brand loyalty in mature markets, but greater brand influence over purchasing decisions in emerging markets.

Telecoms enjoys the greatest brand loyalty and financial services the least.

"In today's retail setting, very little is fixed and many things are fluid - whether it's behaviour or brand loyalties, trusted media or shopping habits, market segments or the role of physical stores," the report says.

"Understanding the implications of these trends and developing solid principles of effective marketing will help organisations navigate through this new consumer environment."

Ernst & Young pulls out five broad lessons for companies from the survey: