Serving vulnerable customers — it’s about time.

Higher taxes, less disposable income, and a tough economic and political environment thrown in amongst a string of public sector strikes and we’re starting 2023 with one of the biggest festive hangovers in a long time. The sad reality is that this year begins with more people in the UK worse off than ever. Customer, consumer and user needs are complex and evolving, fast. There’s never been a bigger need to consider vulnerable customers than now.

Who are our ‘vulnerable’ customers, and can we transition them from underserved to understood?

The definition of vulnerability is expansive and multifaceted, differing between and within organisations and industries. In 2021 the FCA identified 4 key factors that contribute to vulnerability:

• Health — any mental or physical condition or illness that affects the ability to carry out daily tasks.
• Life events — these events include bereavement, job loss or retirement.
• Resilience — reduced ability to withstand financial or emotional shock.
• Capability — low confidence and confidence in managing money/financial matters. This driver includes low capability in areas such as literacy and numeracy.

Today, almost half of UK adults (24.9 million people) experience one or more of these vulnerability factors at any time.

Conversation chapter 1: Desperate times, traditional measures

Most traditional measures of how to engage and cater for underserved people aren’t up to scratch. We’re reminded of the old business adage ‘worry about 95% of customers — that’s enough’. These days, it’s not. Essential services have to cater to all, as do regulatory bodies, and government services, to name but a few. 5% of the UK population is 3 million people.

In both the private and public sector, uncertainty to invest in uncertain times, combined with shrinking budgets, and outdated segmentation methods mean businesses face the perfect storm of challenges. At a time when purposeful design and innovation are needed most, how can we ensure organisations have the right insight, capability and agility to do the right thing for their customers?

Widening of the vulnerability gap

Recent economic, political and social tensions are having serious knock-on implications for our society. The gap between the haves and have-nots widens. What’s more, people that we ‘wouldn’t expect’ are falling into the vulnerable category. More people are being left behind, and forgotten about.

Another consideration is how radical changes can be made by amplifying traditionally ‘underserved’ or ‘neglected’ customers’ voices. SkinDeep produce skin coloured plasters; Folx provide health care and support for LGBTQ people and companies that we have had the pleasure to work with are also making waves: such as the app Balance, which is specifically designed for people who experience menopause, and Minderful who are looking to challenge the taboos of mental health.

Should we be expanding the definition of vulnerable to include all underserved or under-represented consumer groups? What are the implications of this? Or should challenging the status quo through inclusive product and service design be a must?

Conversation chapter 2: How some organisations are responding

At a time when the government has committed to providing £4.5 million to bail out collapsed energy company Bulb, the industry needs to make tough decisions about what drives value. Coupled with the post-pandemic spotlight on organisational purpose, expectations of reciprocity and understanding of customers’ specific needs are non-negotiable. In 2022 around 14.5 million people (1 in 5) in the UK were living in poverty. In response, Octopus and Ovo have both set up customer support funds and payment plans, implemented new telephone support lines and also offer independent financial advice. With all eyes on how businesses are spending private and public funds, this leads to hesitancy in spending, meaning critical initiatives take even longer to be implemented.

Currently, just over 1 in 5 people (14.6 million people) in the UK have a disability. In response, businesses are stepping up to cater for all needs:

• Specsavers have a team of mobile opticians to provide eye care to those who cannot go to a store.
• Currys Shop Live connects customers remotely via video call to in-store experts.
• Lloyds Bank has integrated services for the deaf and hard of hearing online and in-store.
• Asda introduced an ‘inclusive shopping hour’ in 2021, whilst also upskilling 85,000 employees on hidden disabilities.

Understanding which needs to be prioritised can be costly, timely, and complex. Using small-scale experiments to test customer insights is just one-way organisations understand where to place the right bets on which products and services need evolving or developing, without the risk.

Join the conversation

On the 25th of January, 8.30–9.30am, we invite leaders to explore how best to cater to and serve vulnerable customers. As businesses plan for 2023 and beyond, empathising, understanding and in some circumstances, extending a duty of care will be essential; turning that insight into action in a volatile environment remains a challenge.

Join the conversation by registering for free tickets here, and sign up to our monthly newsletter to keep up to date.

Author: Hannah Silverstein & Jassi Porteous.