Report: Five Preconditions of Effective Consumer Engagement

Across Australia and internationally, consumers are beginning to question who markets are working for – the communities they were established to serve, or the suppliers which operate within them. According to the Edelman Trust Barometer, trust in Australian businesses declined for another year from 48 percent to 45 percent in 2017, and a series of significant government inquiries have been launched into the operation of our financial services and energy sectors.

Clearly, Australia is a more resilient society when we have sustainable businesses and a sustainable economy that delivers positive outcomes for consumers and the community. We need a fair and balanced focus on both the supply and demand sides of our markets to ensure consumers can make informed choices to receive adequate and appropriate services at a fair and reasonable price.

CPRC’s Five Preconditions of Effective Consumer Engagement report outlines a conceptual framework to build consumer confidence and trust in demand-side engagement across a range of markets through empowerment and based on the lived consumer experience.

Alongside a spectrum of regulatory and policy interventions, we explore the five preconditions of effective consumer engagement, namely:

  1. Barriers to access for consumers with reduced capacity or vulnerability are removed

    Fair access to markets requires outreach interventions and direct assistance mechanisms which address barriers for vulnerable consumers experiencing reduced capacity.

  2. Key product information is disclosed in a relevant, clear and comprehensible manner

    Consumers can easily assess information about different products or services, potentially through comparison tools, to enable simple and accurate comparisons.

  3. Comparison tools are accurate, simple and effective

    Consumers can easily act on key information to switch providers with minimal financial or thinking costs which can create barriers to switching to a product that better suits their needs.

  4. Switching costs (financial and non-financial) are low

    Consumers can easily act on this information, with minimal switching costs or thinking costs that create barriers for consumers to switch from their current provider or product to an alternative that better suits their preferences.

  5. Consumers are aware of how to access, assess, and act on information

    Consumers need to be made aware of how they can access support and key information, compare offers and switch providers. If consumers are unaware of any of these former preconditions, they may disengage regardless of the quality of interventions to address these elements.

The report incorporates experience from international and local reforms, along with a greater exploration of the fields of behavioural economics and the broader policy framework within which markets operate.

The CPRC team would like to thank all participants whom we spoke with and learnt from in the development of this report. We welcome further discussion and your feedback in the weeks to come.

Over the next month, we will be releasing a series of interviews with international and local experts on the concepts within the conceptual framework report. This week we meet with Dr Rob Nicholls, Senior Lecturer at UNSW Business School, to discuss his work on barriers to switching in financial services. Watch our report overview and interview with Rob below. Follow us on Twitter or LinkedIn for updates.

Download the full report below.

For an accessible version of this report in MS Word format, please contact


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