By Ben Snutch, Cheif Customer Officer
Not much seems to unite the UK these days. But one thing the vast majority of us can probably agree on is the huge price increases we’ve faced since the onset of the cost-of-living crisis in late 2021.
In fact, by summer 2022 nine in ten households admitted noticing a rise in day-to-day expenses, from commuters with takeaway coffees to homeowners and tenants who struggled with energy bills.
While fewer people still report sustained price inflation today the UK’s economic data remains choppy. Wage growth has stalled, unemployment had risen slightly when figures were released in June, and the Bank of England is keeping a watching brief on how many interest rate cuts there could be before Christmas rather than rushing headlong to decreases.
All of this is reshaping the way consumers think about brands with new behaviours that emerged a few years ago now stubbornly baked in. Long-suffering consumers have undoubtedly cut back on luxuries during this prolonged period, for example – even those previously deemed comfortable.
Although the picture may be gloomy, brands can do themselves a favour by adopting the mentality: “When the going gets tough, the tough get going.” This is a time for the brightest minds in the marketing industry to roll up their sleeves and consider new ways to stimulate consumer engagement and response. That’s the path to loyalty and growth.
Delve into latest data to discover new trends
Customer insight is key. Only by understanding behaviour changes that have emerged throughout the crisis can brands successfully tailor their messaging and targeting strategies.
That could be consumers switching from favourite brands to own-brand items on a scale unseen before inflation spiked. Or it might be a mass change in mindset as shoppers have become smarter about deals – heralding a new era of the even savvier shopper.
Success will depend on brands’ ability to identify what loyalty looks like whenever consumers feel they are able to make different choices again.
Knowing how this will play out when the cost-of-living crisis recedes is crucial. That means finding out now what’s made customers stay loyal to brands that have remained in their basket, or pick up and persist with new brands.
A strategic approach begins with using data to track lapsed customers and ask whether a brand’s recent decisions provoked them to pick a rival instead. Was the chance to retain someone missed? Did the brand’s channel strategy not do enough to combat churn?
Analysing your data can teach you many things from what consumers value in brands, to the types of content and creative that will grab their attention.
While the economic picture might remain negative for a while yet, brands can take positive steps to build loyalty and repeat purchase.
One day soon, when the economic outlook is sunnier, we will finally emerge from the cost-of-living squeeze. When that begins to happen brands must be ready to ensure that the new links they forged with consumers during the crisis extend into a brighter, mutually valuable future.
DECISIONMARKETING.CO.UK – Will data drive your cost-of-living crisis exit strategy?
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