The news agenda is rife with announcements from the government on how it plans to tackle the rising cost of living. Naturally, consumers and businesses across every sector are concerned about how they will make ends meet.
For PR professionals and marketers, this means finding ways to balance budget cuts with showcasing brand value to their customers by making meaningful connections that drive retention and ultimately, instil loyalty.
A cost-conscious climate
It’s no surprise the current climate is impacting customer spending and as a result, customer loyalty. Latest research from Ello Group reveals almost half (41%) of consumers are spending less on out-of-home experiences, such as eating out, and a third (33%) can’t afford to spend on experiences with friends and family, due to the rising cost of living.
To add further fuel to the fire, almost three quarters (71%) of marketers admit customer loyalty is more challenging to navigate than ever before. On top off this, nearly two thirds (65%) have seen their budgets cut as businesses struggle to deal with rising costs themselves.
Tightened funding resource is coming hand-in-hand with bigger expectations. For brands to have real cut through with their customers, finding ways to show they understand their needs is vital. However, smaller budgets are making it more challenging for PR professionals and marketers to deliver impactful campaigns that resonate with their target audience.
Driving customer connections during challenging times
Make meaningful connections
As customers are forced to cut back on their spending due to their disposable income no longer stretching as far as it once did, brand switching has become more commonplace.
Customer retention is a huge priority for businesses. Whilst it has always been an evolving space, due to changing consumer values and behaviours, rising costs are impacting even the most loyal of consumers who feel they have no option but to shop around. Resulting in many PR leads and marketers feeling like they’re fighting a losing battle.
Trying to meet customer expectations while navigating budget cuts is having a detrimental impact on loyalty and retention. And, whilst we’re currently living in a perfect storm of unprecedented times, there are still avenues brands can explore to drive customer connections.
Markerter priorties in the current climate and the rise of brand switching
Brand priorities, according to marketers
Understand customer needs
The struggles associated with the current landscape has led close to half (43%) of consumers surveyed believing brands should be absorbing rising prices to support customers. Over two-thirds (68%) of marketers agree with this, admitting it's important for brands to be absorbing some of the rising costs throughout supply chains. But, in reality, it isn’t always feasible as brands are navigating market challenges and rising prices across the board too.
Despite the turbulent times, there are ways those across the sector can showcase they understand their customers to drive brand loyalty. One way is to utilise technology to elevate the customer experience. By investing in customer experience products, that open up avenues to personalise activity, there’s scope for brands to offer their customers the opportunity to experience more for less and get more value at a lower cost.
Also, businesses can use the data they have available to facilitate regular touchpoints that showcase how much they value each and every one of their customers. Whether that’s via personalised surprise and delight discounts that enable them to make costs savings, or just thanking them for sticking with you with advance access to something, there’s lots of opportunity to reward in meaningful ways to further drive connections with customers.
Transparency is also key! While it’s not always possible to pass on cost savings, to build trust and meaningful connections, businesses must be transparent on what exactly price rises look like and why they’re happening. Price continues to be a key purchasing factor, so brands should also be looking beyond the transaction to determine where else they can add value and improve their customers’ lives.
1,000 consumers were surveyed in July 2022 to uncover everything from what they feel brands are getting right to where they’re going wrong, and the sectors they feel perform well when it comes to making meaningful connections with them. In addition, 500 marketers were surveyed to explore the challenges they’re facing in the current climate, operating in an ever-evolving landscape filled with increasingly more obstacles from rising prices to declining trust in brands.
Written by Michael Kalli, managing director of customer engagement, acquisition and loyalty specialist Ello Group
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