How brands can create meaningful connections with consumers during a cost-of-living crisis
The cost-of-living crisis is hitting consumers hard, with recent research revealing that a fifth of UK households now have an average shortfall of £60 a week between what they earn and what they need to cover essentials such as energy bills, rent, transport and food
The crisis is impacting pretty much everyone, with 91% of adults reporting an increase in their cost of living between June and July 2022, and it is only going to intensify. According to the Bank of England, inflation is now set to rise to above 11% in October.
Consumers across the UK are tightening their belt and growing increasingly apprehensive - which will inevitably have a big impact on how marketers engage with existing and new customers.
Here are four ways brands can navigate the crisis and create more meaningful, lasting connections:
1.) Show your support
People remember when brands ‘do the right thing’. During the pandemic, those who stepped up to look after their customers built a loyal following, while those who put profits first suffered reputationally.
This is another moment in time when brands need to show that they ‘get it’ and are doing what they can to support their customers. With business costs also on the rise, however, companies will need to get creative about how they do this. For example, retailers could open a food bank for customers to contribute to, or they could facilitate the sharing of second hand clothes. These acts would help to make a difference to people's lives and foster a greater sense of community without a major investment.
2.) Look local
With finances under pressure and travel costs at an all-time high, people may start to stay closer to home for both work and leisure. So, there has never been a better time to prioritize the local community in marketing efforts. The great thing here is that people also want to show their support for local businesses during tough times, with 64% of our own members saying they shop locally more than they did two years ago. Local people and businesses have the ability to lift one another up to get through this crisis - and companies may benefit from shifting marketing spend to focus on people who live and work in close proximity.
3.) Be transparent
A consumer poll by the IPA revealed that the top things consumers want from brands to cope with the cost of living crisis are keeping prices fair (57%), freezing prices (36%) and offering more value for money promotions (33%).
The government has also been calling on businesses to cut prices for consumers, but unfortunately it may not be possible for brands to deliver on this. The cost of doing business is on the rise and companies may even need to put prices up to stay afloat. This doesn’t make them a ‘bad brand’. The best thing companies can do in this scenario is be honest and stay accessible to consumers - including responding to queries and complaints on social platforms.
4.) Make it personal
In tough times, there’s a heightened expectation for brands to engage with customers in a more human way. No one wants to misjudge the tone and come across as insensitive to the significant financial challenges consumers are facing. People expect brands to understand them, listen to their needs and talk to them like a friend. A simple and effective ways to do this could be sharing personalized content with specific groups of people, or promoting useful and relevant information as opposed to simply selling products and services.
During the pandemic, we saw how more people wanted to connect with and support those in their local area. We will likely see this continue through the cost-of-living crisis. Not only because there will be a practical need to stay close to home and save money, but because people will want to look after and support those around them. This focus on community will help to carry brands through the coming months and years.
Paps Shaikh, commercial director, Nextdoor