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Challenging Market Forces Meet Rising Consumer Expectations
November 30, 2022
Author: Chris Pritcher, SVP, Customer Strategy at Merkle
If the chaos of the past few years has taught us anything, it’s the value of investing in our physical and mental wellness. But today’s universally higher prices have now caused households to shift that focus to their financial wellness. I believe consumers are trying to move beyond wellness to building a sense of financial joy. Asking themselves “how do my financial decisions further my joy?”
This pursuit of joy has driven a rapid escalation of consumer expectations about the experiences they have with brands. In a recent Merkle survey, 73% of consumers stated that the experience drives their buying decisions. Going further, one out of three consumers stated they would leave a brand they love after only ONE bad experience.
As we begin 2023, the combination of consumers’ search for financial joy with their elevated experience expectations will make customers harder to acquire, more difficult to retain as they are engaged by your competition, and more determined to spend less or trade down purchases to regain some control of their lives. All is not lost. Sure, these are challenging times, but brands can still find success by embracing the right approaches.
Six Success Themes for the Start of 2023
Marketers must accept that, in difficult times, their consumer experience is just as important as their product. Consumers will remember which brands are partners during the recession and which brands were taking advantage of a challenging marketplace. A downturn is the time to invest in ensuring that your brand is creating the best possible experience from start to finish. As a marketer, securing and improving those experiences requires immediate action on two critical fronts.
Engage Your Customers: Every consumer interaction offers an opportunity to create a mutually beneficial value exchange. You must rapidly transform experiences to adapt to the world in which we all live and the expectations of your target audience.
Advance Your Approach: To compete, you must leverage every potential advantage. Your technology, talent, partners, and operating model must be elevated to meet the highly agile needs of your audiences.
You can drive the necessary transformation by focusing on six critical success themes.
1. Demonstrate Empathy
This is a lesson learned during the pandemic and heightened by the latest market forces. Acknowledge and validate how each consumer is feeling to position yourself as a partner in their solution.
2. Practice Transparency
Be clear, concise, and honest about what consumers should expect from your brand, your products, and your services.
3. Deliver Relevance
Deepen your understanding of the customer and segment in each moment to create a relevant value exchange.
4. Prioritize and Personalize Offerings
Let consumers know their options and flexibility. Advise them on the products and services that are right for their needs, not your business plans.
5. Maximize Value
Maximize your brand’s value from existing resource and technology investments. Marketers can no longer settle for partial use of the powerful tools in their toolbox.
6. Invest and Grow Through It
Grow through the challenging times versus saving your way to safety. Wise investments in consumer experience will provide higher returns during a downturn.
How These Themes Take Shape Across Industries
The methods for implementing these success themes depend both on the industry and on the individual circumstance of each consumer. Some of these shifts will occur as a natural part of a marketer’s strategic analysis, while others may be counter-intuitive or require rapid transformation.
To prioritize the right offers, financial services brands will logically shift toward balance transfers and rate-guaranteed products like CDs or annuities. Market leaders will consider a shift away from promoting banking products and into guidance/coaching services. Nonprofit fundraisers will highlight monthly sustainer offers over larger, one-time gifts or provide non-monetary opportunities for their constituents to stay involved with their preferred causes. Transportation brands will shift product priority toward electric vehicles and fuel-efficient offerings as gas prices continue to rise. Insurance marketers will proactively offer methods to reduce premiums, such as bundling multiple policies. Travel brands might alter loyalty incentives to match changes in behavior as travelers reduce trip frequency but increase spend on the one “big trip.” Healthcare companies will recognize the increased demand for quality virtual healthcare to save on expenses.
Delivering consumer relevance will require brands in retail and other industries to focus on improving their hybrid shopping experiences through integration of app, site, and brick-and-mortar experiences, enabling consumers to more thoroughly research products. Market leaders across industries will acknowledge the need to adjust messaging based on ZIP Code, as regions experience inflation impacts differently over time, or offer concessions such as flexible payment options, even on products and services not impacted by inflationary pressures.
Understanding more about the consumer and focusing on their needs, instead of your own, will enable market leaders to grow through these challenging times.