If paying attention to the media wasn’t part of my day job, I’d be very tempted to ignore it all.
War in Europe. The rising cost of what feels like everything. A backlog of waiting lists as an already stretched NHS heads into peak flu season. And, just yesterday, KMPG released its 2022 CEO Outlook study highlighting that eight out of 10 CEOs at the world’s largest businesses anticipate a recession in the next 12 months.
It doesn’t make for cheery reading.
With all this doom and gloom, it’s not surprising that over the past few months we’ve seen more and more brands communicating on price. Boots has launched an ‘everyday’ value range. Waitrose’s September campaign offered 1/3 off thousands of branded and owned items. And Asda is even limiting sales of its ‘Just Essentials’ range due to apparent soaring demand.
But not every brand can create a ‘value’ range, especially when global supply chains are under significant strain. Plus, I’m mindful that once you start trying to differentiate only on price, it’s all too often a race to the bottom. (Hands up if you’ve refused to go to Pizza Express on a Friday or Saturday night because you couldn’t use a 241 voucher?!)
This got me thinking – what other strategies can brands put in place to try and maintain loyalty when people’s discrepancy spend is becoming increasingly sparse?
According to the Data and Marketing Association, there are seven drivers of loyalty – functional, financial, compassion (society), brand charisma, compassion (personal), service and loyalty (this being in the guise of rewards and promotions).
I’m not surprised that ‘functional’ tops the list of drivers that are most important to us. After all, shoppers these days won’t accept a substandard product. But assuming your product aligns with the Ronseal school of product performance, ‘functional’ just isn’t inspiring enough to prevent people from switching to alternatives when deals and promotions are on the shelf.
So, what else should brands consider in order to tap into these other drivers of loyalty? Here are the five simple strategies I’ll be advising brands to do over the next couple of months:
Get reacquainted with your audience.
It’s time to move away from the basic demographics that so often lead marketing databases. Instead, considering how people feel during these turbulent times will allow you to understand the levers that impact their purchasing behaviour.
Retail Economics, for example, has segmented Britons into four personas based on how emotionally concerned and financially insecure we feel. Then consider where your product or service lies against four categories – essentials, treats, postponables and expendables. How might this change the way you communicate your messages?
Really understand your strengths.
Not every brand can be Patagonia and talk about societal compassion topics such as sustainability. (Though if sustainability isn’t a focus for you, that’s a significant risk to your reputation and something we should likely talk about separately).
However, there will be differentiators you can speak to. Talk to your engineers. Talk to your customer service reps. Talk to your talent team. Talk to your suppliers. Talk to your community. These are the places where the stories worth uncovering will be found.
Don’t underestimate the importance of a good experience.
According to Vonage, the top reason people switch brands is that they feel unappreciated.
Delivering what someone has ordered, paid through the card of their choice, when you said it would arrive, in good working order and with an easy returns process is just a standard expectation for shoppers these days.
So, how can you go above and beyond to surprise and delight your community? This is where advances in technology come into their own. If you’ve got a physical presence, utilise in-store space as a media channel. If you’re online only, revisit how you can apply all the first-party data knowledge you’ve acquired to deliver highly customised rewards.
If you’re across multiple formats, test how frictionless your omnichannel approach is.
While I’ve focused on technology here, don’t forget the human touch – I love it when I get a free hot chocolate in Pret for no reason at all.
Broker mutually beneficial partnerships to broaden your reach.
We all know the positive impact that authentic relationships with influencers can offer brands (and the damage that inauthentic ones can bring too!).
But for me, partnerships should go much wider. Think pure online pop-ups in nationwide physical retailers. Think tie-ups with logistic experts to manage better manage returns. These exciting and unexpected alliances can not only attract new audiences but also help alleviate potential pain points amongst your community that could encourage them to look elsewhere.
Remember the 70/20/10 rule.
It’s very tempting to slam on the brakes when it comes to spending as soon as the economic future looks bleak, but statistics have shown that there is 5 times more brand visibility for companies that maintained their marketing output in past recessions.
The key here is to ensure a pot is reserved for ideas that feel a “little out there”. Lean into growing trends such as immersive environments, social commerce, or even conversational marketing to strength your community in areas that competitors are likely to not be considering right now.
As PWC’s Customer Loyalty Survey earlier this year highlighted, the pandemic has made us more open to trying new brands. But that doesn’t mean there isn’t an opportunity for brands to demonstrate value and retain their communities as we head into a recession. In fact, as the DMA highlights, loyalty mindsets are still the default.
It’s just that in today’s hyper-connected world, we need a whole host of new Commerce strategies, tools, and technologies at our fingertips to stay relevant during a recession and win baskets long term. And it’s only the brands that woo their communities on the hundredth time they ‘click’ in the same way they did the first, that will do this. As Julie Austin, Chief Technology Officer at Everymile discussed with me recently, “you don’t forget how a brand makes you feel.”