Why Honesty, Humility, and Agility Will Make or Break Brands in this Inflation Crisis

11th Nov 2022 2 mins read

The Consumer Price Index (CPI) provides a measure of Irish price changes for goods and services purchased by consumers in Ireland, and yesterday it was revealed that it rose by 9.2% between October 2021 and October 2022, having risen by a further 1.6% in the month between September 2022 and October 20221.

We conducted a survey of our own with our ProMotion Rewards app users, and some of the responses revealed the state of our economy and how it is affecting the everyday consumer, and their wallets.2 When we asked people in the ProMotion Rewards app, “How has inflation affected you?”, some of the responses included the following:

“Cost of living is unaffordable, doing my weekly shop has become a massive struggle having to up our budget every month which has left us with a lot less to live on”.

“We have seen a massive increase in our grocery spend each week, so much so that I am consciously making a once-a-week trip to pick up a bulk-buy of reduced meat to stock up my fridge to offset the other increase(s)”.

“Personally, I find the worry having a toll on my mental health. I’m thinking of money all of the time and what use each penny can have”.

“Fifty euros worth of food now doesn't even take up a quarter of the trolley.”

“Our shopping is gone up. I’m being conscious of the cost of butter and milk when I use them. Butter gone from €2.19 to €3.39 and milk from €1.49 to €2.29, which when you go through 2L milk a day is scary. I’m really conscious of driving and using my electricity and heat too”.

“Price of groceries and energy bills have increased. 1 income household and wages haven't increased at all so feeling stretched at end of month.”

 

Consumers are engaging in value-seeking behaviours and clearly have lost a lot of confidence in how they spend and what they can rely on in terms of price. While the inflation and cost of living crisis is not going to be solved overnight, it’s important to understand what consumers are feeling, in order to meet them where they are at when it comes to messaging, offers and value creation.

It’s important for brand managers to think strategically in this current crisis to keep customers happy, maintain positive brand reputation, and in turn maintain brand loyalty. My suggestion for brands approaching this festive season would be to be and to communicate Honesty, Humility and Agility.

  1. Honesty. Tailor your brand messaging to match current consumer sentiment. What about taking a counter-intuitive approach? What about encouraging consumers to reduce their consumption of products like yours? For example, Patagonia, who entirely rejects consumerism, asks people to get more use out of the products they do have rather than buying more. While this message is focussed on sustainability, and on the brand living their values, it seems the more they reject consumerism, the more they sell. While this exact approach won’t apply to every industry, I think there is a message in this example for every brand to step their foot off the “sell, sell, sell” pedal.
  2. Humility. Be humble with the consumer – respect their intelligence by telling them why prices are increasing. I have no doubt that every brand is doing their best to counter/offset the impact of the inflated costs of production they are experiencing, to prevent passing it on to the consumer, so sharing those efforts would help the customer to empathise with the brand too. Simply increasing your prices, and not explaining why you’ve done so, is not a good strategy. Consumers notice, and to be frank, they get pretty annoyed when it seems companies are just passing their costs of production onto them. Be transparent.
  3. Agility. Where you can, give more value. While price increases, in a lot of cases, are unavoidable, there have been cases where companies have increased pack sizes at the same time, so customers feel that while they are paying more, they are getting more value for their money too. One example of this is Albany Bakeries in South Africa, who knew they would have to increase the prices of their goods, and added 4 extra slices of bread to their loaves. It’s all about how you make consumers feel, as you manoeuvre these market changes. Keep the sentiment positive, by putting yourself in their shoes - after all, we are all consumers!

I’ll continue to share the results of internal research conducted with our app users over the coming weeks, so stay tuned for more. Without taking the “sell, sell, sell” approach myself, I’d like to highlight the fact that at ProMotion Rewards, we are helping brands reach consumers directly, reaching the right people, at the right time, with the right message and value offering. Through our data-enabled consumer engagement platform, we use purchase data from physical and digital receipts to enhance efficiency of promotional spend, as well as to perform qualitative analysis to discover what drives specific behaviours in a given target audience.

Keeping your finger on the pulse of consumer sentiment throughout this difficult economic period will help keep your brand agile. Understanding where consumers are struggling will allow you to connect through honest and humble messaging, and ultimately, help your brand to survive and thrive through the downturn.

 

References:

  1. Consumer Price Index October 2022, Central Statistics Office. [10th November 2022]. Link: https://www.cso.ie/en/releasesandpublications/ep/p-cpi/consumerpriceindexoctober2022/
  2. ProMotion Rewards Proprietary Internal Survey Data. [Survey onducted 1st November 2022).

 

 

 

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