Inflationary pressures and the threat of a recession can affect the bottom line of any business. However, if brands prioritize transparency, authenticity, empathy, and emotional connection in their marketing messages, they will not hemorrhage loyal customers. Many brands might need to wait until economic conditions recover until customers return to regular shopping levels, but the relationship will remain strong. At the same time, by prioritizing investments that will attract switchers, brands can continue to grow their consumer base throughout trying times.
To avoid alienating consumers, brands should avoid sudden price hikes. While most consumers understand that some price increases are necessary to keep the business viable, they find deception less forgivable. For that reason, it makes sense to incorporate inflation into marketing messaging. The issue is top of mind for many consumers, and they might appreciate the forthrightness as well as the challenges the company faces. After all, they have jobs of their own and know that last decade’s dollar does not go as far today.
One survey of more than 1,000 U.S. consumers suggests that rising prices are not necessarily a deal-breaker for brands if they communicate the rationale clearly; 86% said they understood brands may pass new costs along to the consumers but 91% said they would not blindly accept price hikes.
The economics of our times may be challenging but the technology platforms allowing shoppers to compare items and price points are not. This combination makes it a foregone conclusion that cash-strapped people will shop around for the best bargain. This does not mean customers just want transactional relationships with companies—in fact, the latest research suggests otherwise.
The widespread desire for deeper connections with brands and the low levels of loyalty indicate that there may be an opportunity to attract new customers through experiences that embody authenticity and empathy.