The cost-of-living crisis should be a wake-up call for brands
Mike Fantis, VP and managing partner at London-based DAC Group, argues brands should be doing more for local communities in the cost-of-living crisis, or risk damaging their reputation.
The cost-of-living crisis is a global conversation that is top of mind for brands. Businesses are shifting into survival mode; and consumers are too, but what do they expect? New research reveals that 87% of customers expect brands to communicate with them just as much – or even more – as households face up to increased financial pressure.
Getting the messaging right is essential for brand reputation during tough times; as is engaging with consumers and local communities throughout. But many brands are not doing this even now, let alone as the crisis starts to bite.
In a recent audit we conducted on brand engagement with online customer reviews, the three brand categories we found to be least engaged were supermarkets, food and drink, and finance. In particular, some supermarkets are not engaging with customers online at all.
Yet it is these same three brand categories that consumers believe have the most credibility when it comes to communicating during the cost-of-living crisis. Whereas the three categories with least authority are gaming, fashion and beauty.
So, what does this mean for your brand reputation?
Any goodwill can only go so far, and these findings are really a wake-up call inspiring all brands to act; not least because consumers want them to.
Food brands and grocers have an important and unique role for consumers and communities during this economic downturn, so it’s no surprise consumers expect them to take action. But by taking a few simple steps to build better relationships at a time when customers need it most, all brands have a chance to add real value to their communities and also avoid long-term brand damage.
Brand marketers often find personalisation a daunting task but when brands narrow the focus to local communities it’s impactful. This is where online reviews, often overlooked, can be a useful tool for engagement.
Reviews offer valuable insights directly from the customer’s crisis point of view. When acted upon, brands can discover what their customers actually want (or don’t want) during tight times, and tailor their offering to what’s important right now at a local level.
Beyond listening to customers and acting upon what they say, brands can forge closer links with local communities to show they care. These could come in the form of charity partnerships, or hosting events or workshops that provide advice and share offers and deals that aren’t linked to incentives.
Your actions here, whether in the type of events you organise or the charities you associate with, will communicate a lot about your brand values and how you value the wellbeing of your customers overall. The short- and long-term impact on your brand’s reputation should not be underestimated.
In our experience, concentrating effort into building closer community ties ultimately generates trust and customer loyalty, which will put you in a better position to benefit when the post-recession uptick comes. Conversely, companies that ignore their customers’ wellbeing, or are perceived to be failing to act in their best interests, risk significantly damaging their reputations.
The looming energy crisis is a case in point. Any energy companies that listen to their customers’ needs and take proactive action to address them will see increased loyalty now and over the longer term. For most though, the damage has already been done. However, it’s not too late for other categories.
While it might feel counterproductive to invest at a time when financial departments are asking teams to cut costs, it will save significantly on any post-recession marketing campaigns to restore a shattered reputation.