Unfortunately, the cost of living crisis will get worse before it gets better. And, unsurprisingly, price is already the number one driver for customer switching and behaviour shifts.
You only need to shop the aisles of Sainsbury’s or Aldi to see perplexed Waitrose customers trying to navigate new floor plans. But it’s not just the supermarket shop, it’s our energy providers, insurers, and petrol stations and it stretches way beyond these necessities, influencing discretionary purchases and customers’ lifestyle, entertainment, and travel choices and plans.
The result is businesses need to act fast to retain customers and build brand resilience, otherwise, they risk getting sucked into the price-led race to the bottom. Once again, CX will be a key battleground here. The hastily created, yet fragmented experiences, forgiven during the pandemic will be the first to feel the pressure but even those who were taking a more customer-centric approach pre-covid, can do more.
Here are five ways businesses can build more purposeful products and experiences to further differentiate their brands and position themselves as long-term companion to their customers.
Much has been made of businesses taking a customer-centric approach in recent years however, to be truly focused on your customers, brands must be empathetic to their needs and the context of their needs, especially in a time of crisis.
Insight and data-driven design is a great starting point but supply chain pressures, renewed and increasingly strict lockdowns in China and the impact of the war in Ukraine are resulting in the cost of living inflation spirally to a crisis point at ever-increasing speed. To win the hearts and minds of customers (while retaining a share of their wallet), business leaders need to show humility, understanding, and action, to ensure their brands are creating the digital support services to help customers survive these hard times.
Out of touch suggestions of star jumps and sending customers socks to keep warm along with condescending advice to buy own-brand foods and learn to cook, will only drive customers away and expose the gulf between the customer and the leaders of the businesses who seek their custom.
Now more than ever is the time to build products with a purpose as opposed to those focused solely on profit.
Product and digital experience teams need to listen to their customers, understand the relevant hardships associated with the sector in which they operate, and innovate quickly. They should refocus backlogs on features that will have the biggest impact. Features that support customers helping them work to a budget, providing money-saving hacks, and giving them access to human support and advice.
While price will increasingly influence decisions, customers will also become more risk-averse as they feel the squeeze. This provides a great opportunity for brands to switch from a pure sales strategy to one that helps their customers buy. They can provide more tools and services that empower people to feel more informed, confident, and most importantly, in times of crisis, in control.
Not only will this increase advocacy but also decrease price sensitivity.
However, if you really want to build trust, then transparency is key. It’s inevitable that, despite customers having less to spend, some businesses will have to raise prices and/or cut products over the coming months. That said, if brands are proactive and open with their customers and clearly explain why they have to do this, customers won’t like it, they will at least be more understanding.
Making price increases and hoping people don’t notice, is not a strategy.
Drive product innovation
A bigger and bolder and more rewarding move might be to look at product innovation as a way really getting to grips with the problem.
We saw this in spades during the early days of the pandemic and the initial lockdowns, businesses pivoting their offering and launching new products and services, with many winning new customers and revenue streams along the way.
While the current crisis is having a less universal, overnight impact, it is likely to last well into next year (the optimistic view), and the longer it goes on the more impactful it will be, both in terms of severity and reach. There is again an opportunity for businesses to consider how they can support customers through this period. Think; of payment holidays, partnerships (everything from mental health support to food banks and community projects), lift-sharing facilitation, and hyper-local product swapping, all dependent upon relevance to the sector the brand operates within.
The above 4 solutions are the sum parts of effective CX in a time crisis but don’t fall into the trap of assuming you know what customers want, what their drivers are, and what will resonate the best with them.
Set aside time to better understand the changing needs of your customers, explore attitudinal shifts, and before investing, validate the features, tools, and concepts that will have the biggest impact now and in the future.
To learn more about how we can help bring meaning and value to your customer data to drive rapid results, speak to us today.
Call us on: +44 20 3828 6440