The UK is experiencing its worst inflation in forty years. In a perfect storm of price hikes, rising interest rates, and stagnating wages, many Britons are facing existential fears about the future. Everyone is talking about the cost-of-living crisis, from economists and politicians to pundits and brands, when it comes to consumer brands – the talk is wearing thin for UK consumers. Big brands are often perceived to benefit from inflation, or even drive it. Meanwhile consumers see corporate net margins rise to record highs, creating frustration among the public, leading to a “Us vs. Them” mentality.
During times of crisis brands generally rely on empathetic messaging, but this tactic is losing its appeal, especially as some are getting it very wrong. OVO Energy’s ad suggesting that consumers snuggle their pets more closely to stay warm comes to mind. What’s not being understood by brands is that many UK consumers are in a period of unprecedented uncertainty – especially those with young families – and this requires new kinds of customer insight and response. Increasingly brands that have come out of the pandemic seem to know their customers less well than they did before, despite a wealth of observed marketing, browsing and purchase data.
“Today’s consumer plight needs to be seen through new lenses, with the application of natural language analysis, and cognitive segmentation, marketers can understand the human drivers behind the data. Most important is to understand the palpable sense of dread consumers are feeling about the future.
At lower income levels, behavioral insights are critical to understanding what consumers really need, as we find in these audiences:
A greater belief in fate and high sensitivity to the idea of things being “out of control”
Less openness to new experiences
Prevailing prevention-focused mindset with the fear of loss
Analysis of Big Data doesn’t provide consumer empathy points if there is no understanding of the drivers of human behavior. The key to creating these initiatives lays in the intersection of:
Empathy – genuinely understand the needs and behavior of consumers
Action – inspiring the consumer to do something they perceive as doable and beneficial to them
Brand Promise – a brand must create an evergreen experience rooted in genuine value to the consumer to create trust
The brands that come through this tough period with their integrity and customer bases intact will be those who have been seen to make a material difference to consumers. And it’s by moving beyond traditional promotions and messaging strategies to embrace Value-based Innovation that brands will deliver meaningful and authentic impact for their consumers.