The current cost of living crisis is affecting us all, from individuals to business and these sky high inflation prices are set to stick until the second half 2023 before settling down. With energy prices rising, food increasing and shop prices skyrocketing, this has led to the highest inflation rates in the UK for over 40 years, forcing a lot of people to change how they live their lives.
From a marketing perspective, marketeers will have to become as flexible and responsive as possible to adapt to consumers’ shifting buying behaviours. This will be the key to helping brands make it through the crisis.
Let’s dive into how the crisis will affect the B2C and B2B marketing industry, what consumers’ spending habits are like in 2022 going into 2023 and what you can do to survive.
People are concerned about their personal finances more than ever. This has led to an all time low when it comes to consumer confidence. The overall state of the economy is being reflected in how customers are now thinking about their money, how to spend it and where they can cut back, leading to a Consumer Confidence Index score of -44 which is a record breaking low. On average, the lower the consumer confidence score, the less likely people are going to be spending money on things that are not essential.
In April, a survey was conducted by KPMG asking consumers about their spending habits for the remainder of the year. Here’s what they found.
- 51% spending less on food and drink shopping
- 31% will spend less on transport
- 18% less on fitness
- 56% are planned to order less takeaways
- 47% will spend less on experiences such as the cinema
- 34% will spend less on beauty products and services
- 26% less on subscriptions
These results are a clear indicator that consumers are worried about the cost of living and have even cut back on items that are considered essential.
Marketing – how will it change?
The biggest challenge marketers may face in the coming months is brands cutting their marketing spend and scaling back. 85% of UK consumers think that brands should cut their marketing spend in hopes of this reducing the cost of products. This can be extremely frustrating, especially moving into the Christmas period, however it’s important to have empathy and position ourselves as the consumers too.
With that being said, there are ways to adjust your strategy to make the best of the uncertain times ahead.
1. Showcase your value
Customer confidence is at an all time low. So this is the time where you should be confirming and reiterating your brand values and showing consumers why you are a brand they should invest in.
2. Focus on customer loyalty
People are more likely to be buying from brands they already know and trust in a bid to not waste money. This is an opportunity to reward loyal customers who will in turn be the consumers that keep your brand alive.
3. Adjust your SEO strategy
In these times people will be searching for different topics and searching for more essential items. This is the time to look at what keywords may be trending and searched for on all platforms as they may no longer be what you are expecting. Doing this will increase your visibility and traffic to your channels.
4. Focus on organic content and increase your online visibility
Organic strategies will not require as much of your marketing budget to execute. Not only that but there is a lot of value in growing your brand presence organically. People who engage with your content will have found you organically and if they decide to follow or buy, you truly know they are a loyal follower. The rise of TikTok has really shown us the power organic content can hold.
What about B2B marketers?
While private consumers in the UK are protected somewhat with caps on rising bills, businesses do not have the same support system in place. Therefore many businesses are putting measures in place to protect themselves by having hiring freezes and potentially cutting their marketing costs.
Navigating these challenging times may prove itself difficult, but it is doable.
1. Leverage what makes you unique when it comes to presenting yourselves to other businesses.
What makes you different, why are you the best investment and fit for the job at hand. Understanding what makes your brand unique will allow other brands to resonate with you.
2. Build your email list
As we mentioned earlier, customer loyalty is extremely important for the survival of your business. An email list will offer the chance to reach out to old leads, previous clients and re-target one time buyers. A strong CRM system is vital to keeping your business healthy through a recession.
3. Reviews and testimonials.
The best way to secure business is by giving evidence that you are good at what you do. Showcase that you have happy, satisfied customers and your new potential client can have an amazing and positive experience with you. Let’s be honest, whenever you want to invest in anything, I am sure you look at reviews first. Nearly 79% of people say they trust reviews they read online. If you haven’t got any out there, it’s time to start asking for some.
With that being said, marketing will change exponentially. The impact of the rescission can be fatal for business, but you have to be flexible, resilient and always turn to marketing for a chance of survival. Your marketing and branding is what will help you through any crisis. Instil a recession proof plan and hone in on your current customers and nurture them.
If you want to up your game and create a recession proof marketing plan, we are just the people to call.