2.01 – Connecting With Your Customer In Tough Times
During major disruptions like pandemics, wars, or economic inflation, shopping behaviours and loyalty undergo significant changes. For instance, the COVID-19 pandemic shifted consumer focus from non-essentials to necessities. Consumers are now more inclined to switch brands if they find better availability or prices elsewhere, making brand loyalty more fragile. After enduring the uncertainty of 2020, many consumers are keen on saving more money to prepare for potential future crises.
Consumer Behaviour During Crises
A report by Alter Agents, summarised in a July 2020 Forbes.com article, highlighted several key points:
- High-Fear Consumers: Twice as likely to reduce purchases.
- Shopping Frequency: Over 50 percent of high-fear consumers intended to shop less, compared to 20 percent of low-fear consumers.
- Stability Over Income: Shopping fear is more influenced by feelings of stability than income levels.
Another study, reported in the journal PLOS ONE in August 2021, focused on psychological factors and consumer behaviour during the COVID-19 pandemic. It found a 90 percent increase in spending on necessities and a 36 percent increase in spending on non-necessities. The study also revealed that consumers tend to justify purchases during times of fear, a factor marketers should consider when crafting messaging strategies.
Strategies for Engaging Consumers During Tough Times
If your product is a non-necessity, how can you help consumers justify their purchase during times of uncertainty? Here are some effective strategies:
1. Lowering Risk
- Offer lower prices or 2-for-1 incentives to make purchases feel less risky.
- Reward shoppers with discounts for future purchases, helping them justify spending now with the promise of saving later.
2. Maintaining Control and Certainty
Consumers often save more and spend less during uncertain times. Addressing their fears and anxieties can help you succeed in any market atmosphere.
Addressing Consumer Feelings
Avoid dismissing consumer fears with messaging that only highlights what you offer. Instead, validate their concerns and provide solutions. For instance, if a consumer is hesitant about investing in cryptocurrency, acknowledge their fears and explain the benefits with real data. Transition the conversation from “Why Not” to “Why,” engaging consumers by addressing their concerns first.
Protecting Consumers
Reduce purchasing anxiety by offering protections that reassure consumers:
1. Flexible Contracts
Eliminate long, binding contracts that lock customers in even if their financial situation changes or your product doesn’t meet expectations.
2. Free Trials
Offer free trials for subscription-based services, allowing potential customers to test products without immediate financial commitment.
3. Generous Return Policies
Provide a no-risk return policy, letting customers try your products without fear of loss. Retailers with one-year return policies often see increased consumer confidence and loyalty.
Rewarding Your Customers
Everyone loves rewards. Quick responses to reward offers are common when consumers feel they have a strong chance of gaining something valuable. Consider the following:
1. Added-Value Benefits
Offer benefits like monetary discounts or extended contract terms.
2. First-Year Discounts
Provide discounts to customers who complete free trials, rewarding them for choosing your product over competitors.
Transparency and Honesty
Transparency about your products and operations is crucial. Here are some key points to consider:
1. Admit Mistakes
Be honest about any mistakes or flaws in your products and what you are doing to address them.
2. Truthful Communication
Be clear about your product claims, materials sourcing, and environmental and social stances. Misleading customers can lead to loss of trust and business.
Building Trust and Loyalty
Transparency and honesty are non-negotiable in maintaining customer trust. Misleading claims about your products can have long-term negative impacts. For example, a multi-level marketing company faced backlash when its “natural” products were revealed to contain toxic substances, despite claims of being toxin-free. Such deception can severely damage your reputation and customer base.
By addressing consumer fears, protecting them against risks, rewarding their loyalty, and maintaining transparency, you can build strong, lasting relationships even in tough times.
