Saturday, April 1, 2023

Consumers Brace for a Significant Spending Cut

In a pessimistic economic context, the need to have competitive products or services is increasingly accentuated in consumers. The inflationary environment is challenging and the outlook for consumption dynamics remains conservative, preparing many consumers for a considerable reduction in their spending.

The report “New Times, New Rules, 10 challenges for unpredictable times”, prepared by the firm Llorente y Cuenca (LLYC) on the occasion of World Consumer Day, shows that spending reductions are evident in different commercial and personal scenarios .

People show more and more interest in making this decision (89% more), reaching the levels registered by the social conversation in 2020.

The brand’s response

In times of uncertainty and recession, customers value the care and service they receive from a brand. Therefore, it is important that it offers a quality customer service to maintain contact with them and increase their loyalty.

Customers are increasingly active and value good service, but they also punish, through their digital conversation, what they consider to be a bad experience. In this sense, it is crucial to identify the different ways in which the business sector can reach a cautious and austere consumer, putting their new needs and preferences into perspective.

When decision making becomes difficult due to the economic context, customers value brands that offer them “something more”. For this reason, a solution for brands may be to offer them the chance to learn, to grow in their areas of interest, or loyalty plans that are consistent with their lifestyles.

Therefore, offering education, training and loyalty programs is an effective way to maintain contact with customers. This can include special benefits that seek to solve the real pains of consumers.

Staying current and offering innovative products or services is another way to attract and retain customers. Consequently, it is necessary for the brand to continue to evolve its offer of products or services to meet the changing needs of customers in these times. And, in addition, that involves the client in these innovation processes, as part of the test.

This will be appropriate for the moment in which the client is looking for cheaper options: it will be more difficult for him to choose another alternative if we can offer him exactly what he requires, thanks to active listening.

Finally, it is important to understand that, although in times of “lean years” there is a tendency to work hard on promoting or reducing prices, creativity in the pricing model does not mean setting very low prices. Instead, it’s about finding ways to deliver value to customers through different pricing approaches or by committing some revenue to the success of the customer business.

The key to this challenging panorama, with a nervous consumer and less purchasing power, will be to generate strategies that are based on data, but it will also be necessary to creatively approach the components of the business model, putting the user at the center of everything.


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