The consumer price index recently climbed 7.9 percent, which is its highest level since the 1980s. This means that the consumer society we have been accustomed to in recent years is no longer. Now, consumers are thinking heavily about where they are going to shop, which products they can afford, and how often they are going to buy them. In the midst of economic uncertainty, the companies and agencies which are able to remain agile in marketing and focus on precision and return on investment will be the ones that come out on top.
Inflation has arrived. Here’s what all brands and agencies need to know in order to survive.
Find valuable customers
Brands that leverage their first-party data are going to have a better chance at prevailing through these difficult times. First-party data is the information a company collects directly from its customers and owns. It can enhance, complement, and even reduce the need for other types of data.
Brands who use this data are able to give their customers reasons to join online platforms or receive various types of personalized offers. In doing so, this opens new channels of communication with their customers & allows the brand to effectively relay information of any supply challenges they are faced with and direct them to new products or other ways of purchase if necessary.
It is crucial that marketers adopt strategies which embody brand loyalty to help deal with continuous economic challenges brands face. Really leaning into the data and creating loyalty programs can help a brand become more precise with their ad spend & truly understand which customers are profitable.
Avoid pausing ad spend
While it may be tempting to halt ad spend, it is very rarely a good idea to do so. Luke Stillman, senior VP of global intelligence at Magna Global states, “Don’t pull back on brand marketing, as tempting as it could be.” Stillman continues, “You want consumers to still have your brand top of mind and to remain loyal, so they aren’t thinking as much about the cost. Brand saliency must remain a focus.”
While advertisers will see an increase in prices for certain media, this should not act as a deterrent while putting your media strategy into effect.
There will always be changes in consumer behavior and consumption
Replace your pricing model
Consumers are intrigued by subscription and “product-as-a-service” models & companies are catching on quickly. With inflation on the rise, this gives companies a compelling reason to introduce these new pricing plans now more than ever.
Companies from all industries, from industrial production to education to health care to software have been implementing these pricing models over the last decade and have demonstrated that changing the way they charge their customers brings with it numerous benefits. When you replace prices rather than increasing them it often results in maintaining satisfied customers.
You can’t just sit still and cross your fingers that everything is going to be okay. You need to change your business in order to meet the cost of doing business or even reevaluate the conventional ways of doing business and finding new ways to be more efficient.
Changes in consumer behavior are far more important than the overall media cost trend than general economic inflation at the current rate when it comes to digital media. It is the indirect impact through consumer spending that is most directly impacted.