Managing brands in inflationary times 

The writer, Elie Wiesel said: “the opposite of love is not hate; it’s indifference” - a fate that many brands may come to fear in the current climate.

The ‘post pandemic’ era - if we can call it such - has proven a strange time so far for brand owners. Many were exhausted one way or another by the last couple of years - either by the sudden loss or sudden influx of business, both proving overwhelming in their own ways. As everyone seeks to rebuild with limited resources and staff shortages, many are struggling to find equilibrium, whether it’s maintaining customer service standards and product quality, filling their supply chain, coping with massive hikes in energy costs, or simply paying suppliers on time. 

 

As if that weren’t enough, as the cost of living continues to rise and customers become more and more cash strapped, they become more selective about their purchases. Each purchase decision becomes a bigger one, each experience of the brand carries more weight as purchasing it forms a larger percentage of one’s precious income. One experience or product is purchased while another is sacrificed, so the chosen items had better be worth it. So, which category does your brand fall into - ‘savoured’ or ‘sacrificed’?

 

As a nation, we’re in a quandary - multiple most likely, but one in particular I wish to discuss. We need people to keep spending money in order to keep the world turning, but individuals will have less and less disposable income to spend as the spectre of inflation returns. Anxiety is high, tolerance is low, and everyone is much more sensitive than they might otherwise be to price as well as standards. 

For brands it is all too easy to chase your tail so determinedly in a period like this that you forget who you really need to be paying attention to - your customers. 

 

Of course, there are numerous factors about an individual consumer’s position that will inform their level of expenditure in different areas. Many will simply not be able to afford to purchase certain things for a period of time, but one hopes that will change again in the not too distant future and they can return to a greater level of normality. For them, it’s important that their memory of the experience of your brand are worth coming back to. For others, who strive to remain active customers, it’s even more important that they feel their loyalty is rewarded - if not they are more vulnerable than ever to switching to an alternative supplier. 

 

One of the worst things that can happen if a customer is unhappy, is not (contrary to popular opinion) for them to complain on Tripadvisor, Trustpilot or social media, but rather that they don’t bother to complain at all. They just quietly leave before you even know there’s an issue. You are neither in a position to win them back, correct the problem, or even necessarily identify what the problem is in the first place. It’s a circumstance that leaves you wide open to repeating the same error time and again. Wars might be won one battle at a time, but they are lost the very same way.

 

Then there is the torrid issue of price promotion. In the grocery markets, consumers are used to the practice of variable pricing to encourage changes in behaviour: 

And so forth.

 

In the upcoming, price sensitive times, strategic price discounting will be a core element of positively managing the value proposition of brands. It isn’t enough to simply discount however - done badly that can lead to damage to your brand as well as unsustainable economics.

 

Ask yourself questions like:

There’s some deep thinking to be done.

So, how will you reward loyalty, maintain standards and retain relationships, whether it’s keeping customers loyal to you now or leaving the door open with good memories and good feelings for when they feel able to to return? Focus on your customer - their brand experience and your reputation with them. And don’t forget their perception of value for money.

 

It may feel like a climate in which you have no time to think about each individual that purchases from you - that all you can do is hold on for dear life, grabbing every sale that comes your way like a life raft until the waves stop crashing. Look closely however, and you will see that it’s not the individual purchase that you need, but the ongoing relationship with the individual making the purchase. They are the people you need to not only stay afloat, but to swim - look after them.