How to retain budget-conscious consumers as the cost of living rises
Here’s how you can adjust your marketing strategies to maintain customers and tap into the current budget-conscious consumer market.
As the cost of living continues to spiral upwards, 63% of Australian consumers are adapting their behaviours to make ends meet, with many prepared to switch to cheaper brands, reduce their spending on non-essentials, drive less and turn off heating and cooling systems to save money.
The increased reluctance to spend is also affecting businesses. To survive, businesses must evolve and market themselves in a way that aligns with current consumer sentiment.
Here’s how you can adjust your marketing strategies to maintain customers and tap into the current budget-conscious consumer market.
Consumers are less willing to spend
In times of financial crisis, it is essential for your business to focus on delivering value over price as 41% of all consumers want good value and are willing to spend more for it.
This doesn’t necessarily mean large-scale campaigns or a major change of direction, but rather an increase in meaningful communication with your customers.
For example, an appliance brand offering budget-friendly recipes and tips is a simple and practical gesture of support. A gym sharing the importance of exercise for tackling stress and anxiety can also have a similar effect.
On a broader scale, justifying price increases by explaining the long-term value of your products to your customers should help to retain them, and attract new buyers. One study found sales increase by up to 56% when shoppers know a product will last.
Consumers seek transparency
Honesty is essential for strong customer relationships. As consumers become more conscious of their spending habits, transparency is the key to justifying the impacts of raised prices. Studies found 94% of individuals will stay loyal to a transparent brand, with approximately 75% of them also willing to pay more for goods or services from a brand they believe to be authentic.
Clearly explain your business’s price changes and the decision-making process behind them, as this will help build and maintain a sense of trust among your customer base.
Online search terms are changing
As more people adjust their finances to live in line with a shrinking household budget, the Google Global Market Insights team have discovered a drastic increase in budget-related searches, with 70% of consumers saying they are concerned about the rising cost of the items they need and desire. As a result, searches for travel (“cheapest countries to visit”) have grown globally by more than 7000% year on year, searches for essentials (“cheap food near me”) have grown globally by more than 70% year over year, and searches for non-essentials (“cheap flight tickets”) have grown globally by more than 100% year on year.
To increase your online visibility, it is essential to optimise your website to align with trending search terms. Whether your business offers sustainable products or budget-friendly deals, writing content (for example, blog posts) describing the value of your goods and services whilst tying it to current events will help to improve your SEO and pull in more traffic.
