The cost of living crisis has been escalating since the early months of the year, with a comparatively stagnant economy being piled on by inflation, rising fuel prices, and now the ever-increasing energy costs. In the UK, a rather commercialised country, this has the big brands a bit worried.
Regardless of the sector, big-name brands get to charge higher prices because people will spend more to buy something that they recognise. It comes from years of work in advertising, product or service branding, and even aisle positioning, all to make their stuff seem better than all of the rest.
Now, while there are some politics in play to attempt to help major food companies – particularly those that deal in snacks and treats – still sell their branded goods, the people have the final say. Common sense and many forecasts dictate that the days of brand loyalty are numbered as the cost of living crisis clamps down.
Cheaper options can be just as good; the people know it
Over the last couple of years, austerity has hit, and while it’s seemingly getting worse now, many struggled when work suddenly wasn’t an option. So, it’s prepared some for this kind of issue, but perhaps not to the same degree. In any case, customers are very much open to shopping around for lower prices and more helpful services.
Now, the rising cost of living is hitting hard, with the prices of everything from food to fuel surging. People without fixed mortgages or already high energy bills worry about the size of each month’s payments. With banking services becoming even more central to people’s everyday lives with prices on the rise, customers will be more likely to be less brand loyal if others can offer a better, more helpful service during the crisis.
This means offering more than a convenient app that presents the ins and outs of accounts. Brands need to go above and beyond to make customers feel like they’re getting help without extra cost. This can come in the form of informative pages, guides, or even online webinars. Going further, a banking platform that offers features like spending insights and budgeting tools can be seen as more useful than those that don’t, wearing down brand loyalty.
To find better prices, people would usually utilise the internet to compare the prices of vendors to see which sells their brand cheaper. Now, of those who define themselves as brand loyal, three-quarters say that they would shift to competitors if they’re cheaper or more convenient. Some 79 per cent of consumers intend to keep on exploring rather than remaining brand loyal.
The cost of living crisis will only compound this now-mainstream behaviour, with the defining factor for customers sharply becoming the price tag. Helping is the swathes of comparisons, reviews, and insider insights that can point people towards the best alternatives. For example, there are brand vs value pick ratings and reviews aplenty, with the savings on baked beans alone being 68p per tin, and the value pick is rated better.
Switching made it even easier
Brands are going to need to come up with ways of becoming more cost-effective to consumers, as there’s a myriad of ways to facilitate switching. The big one, of course, is the wide array of comparison sites. Over 80 per cent of consumers have used these sites, and at least 40 per cent of people use them once every three months. Beyond comparison sites, services offer benefits to those who switch and leverage it with review scores.
Being competitive by comparison is one thing; it’s another to be appealing to switch to – and that comes down to the quality of the product. Even before that, though, customer and trust reviews help to facilitate the idea of switching. There is said to be something of a ‘secret ratio’ out there when it comes to review scores. While stars do a fair job – with anything above 4.0 being considered good, 3.7 to 3.9 being middle-ground, and 3.5 and below being sub-par – individual reviews have a hefty impact. The ratio is that it takes 40 positive customer reviews to counter the damage done by a single negative review. More and more, people will consider the price within a review.
The cost of living crisis will test even the most devout brand loyalists, and there are more than enough reasons given online to make the switch if the inkling comes along. Brands will likely need to adapt.
