Things are happening, and our strategy team would like to share two main cultural and socioeconomic events that are, or may soon be, affecting consumers’ buying habits.
I believe it’s important to consider what a consumer might think and feel about what’s happening outside of the buying and selling of goods. Many factors influence how and when a consumer decides to spend. Besides natural disasters, armed conflicts, or shortages, there are other events that occur more frequently and can change habits for everyone.
Rising Interest Rates
One current trend is that the Federal Reserve recently indicated another potential rate hike in September. The year 2017 ended with an increase of 25 basis points as inflation was around 1.7%. The key figure, 2%, is what the Federal Reserve considers a suitable inflation rate for price stability and full employment. As we approach it, this is a key sign for several reasons beyond interest rate hikes affecting mortgages, car loans, and credit cards. For marketers, it suggests that consumers may look to stretch their money a bit further.
Additionally, we recently entered a 10-year high in core inflation. What this may mean is a more fiscally conservative general population moving into 2019. Spend will continue to occur, albeit cautiously, and marketers may need to increasingly focus on timelier offers that pair products with emotional triggers, as well as clearly differentiating their product from others on value. (See our previous posts on emotion and rational messaging.)
Trust
The other thing that’s happening is general distrust across all institutions in the U.S. According to Edelman, there was a 37-point aggregate drop in trust from 2017. A closer look reveals greater distrust across platforms (social, search) and an increase in trust among journalism. And this makes sense considering the privacy issues, legitimate news concerns we’ve experienced as of late. For marketers, it may mean that trust will be harder to develop over time if your business is focused on scaling and keeping customers long term. Questions marketers should consider are:
- How do I start this relationship right to elicit repeat buying, engaging and advocacy?
- How do I create an experience early on to provide customers with a sense of comfort, belonging and trust with my brand?
- What are my competitors doing to generate trust over time?
So, in a world where trust could be waning, and prices across industries may be rising, how do you break through with marketing and get consumers to react? Offers aside, and assuming you have mechanisms that deliver timely and relevant messages, you address trust by aligning your product with trust, and you address cost concerns by directly challenging perceptions about your competitors with value messaging and elements of emotion. Why would this be?
Mind-Sets
We return to the focal concern for marketers, and the desired state, of messaging consumers in moments where we understand their concerns, their anxiety, their excitement. From Think with Google (July 2018):
Knowing when your audience is most receptive, moments when you can really capture
someone’s attentionor change their mind, and then meeting them with the right message…
This is truly the desired state for marketing, and in future posts we can share some concrete examples and ideas around the mechanism required to operationally pull it off. I hope this is useful in planning for 2019. Our number-one suggestion is to take what’s happening in society and begin applying it to your marketing programs, starting with building a long-term, trust-oriented focus to acquire and keep customers. As always, it’s important to look at culture and other external factors when trying to evaluate a consumer’s mind-set. Otherwise, we’re only evaluating a small piece of the iceberg.