How brands can successfully navigate the cost-of-living crisis
All brands are now having to assess or reassess their strategy for managing the cost-of-living crisis and consider how this impacts their marketing and communication. In this piece, Alex Lewis, Co-Founder of Revolt, argues that a clear three-step approach is required and shows how leading brands are taking action.
The cost-of-living crisis is set to make the next 18 months one of the toughest periods in living memory. The huge pressure on incomes affects just about every product and service we buy. It affects people as customers, and as employees.
While there were short-term triggers for the crisis – not least the Russian invasion of Ukraine and complications in global supply chains still fragile from COVID disruptions – longer-term, underlying issues have laid the foundations for making this much more painful for many families. As a result, all brands are now having to assess or reassess their strategy for managing the cost of living crisis and consider how this impacts their marketing and communication. Any brand that doesn’t respond and act on the crisis accordingly may be seen negatively as we come out the other side.
Crisis management involves dealing with threats before, during, and after they have occurred. Assessing how leading brands have been tackling the cost-of-living crisis, Revolt has translated these three phases into guidance for strategic and tactical action for brands.
Act swiftly to both the reality and perception of crisis.
The fundamental emotions that underpin the cost of living crisis are uncertainty and fear. When we’re scared or uncertain, we look for things that makes us feel in control. Brands have both an opportunity and a responsibility to help consumers be or feel in control. HSBC is offering customers and non-customers alike an online financial health check, with recommendations of actions that can been taken to improve finances. And this approach to control can be applied in most categories. Subscription meal delivery business Gousto launched its ‘Ovenless Sunday roasts’ among a package of options that give people more control over the way they cook their food.
Part of helping people to feel more in control is giving them clarity. Amidst the current complexity of the crisis, brands have an opportunity to be clear on how they provide value. Tesco Mobile has created a light-hearted campaign to talk about the ways they save customers money, showing that clarity doesn’t have to come at the expense of your usual tone of voice. British Gas recently ran advertising to provide straightforward information on what the new price cap means. Its clear approach found its way onto talk shows as a benchmark for how the government could have gone about things.
But even with control and clarity, many families are still facing some very difficult decisions.
When people have to deviate from their normal behaviour in a way that feels like a sacrifice it can have implications for mental health. Therefore framing options as choices rather than cut-backs can create a more positive role for brands. Showing how a benefit can extend beyond saving money can not only differentiate a brand, it can also help people feel good about themselves. Sainsbury’s recently launched Sainsfreeze, showing how unused fresh food can be frozen. This initiative helps people to save money but is also helping them to be more sustainable.
Adjust strategies in ways that reflect the changes we’ve undergone.
While the crisis is affecting everybody, there are particularly vulnerable groups who are likely to be more affected: women and children, people with disabilities and minority groups. Brands should consider whether they can tailor products or services to support those who are most vulnerable. Heinz works with Magic Breakfast to provide nutritious breakfasts in schools. In response to the cost of living crisis, Heinz launched a campaign promising to donate one breakfast for every four cans purchased.
A crisis is an opportunity for companies to show commitment to their brand promise, but it takes real courage for businesses to look for and commit to new opportunities. This is why having a business purpose is so important in times of crisis. Being clear on why you exist, and what you offer to your customers, enables purpose-led businesses to hold tightly to a long-term strategy, while allowing for more flexibility for testing new ideas in the short to medium term. Iceland has had the confidence to recently launch a micro loans programme which builds on work they’ve been doing to better understand their customers’ needs.
And in this time of crisis, brands must keep sight of the fact that what’s good for the planet is good for the pocket. The overlaps between cut-backs and sustainable behaviours represent a huge opportunity area for brands. Think about reuse. Rental schemes that remove the need for ownership, or subscription programmes that reward the reuse of packaging. Think about recycling. Less than 50% of a UK household’s waste is currently recycled. And think about reduction. While cutting back helps with the immediate needs of cost reduction, it is very much part of the bigger picture of helping both people and planet.