How Brands Can Retain Customers During Tough Economic Times

In normal times, almost two-thirds of customers will consider switching brands after a single bad experience. In recessionary times, one can only imagine that number to be an underestimate. Official recession criteria notwithstanding, most consumers already think we’re in a recession—so what is a brand to do to minimize defections?

First, it is essential for brand owners to recognize that loyalty is based primarily on emotional drivers rather than functional ones, such as price or availability. This is key. If you have a strong brand that has relevance to customers beyond features and benefits (for example, by having a compelling brand purpose that customers align on), customer loyalty is unlikely to decline over price increases due to inflation or availability difficulties due to supply chain issues.

But even if your brand is not one of the strongest, there are still things you can do to maintain brand loyalty and limit brand defections during economic slowdowns. The biggest lever to maintain brand loyalty is to manage the brand experience of your customers, making sure your communications and interactions with the customer remain positive and consistent.

Honest and transparent communications are more important than ever, according to recent customer research. Trust is most important during times of uncertainty and change. Clear and consistent communications with your customers make them feel like they know and trust the brand. Brands can achieve this, for example, by personalizing the interactions with customers, by sharing more information on how brand ingredients are sourced, how customer data is kept secure, etc.

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Personalizing brand experiences is fertile ground for enhancing brand loyalty and can be done without too much additional cost. Consider developing or expanding your brand loyalty program, increasing the engagement level of your front-line employees and asking customers what would make the brand experience more meaningful and enjoyable. Even if the answer to the latter is “nothing”, the customer’s loyalty has likely increased by the brand just having asked.

One thing brands absolutely must bear in mind is that customers are much more likely to defect brands that fail to deal with problems quickly and efficiently. We’ve all been frustrated by placing a service call and having to give the same personal information more than once because the brand’s internal systems fail to communicate, or when the lines are overly busy and/or the chatbots can’t understand what we need. Today, those experiences are kryptonite to brand loyalty. Brands need to make sure those technology issues are solved first—and ensure that front-line employees are empowered to resolve customer issues quickly, if not on the spot.

This does require taking the long view. And, make no mistake, brand is, by definition, the long view. Like personal reputation, brand credibility takes time to build but can be lost in short order.  Short-term cost and profitability pressures are often antithetical to good brand building and brand owners need to understand and manage these competing pressures. Brand will frequently lose out in favor of cost savings during recessionary times, as customer service and brand marketing are obvious targets for expenditure reduction. In the long view, however, this is precisely the time to emphasize brand, as it takes so much more to win over new customers once the economy shifts back into growth.

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Frank Schab
An experienced marketing and branding strategist, Frank has been helping clients optimize the value of their brands through insightful analysis and effective strategy for more than three decades. Along with holding positions at General Motors and Pfizer, Frank served as a Managing Partner at Interbrand New York and VP of Global Brand Research at Opinion Research Corporation before co-founding Six Degrees. His brand-building work in various sectors including hospitality, medical device, pharmaceutical, automotive and technology has taken him to 17 countries on four continents. Frank holds a doctorate in psychology from Yale University and speaks fluent German.

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