What can brands do to make sure customers stay loyal when they're feeling the pinch of inflation? We investigate...
Welcome to Attest Investigates! In this series we use the Attest platform to test your burning questions and explore literally any topic. As a scientist, I am obsessed with experimentation, empiricism and using data to make decisions, so if you have something that needs investigating, get in touch at email@example.com – Jeremy King, CEO and Founder, Attest
Inflation is putting household budgets under huge strain, and consumers are having to make some tough choices. We know from our UK and US inflation sentiment trackers that people are cutting back even on essential items like food and fuel… so, then, what can brands do to become indispensable at this time?
We decided to investigate this by asking 500 consumers in both the US and UK what brands they’ll be sticking with during the cost of living crisis – and then exploring their reasons why. By looking at the roots of their brand loyalty, we’ll uncover how other brands can also become indispensable to their consumers. Read our findings below or dig into the data for yourself.
Three key takeaways were:
Inflation is leading to wide scale behavioral change that’s putting brand loyalty on the line, with a lot of relationships and patterns in flux right now.
Most consumers have at least one brand they don’t want to switch from despite inflationary pressures.
The longer the relationship with a brand, the greater the commitment but true customer understanding can supercharge loyalty.
Brands are at high risk at a time of dramatic change
To put the scale of the problem into perspective, we first asked respondents if they were changing their shopping habits to save money because of inflation. In the UK, the chief behavioral change is switching to cheaper brands, which 62.4% of consumers say they are doing (versus 53.2% in the US).
In the US, we see people are most likely to be reducing the frequency of non-essential purchases, so buying less rather than buying cheaper (57.4% of Americans are doing this versus 55.6% of Brits).
We also see a significant amount of shoppers in both nations simply stopping buying certain things or cancelling services, which is bad news for any brand producing non-essential products. Just over half of Brits say they are doing this, versus 48.2% of Americans.
Our favorite brands
With so many people changing their purchasing habits to save money, we wanted to know, are any brands sacrosanct? How many consumers have such a level of brand loyalty that they wouldn’t consider buying a cheaper alternative? Which brands maintain loyalty, against all costs, inflation and new pressures?
The UK demonstrates more brand loyalty than the US, with 78.6% naming a brand they’re wedded to (versus 69.4% in the US). However, we still see a notable percentage of people in each nation who show no commitment to any brand.
Now let’s take a look at the brands consumers were most likely to name… In the UK, the top five were Heinz, Nike, Tesco, Coca Cola/Coke and Netflix.
In the US, the top five brands were Nike, Amazon, Tide, Coca Cola/Coke and Adidas. It’s interesting to note that two brands – Nike and Coca Cola – make it onto both nation’s must-have lists. The strength of feeling for Nike, in particular, is impressive, with the footwear brand coming out yards ahead of the others. We’ve explored previously what makes Nike’s marketing so effective at building brand loyalty.
Loyalty is built over time
It won’t come as any comfort to young brands that the core reason for consumers to stick with a brand through difficult economic times is the length of their relationship with it. Nearly half of Americans and 43% of Brits said their favorite brand was indispensable to them because they’d been buying it for a long time.
So if loyalty is built over time, what can you do to fast-track it? This comes down to the strength of your product and the value it offers. Half of Americans say a brand that offers excellent value is indispensable, while 33.8% of Brits say the same. This isn’t just about being the cheapest; it’s heavily tied to quality, as highlighted by the next most important factor: superiority. Just over 39.0% of Americans and 36.6% of Brits say their favourite brands are superior to competitors.
Having to be better than the rest is a tall order – famously, there are no simple shortcuts to generating brand loyalty. But there are two other reasons that people remain loyal to brands, which provide additional goals to aim for. A significant 39.0% of Americans, and just over a quarter of Brits, say they’ll stick with brands that improve the quality of their lives. Meanwhile, 21.4% of US consumers, and 12.8% of UK shoppers, say a brand that forms part of their identity is one that’s indispensable to them.
By gaining a deep understanding of what makes your consumers tick, and what their most important needs are (hello, consumer research!), you’ll be able to hone your unique value proposition, brand image and messaging. Ultimately, this will help your brand to become an integral part of their lives more quickly.
There’s more data for you to delve into in the full US survey and UK survey, and if you want to find out how to become indispensable to your customers then get started with a free survey below..
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Jeremy founded Attest in mid-2015, following 9 years leading global teams across industries at McKinsey & Company. He holds an MBA from Harvard Business School, originally trained as a scientist with a focus on genetics, ecology and animal behaviour, and also helps to improve state primary schools with his charity work.