Cost of Living Crisis: Defining who you are marketing to
There are 4 different types of customers you will be marketing to during times of hardship, such as this cost of living crisis.
Whilst times ahead will be tough for a lot of businesses, we firmly believe that, with the right marketing approach, your organisation can thrive despite ongoing supply and cost challenges.
The smart approach will be to utilise an integrated marketing strategy that is aligned to your consumer’s current buying and browsing habits, not simply banking on previous activities that worked in the past.
What your customers are looking for changes considerably during a cost of living crisis when purse strings are pulled a bit tighter and consumers are forced to potentially shop for cheaper alternatives.
The key to success will be to justify the value of your business and make your offering so enticing it will be impossible for your customers to look elsewhere.
A key factor in determining your marketing approach during this cost of living crisis will be the segments your customers fall into over the coming months.
Who are you marketing to?
On average, there are 4 different types of consumers you will be marketing to during times of hardship, such as this cost of living crisis, according to research from the Harvard Business Review.
For an effective marketing approach, you need to think about which segment, or segments, your consumers will fall into; as each one will have different behaviours and traits.
For example, if you are marketing a higher value product you may want to focus primarily on those that can afford to spend right now, rather than those who are saving as much as possible.
THE 4 TYPES OF B2B CONSUMERS IN A DURING A FINANCIAL CRISIS
SLAM ON THE BRAKES
These consumers are potentially the hardest to market to.
These are the ones who considerably lower their expenditures and really tighten those purse strings.
They will seek lower cost items even if it means switching suppliers. They are also likely to stop luxuries and any non-essential purchases to reduce expenses wherever possible.
These are often those hit hardest, and particularly are either B2C or B2B2C organisations that will be affected by their customer’s falling disposable income.
PAINED BUT PATIENT
These consumers, although not as strict with their spending as the ‘Slam on the Brakes’ consumers, will still try to reduce outgoings where possible.
They will keep to their favourite brands if they can find it cheaper, but they will seek cheaper alternatives if necessary.
They will reduce spending on luxuries, but they will take more time when they do have to spend and will be more selective. They will also delay any major purchases if they can and look to repair items rather than replace them.
COMFORTABLY WELL OFF
In this category, you are starting to see consumers who aren’t as affected but are still hit financially.
They still have some disposable income and will continue to buy high-value products, however, like the previous category, they will also be selective and take their time before deciding.
However, when it comes to non-essential items they may still buy these but will seek better quality for the price and will often negotiate more to get a better deal.
LIVE FOR TODAY
This is potentially one of the easiest consumers to market to.
Their spending and income remain largely unchanged and so still have plenty of disposable income.
They will continue using their favourite brands although they may postpone spending unless provided with a great deal, or immediate internal requirement.
When it comes to expendables, they may be reluctant due to the climate but if it is a justified purchase, they are likely to go for it.
HOW DO YOU MARKET TO EACH DIFFERENT SEGMENT?
Your target market may cross one or even multiple other segments.
Before you plan your marketing strategy you need to take an in-depth look at your audience and consider which segments you are potentially marketing to.
To do this, you can look at a number of factors such as:
- Previous spending habits – what were they previously purchasing?
- Industry – will theirs be hit harder than others?
- Their Customers – will their customers continue to spend with them?
- Avg. Annual Revenue – do they make enough money to continue their previous spending?
This will give you a good idea of how you should position your messaging and how to approach your targets.
SLAM ON THE BRAKES
If you are trying to market a higher value product or a service that can be deemed as expendable, it will be exceedingly difficult to market to this segment of consumers.
If you want to market to this segment, you will need to clearly communicate, why the buyer needs your product or service in their life. Make it an essential item.
Your previous brand marketing will be an important factor in determining the success of your marketing to Slam on the Brakes audiences, with customers more likely to trust businesses for who they have mental availability.
When communicating, use urgent, time-limited wording to make it more essential and make clear the benefits the consumer will receive.
These consumers will take a lot of persuading so be persistent and try to market on a variety of platforms to increase your reach as much as possible.
PAINED BUT PATIENT
This will be a similar marketing method to the previous consumer category. If you are aiming your campaign at this type of consumer make sure you give them valid reasons why they should buy this product.
They will often take longer to make a decision on a larger, higher-value purchase so make sure you are advertising on an array of platforms as well and keep your messaging clear and persistent.
Make sure your consumer knows why they need this product to help them justify the purchase to themselves.
COMFORTABLY WELL OFF
This is when you go into the “slightly easier to market to” field. Your wording can be less focused on why it is essential for the consumer to buy it, and more on why they should be buying from you.
As this consumer is still likely to look around to find the best price, be clear about your company values and the benefits of buying from your company compared to others.
With these types of consumers, you can make it less about justifying the purchase and more about the product itself.
You can make your marketing more emotive and personal and less direct and blunt. However, for larger services and products which could be classed as expendable, you will want to still give the consumers reasons why they should be buying this now.
These consumers still need to justify larger purchases, so make sure the value of the product or service is clear for them to see.
LIVE FOR TODAY
For these consumers, you may find you don’t need to change much about your current marketing strategy and wording.
If you offer a product or service which could be deemed as expendable, make it clear the benefits they will receive from your brand.
They still often buy higher value products but may need that little push to buy larger items or services so be clear in your messaging.
For all consumers remember, be clear, be consistent and know exactly who you are marketing to.
Knowing which segments your target market falls into will make it easier to know how to approach your marketing strategy in this financial climate.
How we can help
Generate UK is a full-service digital marketing agency that empowers industry-leading B2B & professional services companies to generate growth online.
We help brands grow at all stages of the funnel, with the expertise to support your organisation, whether you are looking to:
- Boost your awareness
- Improve demand
- Get more leads
- Generate more sales
Let’s have a chat to discuss how we can help you generate growth through marketing.