Weathering Inflation: Tips for Marketers

It seems the only thing rising faster than summer temperatures is the consumer price index. This presents a new season of challenges for marketers.

How Did We Get Here?

We all lived through it. The pandemic created seismic shifts in consumer patterns, monetary policy, workforce preferences and digital dependency. The world emerged from hibernation with stimulus checks in hand and a voracious appetite to consume. Wages rose while demand skyrocketed, and the supply chain faltered. Inflation was inevitable. Instability in Ukraine and Russia simply added fuel to the wildfire. Now it seems we are caught in an endless cycle of inflation.

Forecast: Severe Weather

It has been interesting to observe how strongly consumers are holding on to convenience spending like shipping and meal delivery. Established habits are apparently hard to break — but all that is about to come to an end. Forbes recently reported consumer credit has been a popular way to absorb the impact of inflation, but credit card debt is approaching record highs.

As credit dries up, interest rates rise and stimulus money runs out, a fall in demand is just around the corner. Customers will respond by becoming more brand selective.

Impact on the Marketer

Like any seismic shift, winners and losers will emerge. For marketers to come out on top, here are a few steps to consider.

• Step 1: Look for Changes in Core Segment Preferences

  • Forget what you think you know about your customers. Do not assume historical patterns will continue. Protect your turf. Refresh your research and closely examine segment analytics for shifts. The digital world has created new levels of comparison shopping, so now is the time to know your audiences better than your competition.

• Step 2: Focus on Brand Value and Brand Position

  • In addition to considering changes in price, weigh the value of your product/service mix against your analytical findings. Especially evaluate your brand’s value proposition against the competition.

  • If you are in B2C, will consumers abandon your name brand for a discount brand? How can you repackage or bundle your offerings to present a distinctive value? Do you need to offer goods on consignment in certain markets to keep them on the shelves?

  • If you are in B2B, is your product or service vulnerable to competitive options due to rising prices or supply chain reliability? Conversely, are new B2B service opportunities, like outsourcing, emerging because your customer can’t fill open positions? These are the questions to consider.

• Step 3. Focus Messaging on Brand Value and the Brand Experience

  • If you are a discounter, you should of course trumpet your price advantage. But most brands will want to shift messaging away from dollars and engage customers with stories of value, purpose and brand experience. This may require a shift in your messaging, creative content and ad buys.

• Step 4. Aggressively Pursue Employee Retention

  • Inflation is affecting companies on the employee front as well. Yes, as human resources are critical to your own supply chain, recruiting and retention are a marketing issue. With a high level of competition for good people, wages and salaries are on the rise. Strategize with your HR department on how to obtain and retain your best employees through effective communication and advertising.

• Step 5. Sharpen your PR Skills

  • Brand loyalty is fragile in these economic conditions. One shift in the wind can bring on a storm. Whether it’s a defective product, a crisis on the plant floor, a labor dispute or a service failure, there is no room for error or ignorance. Your PR counsel needs to anticipate brand vulnerabilities before they occur, serving as an effective shelter in a storm.

• Step 6. Communicate with Everyone

  • The pandemic brought about a resurgence in the importance of communication with all stakeholders — not just customers, but also employees, vendors, regulators and investors. The volatile economic market breeding inflation requires the same.