Do Customer Stay Brand Loyal During Challenging Economic Times?
When inflation occurs, consumers often start to look for cheaper alternatives to the brands they typically purchase. This dispels the myth that consumers stay brand loyal.
As the cost-of-living increases, consumers may be less willing or able to pay premium prices for specific products or services, prompting them to switch to lower-priced alternatives or seek out sales and discounts.
The specific effects will depend on various factors, including the product or service category, the strength of brand loyalty, and the availability of lower-priced alternatives.
Inflation can have a negative impact on brand loyalty in several ways.
For example, consumers may begin to prioritize purchasing essential items, such as food and housing, over discretionary purchases, like luxury goods. This may impact brand loyalty if consumers begin to view certain brands as unnecessary or frivolous.
Even luxury categories with affluent customers are experiencing declines during difficult economic times.
Leading companies use brand loyalty data points to segment and tailor their customer database marketing. This is critical for maintaining your best customers during challenging economic times.
By segmenting their customer database based on brand loyalty, companies are tailoring their marketing strategies and communication to each group of customers. For instance, customers who are highly loyal to a brand may be offered exclusive discounts or early access to new products, while less loyal customers may be targeted with campaigns aimed at increasing their loyalty.
With this approach, you can gain valuable insights into customer behavior and preferences and develop strategies to increase customer engagement and retention.
What is your experience in specifically deploying CRM against varying brand-loyal segments?
About The CMO Syndicate
The CMO Syndicate is a diverse group of world-class Chief Marketing Officers who rapidly solve growth and profit problems for CEOs, VCs, CMOs, and PE firms. As global CMOs from the world’s top companies, The CMO Syndicate is not a traditional marketing consulting agency, and we are not typical marketing or growth consultants. We are growth experts and operators who actually do the work on a part-time or project basis as outsourced fractional and interim CMOs.