How to Find Customer During the Inflation and Stagflation Crisis
Why is stagflation mentioned and what exactly is it?
This is a period of economic growth stagnation with rising inflation. High unemployment rates, rising prices and declines in gross domestic product (GDP) are characteristic of this period. For the average consumer, stagflation means a decrease in income, making it difficult to meet his basic needs. This phenomenon is caused by monetary or fiscal policy failures and supply shocks. The legacy of current inflation rates is much more complex than the inflationary shocks of past decades. Offsetting the impact of the pandemic through higher government spending has theoretically left consumers with savings. The current crisis, on the other hand, is the result of the last two years, during which supply has struggled to keep up with demand due to problems with supply chains. How to deal with customer experience in times of inflation? Datantify’s best strategies for finding customers during inflation:
Before we look at individual ways of acquiring customers, you also need to take into account the organizational aspects inside your company.
1. Expense management
Managing expenses in a broad perspective with high accuracy is the basis for maintaining order in this area when difficult market times come. Such a financial picture will show us, among other things, what % of customers could appear in our database to increase the income of our business. How many customers do you need to get to increase our resources. At the same time, in a period of inflation, it is critical to ensure that decisions are made with an awareness of the profit and loss account.
2. Differentiate between strategic and nonstrategic spending
Distinguish between strategic and non-strategic protection of the distinctive experiences of your customers and employees. A sustainable cost management system should drive the company’s strategy and enable large-scale investments. This will allow you to assess where to increase investments that will allow for a good reputation of the company, expanding cooperation, and at the same time retaining employees thanks to which a significant percentage of customers is also acquired. This will allow you to maintain a competitive advantage and position the company as attractive.
3. Implement solutions facilitating customer service
Analyzing rates and consumption enables the company to create detailed, trackable cost initiatives. This gives you the opportunity to decide to implement solutions that facilitate the functioning of the company in difficult times, and also to use its functions to attract customers. Evaluate for yourself the combination of creating or buying for the core functions of your software company, and the implementation of sourcing tools based on artificial intelligence. This will allow you to automate certain processes, including customer acquisition.
Serving a large number of customers at a high level requires a lot of work. It may be that in a difficult market time, many companies reduce the number of employees. And we focus on gaining more of these customers. If your business can be online, you have a lot of tools to choose from that will automate this work. This will allow you to maintain high quality of service for existing customers as well as those you will gain in the future. Process automation includes, among others, handling order statuses, sales, invoicing, deliveries and more, depending on the nature of your business.
5. Analyze your customer base
Customer behavior and expectations tend to change when crisis times come. The pandemic has also convinced us of this. Hence, it is a good practice to check by analyzing whether you still understand the needs of customers from your database. Start by analyzing shopping habits, wealth and their priorities. Recently, there has also been an increase in shopping at discount stores, the use of credit cards and the wholesale purchase of products. To help you analyze your customer base, you’ll need helpful questions:
– Should we change our marketing strategy to attract price-sensitive consumers?
– How to make our brand more socially relevant? Should we get more involved in charity or organize competitions?
– Is our customer strategy still valid?
– What promotions can we run to attract more customers and keep existing ones?
The datantify database will certainly help you to expand the base of your clients and partners.
6. Apply price tiers
A good way to keep or increase the number of customers is to add a wider range of prices. This will prevent the loss of regular customers who may be struggling with a shrinking budget or lack of savings caused by the pandemic or inflation that has been going on for over a year in many countries.
Large retailers sell a variety of products, which involves ensuring which of these products are most desired by customers. Make sure which category of your products to focus on. Then be sure to add a few other products with more different prices. In the case of companies dealing with the provision of various services, there is also room for diversification of their offer. For example, adding packages for couples or different people.
7. You can’t focus on every category and product
Images of empty shelves and long queues for deliveries put retailers in an unfavorable light for shoppers. Customer Data Science identifies categories and products that are most important to customers in terms of growth and loyalty. With such a knowledge base, you can find out which category or product is worth focusing on, otherwise you are not able to focus on each category. This is inefficient and time-consuming. Find out which items you can safely remove or add without losing profits or sales.
8. Shipping or service costs
Now over 60% of customers decide to make larger purchases to qualify for free shipping, which online stores offer only after exceeding a certain value of purchases. Your business can benefit from setting this purchase threshold to qualify for free shipping. Think carefully about how to choose this minimum purchase value so that it is comfortable and at the same time encourages customers to spend a little more. Use this way to show yourself a more attractive choice than the competition. The price threshold cannot be too high or too low.
9. Loyalty programs for regular and new customers
Attracting new customers requires providing them with various facilities – loyalty programs. It is an effective method of both retaining existing customers and encouraging new ones to use your services or products. The introduction of newsletter discounts, loyalty programs, collecting points, free deliveries or dedicated discounts for the consumer is a comfort and promotes long-term purchasing behavior of customers.
10. ‘Loyalty shock’ and new customers
Tight household budgets sometimes subconsciously force consumers to experiment with other brands and product offerings than before. This is often called the “loyalty shock,” which is the tendency of consumers to try alternative brands and products that will meet their needs. Many sellers became aware of this phenomenon at the beginning of the covid-19 pandemic. Supply chain issues limited the availability of certain brands, leaving many shoppers unable to use them. Such changing consumer behavior broadens the opportunities for brands that want to dynamically adapt to market changes forced by economic crises.
No one could predict what the real impact of the pandemic on inflation and customers will be in the future. Most of the world’s economies were not prepared to cope with such circumstances. Until now, we have to deal with the consequences of the covid-19 pandemic. With inflation likely to continue for some time to come, your brand needs to implement long-term strategies to deal with consumers’ cautious buying habits. Current market circumstances affect the well-being of your customers, so use the methods we have collected to retain customers and attract new ones by applying them. To support your clients during periods of high inflation, remember that your clients are people first and therefore a humanistic approach is essential to get through these volatile times.