Inflation affects absolutely everything. Nothing and no one is exempt.
One of the main ways that inflation affects marketing is through ad costs. Since 2021, advertising cost per click has continued to rise in price. Along with ad costs, inflation can also affect ad budgets. Since you’re probably putting a bigger chunk of your business’s budget towards other things to account for inflation, you might have less to put towards your ads.
Most importantly, inflation means decreased spending from consumers – and that can affect your revenue.
Periods of inflation aren’t easy to navigate. Marketing is more important than ever during times like these, but you have to know how to hit the right note with consumers in order to succeed.
Just like during normal economic times, not every marketing strategy will work for every company. It’s important to pick and choose what works for you, even during inflation periods. Let’s discuss a few different tactics and marketing messages you can use.
Customers aren’t likely to respond well to price increases – even if your business needs them in order to remedy what you’ve lost. It might make sense to you, but customers don’t place too much value on what’s going on behind the scenes. They care about what comes out of their pockets.
You might offer smaller package sizes (so that lower prices make sense for both parties) or offer a few valuable promotions. More on that later.
Understanding market trends is crucial during inflation periods. Your company needs a good handle on the way customers react to pricing inflation so you can adapt your strategies to their thoughts, choices, and behaviors.
You can discover this either by studying your own analytics or by talking to customers directly about their experiences with shopping as they consider inflation. A great way to reach your customers is by sending out a survey through your email and text databases. You can incentivize their responses by offering a prize simply for sharing their opinion.
Many people don’t have the money for big-ticket items during times of economic strife. By focusing on your high-quality products that have a good value for their price, customers will understand that you’re looking out for their well-being instead of trying to bleed them dry.
During an inflation period, concentrate less on how much you can sell and more on the people you’re selling to. The relationships you cultivate with them have value of their own, and those relationships will keep customers coming back during tough times and when times are good again.
Promotions can encourage people to shop with you, but only when they’re done right. As a business, you don’t want to run promotions that strip your profit, but the promotions have to be good enough to get people (who don’t have a lot of spare cash) in the door.
On that same note, offering promotions on a “few and far between” basis increases their value. Offering promotions constantly just tells people that they’re not really getting any sort of deal at all, and you’re just using the words “promotion” and “discount” as cheap gimmicks to snag their business.
Customers will appreciate you giving them the chance to buy only the products and services that they need instead of spending more on a bundle that includes items that aren’t necessary. Unbundling gives customers the chance to check the prices of what they’re purchasing and decide for themselves how much they purchase.
While customers are undoubtedly decreasing their spending, your product or service should stick out as something they can’t cut out of their budget. Strong brands provide comfort to consumers during times of upheaval, so your customer loyalty is more important now than ever – and that relationship will only become stronger if you position yourself as the product/service that they can’t live without.
Inflation periods can be a struggle. There’s no getting around that fact.
But there are plenty of ways that you can make life easier for your customer and for yourself.
To learn more about the way inflation should impact your marketing strategies, reach out to our team at Federated Media. Our marketing experts are focused on creating custom marketing strategies for our clients that drive ROI.