As the 2020 COVID-19 pandemic has caused businesses and the economy to shut down, consumers have also tightened their budgets.
according to Data from McKinsey, Most consumers buy more seriously than before the pandemic. Therefore, most households budget mainly around basic products and services.
But now, as the economy begins to reopen quickly after mass vaccination, business owners and marketers may also want to know what this means for next year’s revenue.
Specifically, many business leaders are asking, “Will consumers continue to spend cautiously in 2021, or will they spend more freely?”
To help companies prepare and navigate for the next few months, I randomly asked nearly 300 consumers, “Which one best describes your budget plan for next year?”
Here are what they said and tips on how to manage future consumer behavior.
How will consumers spend money next year
As the economy reopens, people return to work, and household incomes start to increase again, you might think that people will rush to online or physical stores to buy everything they don’t have a budget for in 2020.
However, when looking at the results of our small survey, people seem to be cautiously optimistic about the 2021 budget.
Although one-third of respondents said they plan to “relax” their budget and spend more money than in 2020, up to 43% plan to keep the same budget as in 2020. At the same time, nearly a quarter of respondents will tighten their budgets and spend less money next year.
If you sell non-essential products or services, or rely on your customers to get a larger budget, you shouldn’t panic now. Remember, this is only a small survey of random consumer groups. In addition, if we survey people in different industries, locations, or age groups, the results may be different.
What this survey does remind us, however, is that people still take the products and services they buy more seriously than ever before—and may stay that way in the coming months.
After all, to turn your audience into customers, the value of marketing your products is still more important than ever-even if you don’t sell what is considered “essential”.
Tips for marketing your products or services in an uncertain financial age
1. Prioritize your value proposition.
When someone has a tight budget, every dollar they spend must be worth the money. This means that the product or service they buy must help them do something important, solve a common pain point, save them time or money, or meet other major needs.
As a marketer or business owner, it’s important to understand the ins and outs of the buyer’s role, their needs, and the motivations that motivate them to make a purchase. Then, you must use your information to explain why your product is worth their money.
2. Differentiate yourself from your competitors.
As a budget-conscious person, I-like many others-conduct detailed research before purchasing a product or service. When I decide I need to buy something, I look at all the brands that sell it, their reviews, and the cost of the product. Although I might buy the cheapest product, if the quality of the product is better than the more affordable product, I might also consider buying a higher-end product.
For example, I recently helped my parents choose their first smart TV. Although almost all smart TVs today have similar applications and functions, we chose Roku TV because Roku’s marketing emphasizes simple, easy-to-understand user interface and settings. Although it is also very affordable, the user experience itself is the reason to buy it rather than other competitors.
As a marketer, it’s important to remember that people take many different factors into consideration when making a buying decision—especially when the investment is large. Moreover, sometimes, the price of a product is not the only determinant. This is why it is important to market elements that are different or better from competitors.
3. Leverage customer-generated content.
If you are working hard to make your product or service unique, but know that you have loyal customers who like your brand, please use them in your marketing.
Research shows that potential customers trust Customer reviews, videos, how-to guides, and other user-generated content Similar to the way they trust word-of-mouth recommendations. Ultimately, when potential customers see that people like them benefit from your branded products, they believe that the quality and value of the products you sell are high, and may be better than buying from competitors with poor or few reviews Cheaper alternatives are more motivated to buy your product.
Need some examples of how to collect and market good UGC, recommendations or reviews? Take a look at this guide.
4. Consider discounts or sales.
If your brand is able to offer small discounts or sales, this may be a good way to attract people on a tight budget to join your brand. Even if your discount or sale is temporary, potential customers may buy the product being sold, like its quality, and return to the brand later because they have gained trust and loyalty to the brand.
If you cannot provide sales or discount services, you can also consider Customer loyalty or reward program This allows frequent shoppers to end up with free or heavily discounted products. In this way, they may feel that every penny they spend can be used for future rewards.
5. Highlight the mission or purpose of your brand.
In 2020, The same McKinsey survey As mentioned at the beginning of this article, it is also found that people are also starting to buy brands with similar values to them. With this in mind, it is becoming more and more common for brands to invest in purpose-oriented marketing or activities that highlight the mission, purpose, or values that the company values.
For example, Kréyol, a fashion brand run by black women, embraces Haitian culture and global women’s empowerment through its clothing and product lines. The company’s “For women, by women” mission aims to improve the lives of women, craftsmen and entrepreneurs around the world by displaying their clothing and designs on the Kréyol website.
CEO Joelle Wendy Fontaine said: “The whole idea behind Kréyol is to allow me to provide a platform for craftsmen, especially women of color, to highlight the outstanding work they do.” In an interview.
Although Kréyol’s marketing and business strategies spread awareness of beautiful artisan fashion, potential customers may also be more willing to support the brand due to its trustworthy and authentic mission to improve the lives of women around the world.
Navigate changing purchasing behavior
As the world continues to reopen and develop after the pandemic, consumption habits will also change. Although some people will start to increase spending, others will remain cautious next year or beyond.
As a marketer or business owner, you need to listen to your audience and continue to track data about your target persona to understand how their way of making money has changed and what efforts you need to make to continue to win their support.
To learn more about the latest marketing trends and consumer behavior, check out our recently released State of Marketing report.