In a Price-sensitive Market, Focus on Value
Centring your value proposition around low prices can be risky. Your brand is only winning till the customer finds a better price elsewhere. Instead, focus on adding value to what the customer is spending on.
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During an economic downturn, consumers may be more cautious with their spending. There is a tendency for marketers to lean their focus towards promotions and discounts to encourage customers to make purchases. But treating your customers like bargain hunters can be counterintuitive.
Moreover, price wars can get messy. To offer the lowest price in the market, businesses must be prepared to cut operational costs lower than their competitors. Without it, they would simply be hurting their bottom line. On the other hand, if businesses are able to cut costs – be sure to include that in the messaging – letting customers know that the savings are trickling down to them as well.
In for the long haul
Instead, focus the conversation on actively adding value for their money. Bundling products and services together can help customers see added value without directly looking at a discounted price which can be perceived as a cheap trick. The idea is to avoid snap marketing moves in a downturn that may hurt brand image in the long term.
“If your brand is operating in discretionary spending space, it is important to ensure that your product/service is providing higher value per dollar spent,” says Sooraj Divakaran, marketer and founder of Digital Uncovered.
Your brand must earn customers’ trust and confidence. “Considering India is a market with a trust deficit, it is crucial that you get the basics right: delivering on your brand’s promise, providing exceptional customer service, and proactively introducing new upgrades/add-ons. If you execute the fundamentals correctly, consumers will continue to want to work with you regardless of how their preferences shift due to inflation. For instance, if you’re a SaaS brand, your ultimate goal is to ensure that you help your user get better at what they do or help them look better in front of their boss.”
Look to offer a better fit
Personalised recommendations powered by data can suggest products that fit the customer’s usage requirements. For example, helping a customer find the right fit in their data plan will help them save on unnecessary features that can raise the price.
But to do this – businesses need to have their data house in order. First on the list of challenges is ensuring you have the most up-to-date, complete, and accurate data on your customers and prospects. “To solve the problem, you’ll need to create a process or workflow and keep it up-to-date. You’ll also need to create a data governance framework that fits your specific needs. The last step in addressing the issue is to build a tech stack that works with the workflow and data governance model you’ve already created,” said Divakaran.
From promo-pusher to partner
Build a relationship which makes the customer see your brand as a partner. This means seeing the customer as more than just a transaction – a human being with dreams and values.
Educate customers on the long-term benefits of your products or services. For example, a company selling energy-efficient appliances can highlight the long-term savings customers will experience on their energy bills.
Marketers may need to work cross-functionally with other teams to see how the customer journey and product can evolve to offer more benefits. For example, flexible financing options can help customers by influencing their willingness to buy. Brands that offer financing options like payment plans, low-interest financing, etc., show that they are thinking beyond the sale.
It’s not a one-time fix. Understanding customers’ needs on a deeper level helps businesses plan, predict and deliver through changing market conditions.
According to Divakaran, the main differentiating factor of customer-obsessed brands is how they look at feedback. “The most customer-obsessed companies have built robust feedback loops. Whether you’re running an integrated marketing campaign or launching a new product release – you’ll need to build a mechanism that captures market or customer feedback and allows you to iterate in real time. You’ll also naturally see such companies more prone to experiments and constantly seeking new avenues to build their market presence.”
When marketing budgets shrink
Closer to home, marketing teams themselves feel the burn as stakeholders demand that teams do more with less.
When budgets shrink, marketers are questioned on the relevance and need for some of the solutions in the martech stack. How can marketing leaders decide what stays and what goes?
“It’s vital that you track the utilisation and efficacy of some of the solutions in your stack, to begin with. Any martech solution essential to your go-to-market strategy must be retained.”
Here, the relationship between the enterprise and the solution provider plays a crucial role.
Investments in martech solutions can save hours, and optimise marketing spends. But implementation needs to be aligned with the business goals to cut waste. Divakaran suggests finding a solution provider that is as agile as your business to ensure that in leveraging martech solutions – businesses not only experience value faster, but also in tangible, measurable metrics.
