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Business Reporter: How to achieve brand growth amidst rising inflation
Advice from the experts at gfkconsult
Countries around the world are experiencing the highest rates of inflation for decades, with an average year-on-year rise of 9.6 per cent recorded in May 2022 across 38 countries – the sharpest price increase since 19981. What is more, the number of OECD countries now experiencing double digit inflation rose from 13 to 15 between June and July 2022 alone2.
Inflation is not going away any time soon.And it is probably the biggest talking point for business leaders and executives around the globe right now. However, despite the challenges created by the current economic climate, it is still possible for brands to achieve sustainable growth if they adopt the right brand strategy and positioning.
gfkconsult has six recommendations that could help your brand win the market and ride out the predicted forthcoming recession with success.
1. Review your advertising budget and spend smarter
Time and again, history has shown that brands that continue to advertise and innovate in times of crisis will emerge stronger than those that cut their marketing budgets. Of course, it is tempting to reduce your spending when the economic chips are down. But there is a very real risk that you will be left behind by your competitors and end up in a position where it is difficult to regain lost market share.
At GfK, our advice is not to stop spending, but to optimiseit. Madalina Carstea, Head of Global Solutions, Brand & Marketing Intelligence at GfK, explains: “Make sure you remain visible to consumers and drive ROI from your marketing activities by investing in the right media mix for your target audience.
“Tools such as GfK’s Marketing Mix Optimizer can help you optimise your marketing spend across the right combination of digital and offline channels, so you get maximum ROI from your activities. Improving productivity is also key at this time, to balance out top- and bottom-line growth.
“Also, do bear in mind that there is an opportunity here. Some of your competitors are reducing their advertising spend right now, helping your business cut through the noise – meaning you could win yourself a bigger share of voice and drive brand growth in the process.”
2. Strengthen your unique selling proposition (USP)
Differentiation sells. Even at the present time when consumers are counting the pennies, there will always be a portion of the market that is willing and able to pay a premium for the brands they want, not just those that they need. Indeed, the GfK Consumer Life Study 2022 found that 42 per cent of global consumers still feel it is important to pamper themselves on a regular basis3.
And while pricing must be approached with the utmost care, one strategy that is well worth considering is cultivating, communicating and, thus, strengthening your brand’s USP and using this as a lever to increase loyalty and brand advocacy.
Why? Because a GfK study in 2021 showed that a brand’s uniqueness is the most important driver when it comes to the ability to charge a premium4. Finding your point of differentiation will also help to foster that all-important feeling of brand attachment among your customer base – which happens to be the second most significant factor in driving premium4.
In order to grow, it is therefore essential to create and nurture a dedicated community of loyal customers who keep your business top of mind and act as brand advocates, helping you bring in new customersIn fact, in the current financial climate, customer loyalty is priceless.
3. Prioritise brand growth at all levels
Leading from the top down is essential for brand-building to succeed. Executives therefore need to take a keen interest in promoting and embedding the company’s brand at every level of the organisation as well as in the marketplace.
By becoming brand champions, business leaders essentially act as guardians of the company’s brand values and purpose, leading by example to make sure these are communicated effectively both internally and externally.
Jutta Langer, Vice President of Consulting at GfK, elaborates. “A consistent approach to brand growth, led by the board and cascaded throughout the organisation, must be made a top priority. Naturally, the current macro-economic challenges demand the close attention of executives and staff. But retaining focus on brand identity is critical to maintaining and growing market share, especially when your competitors may be cutting their advertising budgets and losing visibility as a result.”
4. Maintain brand consistency across key consumer touchpoints
As noted above, nurturing brand loyalty is a crucial ingredient when it comes to tackling the problems caused by inflation. But it is definitely harder to achieve in 2022, with 60 per cent of people saying they may stop buying their favourite brands because of the cost-of-living crisis and 85 per cent saying they are actively seeking out cheaper alternatives when shopping5. These figures are supported by our own research, which found that now, only 43 per cent of consumers buy from a trusted brand – down 5 per cent on 2020 figures3.
In this difficult environment, keeping your brand image and identity consistent across all consumer touchpoints and at every stage of the buying journey is essential to creating and maintaining brand attachment. Any inconsistency in brand positioning between product development, marketing communications and sales execution will be highly noticeable to consumers – especially those using digital channels – and will almost certainly have an adverse impact on sales and brand growth.
“Collaboration between business functions is one of your most important weapons in the battle for gaining attention and engagement in today’s fragmented consumer landscape,” says Langer. “To achieve this, you need access to accurate and current consumer data that represents a single source of truth – which is another way that GfK can help. This creates the necessary resilience to adapt to fast-changing market conditions, while helping companies prioritise their sales and marketing activities.
“We specialise in providing access to a market-leading collection of consumer insights gleaned from a variety of sources, including 174 million households in 17 countries. Our expert team continually work to align millions of consumer interviews with our unique, highly granular point-of-sale data that is collected weekly at store-level.”
5. Revisit your audience segmentation data
If your business is still using pre-pandemic consumer profiles, it’s time for a rethink. Shopper behaviours have transformed in many ways since the outbreak of Covid-19 and continue to evolve in the wake of spiraling energy, fuel and food costs. Creating revised buyer personas that reflect the demographic realities of 2022 is therefore a must if brands are to understand and meet the changing needs of their audience.
Unfortunately, segmentation is much more difficult than before the pandemic, with 59 per cent of UK marketers saying they are now finding it harder to predict consumer priorities6. Harnessing the power of AI-driven segmentation techniques, supported by machine learning and the analysis of the latest customer profiles and spending patterns, is an indispensable tool for creating campaigns that resonate, and that bring in both new and repeat business.
An essential part of segmentation is to identify the growth fields of key consumer clusters – driven by consumer mindset and behavioural contexts – that allow brand growth to be generated incrementally, in both the short and the longer term. That means really getting under the consumer’s skin to understand their behaviours, beliefs, desires and aspirations.
6. Combine the forces of AI and human expertise
Making use of the latest technologies will certainly give your business a competitive advantage. But the importance of the human touch cannot be underestimated, says Madalina Carstea. “Powerful analytical tools such as GfK’s Marketing Mix Optimizer are a great place to start. However, putting a layer of human expertise on top of this is hugely beneficial; you could think of it as adding the final piece to the jigsaw puzzle.
“Here at gfkconsult, we offer the best of both worlds. By combining GfK’s unrivalled human expertise, proprietary data insights and AI-backed technology, we provide strategic consultancy to facilitate sustainable growth and optimise ROI, despite the challenges posed by inflation and recession.
“We empower brands to unlock their full potential by targeting the right consumer segments and evaluating the impact of all aspects of their marketing activity on sales, while assessing the contribution and efficiency of each marketing channel.”
Create a winning strategy with gfkconsult today. For more information and to arrange a no-obligation consultation with a gfkconsult expert, please visit gfkconsult.
Originally published on Business Reporter