How to offer people value in an economic downturn
October 5, 2022
One thing that appears certain from the events of the last few days is that concerns over the economic environment and cost of living aren’t going anywhere any time soon.
It’s unsurprising, therefore, that a topic that’s coming up time and again in our work for clients at the moment is that of value: how it’s defined, how it’s felt and experienced…and what that means for how brands, products and services can deliver it at a time when their own finances are also likely to be being squeezed.
Value is fascinating because it is a deeply human concept – it doesn’t really exist in any concrete form, but rather is something that is felt as a consequence of different inter-related factors. We often associate it with price and the very rational part of our brain and, make no mistake, both of those play a role – but to make it solely about price is to ignore other crucial, more emotional drivers.
While the role of value – and how to think about and play about with the value equation – differs significantly from category to category, we’ve identified some overarching considerations that might help you start your journey towards offering better value to your customers:
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Understand how your brand/product delivers joy…and ramp it up
A key part of the value equation is the payoff – “how much of a positive impact does buying your product or service have on my life, and what would I lose if I had to compromise on that for a cheaper option?” By truly understanding what your brand does for people vs. the competition, you can communicate around or evolve your product in a way that increases your value significantly without having to even touch price.
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Ensure your grass is the greenest – or as close as possible!
Value is often comparative…people don’t necessarily need to know they’ve found the cheapest version of something, but there is real power in knowing they couldn’t have gotten the same product (payoff) for a cheaper price elsewhere. Tesco’s ‘Aldi price match’ is a perfect example of a brand removing the fear of the grass being greener elsewhere: By reassuring customers that they’re getting the same product at a price most retailers will struggle to beat, they stop their customers sidling off to do some of their shopping with bargain retailers.
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Look for the win-wins
Who doesn’t love a bargain? A big part of the emotional payoff of value comes from getting a sense you’ve beaten the system…the payoff-to-payout ratio is in your favour! Discounts and offers play a huge role here but consider other ways you can increase the payoff your product or service is delivering, without sacrificing your margin. Cumulative benefits such as loyalty schemes…bundles that introduce your customers to other products in your portfolio…these all heighten the sense of value whilst offering pathways to growth for your brand.
If you’d like to understand more about the value equation and how your brand can continue to deliver maximum value for your customers, don’t hesitate to get in touch!
