In the UK, the ongoing recession is threatening 'brand monogamy', with nearly two-thirds of consumers saying they are less brand-loyal than before, and more than 40% feeling that companies aren't being fair to their customer, according to the latest Insight Report from Experian.
The report suggests that the recession has caused a huge section of the population to radically rethink how, when and with whom they spend their money, and explores the impact this is likely to have on brands over the next decade as 'bounce-back' consumers continue to demand more for less money after the recession.
Experian warns that the 'more for less' mindset does not simply translate into 'cheap' or 'unbranded'. In fact, the so-called bounce-back consumer will think twice about simply buying the cheapest item available, instead applying specific selection criteria and shopping around for the best value for money.
What Experian calls "maximising behaviours" (where consumers demand the best of everything across the entire price/service/quality/value spectrum) are already beginning to emerge, with 27% of the consumers surveyed saying they are more likely to have shopped around for the best deal over the past six months, and 25% now take more time over choosing products.
More than 80% of consumers claim to be increasingly aware of the price of goods and services, and Experian warns that this emphasis on value is not likely to change even as the economy improves.
However, a focus on value does not mean that companies should cut corners with their green credentials, as 70% of consumers said they are still concerned about what they can do personally to help the environment, compared to only 40% ten years ago.
Experian's analysis suggests that this recession signals "the end of brand monogamy". Even among historically brand-loyal consumer groups there is increasingly volatile and promiscuous behaviour, as more than half of consumers claim to have defected to different shops in the past year because of poor or indifferent service, and 63% claimed to be less loyal to companies now than they were before.
The observe decrease in loyalty may, however, be linked into an evaporation of trust. The research found that consumers are more suspicious of companies and big business than ever before, with 40% believing that companies are not fair to consumers.
According to Joe Staton, planning director for The Future Foundation (an Experian company), "In the post-recession UK we are going to see the rise of the promiscuous, bounce-back consumer - one whose loyalty has to be won and re-won every day. The biggest casualty will be brand monogamy as consumers demand higher levels of service than ever before, and drop those brands that don't fully appreciate - and indeed reward - their custom."
The report also highlighted three key elements that could help businesses win the fight for the bounce-back consumer:
- Loyalty
Brands cannot assume that if they cared for consumers during the recession - like supermarkets with their quality-at-interesting-price points - that this will carry them through after the recession. Loyalty will need to be rewarded and re-won every day with reward points schemes, personalised discounts and targeted on-to-one one communications.
- Price
The thrifty "make do and mend" mindset that has galvanised consumers across the spectrum will not disappear post-recession. Right across the spectrum consumers will emerge from the downturn more aware and knowledgeable about the price-value equation. This means that brands will need to be transparent about costs, highlight benefits and revisit all-inclusive and package deals to lock consumers in at a good price.
- Service
Exceptional customer service will be the making or breaking of brands post-recession. Bounce-back behaviours will be characterised by a willingness and ability to look elsewhere for better customer service experience for consumers dissatisfied on any level. Personal recommendations will be critical to out-performing the competition in the toughest markets.
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