Utilizing Deep Customer Analytics Against a Recession (Article by Seanna Mattson)
With inflation on the rise, the US is facing the possibility of another recession that could have a massive impact on the economy. Bloomberg claims a recession could cause a 15% drop in corporate profits and a 3.8% increase in unemployment, with each recession typically lasting 10 months. Consumers’ income is also likely to be affected by the recession as well, and this usually leads to consumers pulling back on purchases or looking for cheaper alternatives to save money. Unfortunately for small businesses, the aforementioned timeframe often makes or breaks companies.
To mitigate a potential recession’s impact, understanding and targeting the right market is essential in keeping customers. A feature on big data by Maryville University outlines how businesses can utilize customer data to drive business. They illustrate how, when a customer signs up for a loyalty program at a grocery store, the store can digitally record the products they buy with each swipe of the loyalty card. The store can also track customer clicks through loyalty program emails.
This information on consumer trends helps the business prepare targeted campaigns that push customers towards additional purchases, driving up their profits — all of which would not be possible without data and analytics. So in this article, we’ll explore the two ways customer analytics can work against a recession.
Increase customer appeal
Having data is important in tracking consumers’ preferences and dislikes. Our post on “An Intro to AI Marketing Tools” describes how AI marketing tools can help quickly present relevant, statistical data in an informative way. These programs can give you insights into what could be changed in your products to increase customer appeal, which is essential to tap into when people are reluctant to spend money.
In one case, Business Insider discusses Burger King’s logo redesign in an effort to make their products look more aesthetically pleasing and increase consumer interest. The new changes fit the trends they found through customer analytics; many of their sales dropped when they introduced the 1999 logo design, as the blue swoosh was considered too gimmick-y. Burger King went back to their more popular, retro-looking logo that tapped into consumer nostalgia from previous years. Learning about your customer base and what they expect from your brand can help you market to them in a much more effective manner.
Increase customer trust
As mentioned earlier, maximizing your analytics can give you insights into customer history with your brand and help you tailor advertisements accordingly. For a truly sustainable business, your marketing strategies need to empathize with your customers, by building their trust in your company, so customers can see your brand as reliable. In the case of Dell, customer analytics has taught them more about their target market and how they can customize their ads per target group. Their ads reinforce an emotional connection with the consumer and reassure them that Dell is still relevant, even in a recession.
Here are some of the taglines they used depending on each type of customer:
- “Out of the box, within your means” – for consumers who would usually put off purchasing electronics
- “Depend on Dell for simple solutions in tough times” – for customers who are looking for affordable options
- “The ideal laptop works anywhere, in any economy” – for more well-off customers, to cater to their needs
- “Weak economy, powerful you” – for those who are still willing to spend on their favorite brands
However, do note that customer retention doesn’t just rely on marketing; it is dependent on good business practices. So it’s important to reward consumers who have been supporting your brand, even before these turbulent times. Loyalty programs and rewards are some of the ways to cater to both big and small customers, helping to increase their trust and loyalty in your brand.
The analytics industry remains essential in leveraging businesses in customer-associated shortages. The technology can optimize business marketing, fund allocation, and even help discover new revenue streams. In recessions, having actionable data is absolutely crucial to allow businesses to respond quickly to change.
