Almost half of Irish consumers have seen a rise in the daily costs of living. This in turn has impacted their behaviour both in terms of an increased awareness around product usage and an increased propensity to switch providers. So how might this be affecting how consumers select brands in 2022?
Footing The Bill
"Groceries have increased dramatically and I don't buy as many treats. I try not use the tumble dryer as much, to batch cook and put on bigger washes." - customer verbatim
In a recent Global Reviews study of 200 Irish consumers, 48% stated that their daily cost of living in the last six months had ‘increased significantly’. No surprise given that the most significant increases in the year to May 2022, were seen in housing, water, electricity, gas and other fuels which was up 20.9%. Added to that, growing food prices on staples such as bread and pasta (national average price for bread was up €12.40 in the year to April 2022, while spaghetti per 500g, increased by €19.30 in the year), it’s no wonder consumers have started to keep a closer eye on their bills than normal.
"It has become my worrying financial concern next to my mortgage" - customer verbatim
"It has made more conscious of the electricity I use i.e. air drying clothes instead of tumble drying clothes, switching off lights and appliances. It's made me more interested in switching." - customer verbatim
Making Up Your Mind
"It has made me more open to changing providers" - customer verbatim
This in turn has seen an increase in the propensity to switch providers with 65% of consumers claiming to be more likely to switch to another provider than before due to the increased costs; more than double vs a year ago. For the energy market, price is still a key driver when choosing a supplier; providing the ‘best deals and offers’ consistently ranks number 1 in our energy Fruition and Digital Marketing Effectiveness (DME) studies In our motor insurance studies, price has also always ranked highly however, when it comes to choosing a motor insurance provider in Ireland, trust has grown by 11% since last year, to rank number one, in terms of reasons to finally prefer a provider.
Familiarity (doesn't always) Breed Contempt
Price is also the primary reason to stay with a provider, however unfamiliarity makes consumers hesitate when considering newer brands, with just 3% less stating at ‘unfamiliarity’ would be a reason not to consider a new brand over price. For both energy and motor for example (and in most of our industry studies), the top reason to choose a brand initially, before consumers have conducted any research, is being a current customer (61%for motor, 52% for energy).
So, does brand outweigh price when it comes to choosing a provider?
Answer; it depends (on a number of factors):
- Do they have a current relationship with you?
- How familiar are you too them?
- Are they seeing you in search results?
- How are you positing your offer?
In a recent Australian motor insurance study, prospective consumers were almost twice as likely to select one well-known brand (Budget Direct) over another (AAMI) based on their ranking. However, a more well-known brand (AAMI)was chosen over a less well-known brand (QBE) despite a slightly higher ranking and more prominent offer. Both Budget Direct and AAMI were the top two final preferred brands for motor insurance in Australia.
Despite a less prominently positioned offer, if a brand is familiar to the prospective consumer, has a good reputation and ranks higher in search results, it’s more likely to be chosen over other brands.
While all this means that brands still need to compete on price to some degree, other factors such as brand reputation, trust and demonstrating value, as well as SERP ranking and messaging, also play a key role in this current economic climate. Ensuring current customers understand that they are getting value, are with a trusted and reputable brand, and demonstrating this to prospective consumers, will satisfy both retention and acquisition.
If you want to know more about
- Message resonance with prospective consumers for attraction
- What features and functions communicate trust and value to optimise on-site conversion
- Behavioural changes in the current marketplace affecting your business
contact Global Reviews today and see how we can help you.
