The economic slowdown caused by the pandemic has hit both businesses and consumers so hard that battling inflation plans have gone down the drain. Its effect is now apparent, for it is projected to rise to the highest rate this year.
Amid this whirlpool of uncertainty, 91% of the population is on their toes: spending capacity has been trimmed to save money, and shopping patterns have swapped from tested brands a year ago to cheaper alternatives.
As global economies experience shifts and cost of living crises impact individuals’ financial stability, organizations must navigate these challenges thoughtfully.
Sales and marketing teams must approach consumers carefully.
Brand trust is a fragile yet crucial asset.
So how can trust be used as a competitive advantage to not only survive an economic downturn, but thrive?
Understanding the impacts of the cost of living crisis
A cost of living crisis occurs when the prices of goods and services rise significantly, outpacing wage growth and leading to decreased purchasing power for consumers.
During these times, people become more cautious about their spending habits and the brands they choose to support.
Trust becomes paramount, as individuals seek assurances that the brands they engage with genuinely care about their well-being and are transparent in their operations.
So what’s data privacy got to do with brand trust?
We’re surrounded by digital interactions in everyday life. You can’t click on a website without privacy policies and cookie banners popping up. Every form interaction (should) come with consent tick boxes about what will happen to your data next.
Consumers are increasingly concerned about how their personal data is collected, stored, and used. Personal data is something brands simply can’t afford to gamble with anymore.
The mishandling of sensitive information can quickly erode brand trust. Leaving your customers no other choice but to look elsewhere.
Our recent survey found 77% of consumers believe most companies sell customer data without consent. So we’ve already got a long way to go in rebuilding that trust.
Here’s how data privacy contributes to building trust during a cost of living crisis:
Transparency and accountability
Transparent data privacy practices demonstrate to consumers that a brand respects their personal information and is committed to safeguarding it. Clearly communicating data collection processes, usage intentions, and security measures establishes an environment of trust. When individuals feel that their data is being treated responsibly, they are more likely to engage with a brand. Our survey results confound this, with 79% wanting to see individual companies be more responsible, and of those, 87% say this would make them more likely to opt-in to cookies. So, the gains of being open and transparent speak for themselves.
Empowerment through control
Consent and preference management empowers individuals to make informed decisions about how their data is used. Offering granular control over data permissions allows consumers to customize their interactions with a brand based on their comfort level. In times of financial uncertainty, when trust is of utmost importance, giving users control over their data fosters a sense of empowerment and respect.
Mitigating data breach risks
A data breach can have disastrous consequences for a brand’s reputation, especially during a cost of living crisis when consumers are already on edge. Prioritizing robust data security measures and regularly updating systems can significantly reduce the risk of breaches. Knowing that a brand is diligent in protecting their personal information can enhance consumer confidence in the midst of economic challenges.
How to adjust your digital strategy during a crisis
Personalization is a key feature for improving the overall customer experience. It assists in retaining and attracting new customers. Its importance multiplies in building digital brand trust as the days of the old mechanism of personalizing content and ads are numbered.
With third-party cookies, the major tool for marketers to track users across multiple websites, collect data, and deliver personalized advertisements, made obsolete, marketers have but a handful of choices to market effectively.
In this age of crisis, the significance of demonstrating a customer-centric strategy with a focus on safeguarding user privacy may emerge as the major driver of convincing customers to buy products or services.
To deliver this level of personalization and user control, businesses need to focus on collecting first-party data. Data that’s collected directly from website visitors or their customers based on interactions, preferences, and behaviors observed on their own platforms.
This data is considered trustworthy and speaks volumes in terms of accuracy and reliability. Insights garnered from interactions allow businesses to create more personalized and targeted marketing campaigns, leading to better customer engagement and loyalty.
Consent Management: A key component of trust
Consent management goes hand in hand with data privacy. It’s about respecting individual autonomy and ensuring that users are fully aware of how their data will be used before giving their approval.
During times of financial strain, consumers are more discerning about where they invest their resources. Clear, concise language that explains data usage intentions helps alleviate concerns and builds a sense of transparency. Brands that prioritize straightforward communication in their consent management processes stand out as trustworthy partners.
Consent management enables brands to create personalized experiences that cater to each user’s preferences. By respecting their choices and delivering content that aligns with their interests, brands can forge deeper connections. This tailored approach demonstrates that a brand values its audience as individuals and is invested in delivering value.
Building trust isn’t just about weathering the immediate storm of a cost of living crisis. It’s about establishing enduring relationships that will thrive beyond the challenges. Consent management helps create a foundation of trust that encourages customers to engage with a brand over the long term, resulting in brand loyalty even in uncertain times.
What does the future hold?
Only those brands will usher in the champions of tomorrow who don’t shy away from addressing the current cost-of-living crisis. Consumers prefer authentic and genuine communication around the cost of living, with expectations that products purchased will add value to their lives.
At a wrinkle in time like this, businesses need to be conscious of users’ problems and act in favor of them by introducing measures that incorporate less salesy approaches but rather customer satisfaction and value-adding.
Prioritizing data privacy and effective consent management demonstrates a commitment to ethical practices, transparency, and user empowerment.
These themes are not only relevant during challenging times but are also essential components of a successful, enduring brand strategy.
By fostering an environment where individuals feel safe and valued, brands can navigate crises while strengthening their relationships with customers.