Brands under pressure

In an era where every penny counts, memorable experiences with brands are ever more expected from the consumer side. With that, when things go wrong, reactions are often extreme and emotional. It is particularly prevalent in hospitality, a sector which is still also grappling with recruitment challenges. Consumers need nurturing more than ever, and brands are struggling to respond.

Katie Brinsmead-Stockham, Hospitality Brand Strategist and WePioneer Specialist, explains: “People are in this state where they really need a brand to deliver something for them. Whether that’s a romantic meal for an anniversary or the first family holiday you’re taking your baby away on, everybody has put a lot of emotional weight on what that will deliver for them as an individual, a couple or as a family.”

When brands fail to acknowledge or, worse yet, exacerbate these stresses, it can damage the very relationships that underpin their success. Whether people are struggling with financial burdens or emotional exhaustion, they are clearly looking for relief and understanding in the brands they choose to engage with. It is time to build bridges. Deeper, more human relationships are critical.

As consumers face anxious times, many brands are beleaguered by higher prices and are resorting to cost-cutting measures. While this may be a pragmatic business move, it increases uncertainty and breeds scepticism.

Choices taken on behalf of customers without consultation risk damaging the bonds between brands and people. As material costs have risen, this extends to reducing quality – or, in the case of the food sector, reducing portion sizes – in lieu of increasing prices. While that has some merit from a business perspective, it is a risky move that can appear deceitful and off-brand to the consumer.

In these cases, cost-cutting has to be considered in line with the ethos of the business and its position in consumers’ minds. It is key to keep in mind why your customer is your customer in the first place, and what brought them to your brand. When difficult decisions have to be made, maintaining that line of thinking and the relevant people in mind, and talking to them about the processes, keeps that connection strong. Missteps can chip away at trust. If not caught and addressed, that trust starts to erode and break.

Resorting to such tactics without having honest conversations with audiences, thinking about their needs and trying to understand their point of view, clearly adds to the tension. We must never forget that customers are savvy and think independently. They place emotional weight on their brand experiences, and those emotions matter.

Today, customers are increasingly shrewd. Competition is fierce. Brands have to work hard to earn loyalty and advocacy. But the UK Customer Service Institute’s annual report shows that customer satisfaction rates are dropping. From a score of 78.4 in July 2022, there has been a drop of 1.8 to 76.6 in July 2023 – the lowest it has been since 2015 ^[2].

This was further evidenced in the results of our 2023 Customer Experience Survey of 400 people. Poor customer service emerged as the primary contributor to negative brand experiences, a concern expressed by 61% of respondents. 62% stated that poor customer service would be the core reason for giving up on a brand.

The problem is that poor customer service has consequences beyond the individual transaction. 69% of respondents indicated they would advise friends or family against engaging with a brand that they had a negative experience with.

It is a situation exacerbated by the heightened sensitivities previously described. Caitlin Ramsdale, Managing Director at Kid & Coe, says the pandemic has greatly impacted stress levels and, as a result, how people interact with brands. She explains: “We have customers coming to us out of fear. They’re going into customer service conversations ready for a fight. People are squeezed with their spending; they’ve just lived through a pandemic, and they don’t know what’s around the corner. They’re operating at such an increased level of scrutiny, and cortisol levels are heightened.”

The speed of change in marketing trends and movements makes them hard to navigate. New channels, new technologies, new tactics; marketers can feel the need to tick every box without understanding how or when to take a stand. As Caitlin Ramsdale adds, “You’ll get recommendations for campaigns that will get a lot of eyeballs and move us up in the algorithms. And it would probably work in the short term. But what do you do if you know it’s not right for the brand? My answer is that in the short term it will work, but not in the long term.”

Staying attuned to developments is important, but a strategic filter is critical. Does the activity benefit the customer? And does it fit with our brand? Following a trend just to keep up with your peers is a pointless endeavour. Remaining true to your values is always the stronger stance. To achieve that, the people you want to build relationships with and those with whom you already have them are your filter. Knowing what matters to them keeps you grounded and true to what you want your brand to be.

This clear understanding of your brand’s beliefs and those of your audience plays a critical role, says Rémi Lefèvre, Director of Luxury and Lifestyle Development Marketing at IHG Hotels and Resorts. He notes: “Without this clarity, brands risk veering off course and engaging in ways that may not benefit their core customer relationships.” Brand strategy is the vehicle for steering businesses towards meaningful and mutually beneficial engagements with customers.

There are brand lessons to be drawn from the fundamentals of any good relationship: active listening and genuine empathy. These are powerful, foundational principles that help to foster robust and resilient brands. Understanding the sources of frustration and the areas where pressure is building allows for real connection with the consumer. From there, brands need to understand and lean into a dynamic two-way value exchange to successfully reconnect on a human level.