Covid-19 has reshaped the world as we know it, fundamentally impacting our lives in ways we could previously only imagine in a Hollywood blockbuster.
For many Australians. the financial impacts are only now being realised. It’s a time of extreme stress and behavioural change unlike any experienced for generations and as marketers you should know both how it will impact your customers’ behaviour and how you can help them.
We were already in bad shape
The Covid-19 pandemic has undoubtedly placed individuals and families under increased financial stress, we were already in pretty bad shape:
Forty per-cent of Australians were feeling financially anxious before Covid-19 and with over 1m Australians losing their jobs or working reduced hours since the lockdown began, we’re seeing a big increase in the level of financial anxiety. It’s important to know how financial stress impacts peoples’ behaviour and what you can do to genuinely help your customers through this.
The statistics above were reported whilst the economy had an unemployment rate around 5%. The situation is a lot worse now. Unemployment and underemployment have sharply increased and more than 600,000 Australians applied to access their Superannuation early due to financial stress.
How Covid-19 accentuated our anxiety
The financial stress being felt by Australians is heightened by a couple of factors.
We’re in a 24-hour Covid-19 news cycle. Most news channels and sites have a live Covid-19 stream as updates flood in from experts and politicians locally and around the world. Sensationalist headlines usually get more attention, so headlines often skew negatively. This sensationalist news extends beyond Covid-19 coverage, with predictions that we are headed for the worst global recession since the Great Depression. Experts are predicting that house prices could fall up to 30%, unemployment will double, and the economic impact could be felt for two years. For someone already feeling financially stressed, this can really heighten the feeling of despair.
We also know that people favour certainty in most aspects of life. It’s so hard to plan when we don’t know what the future holds. As the Covid-19 situation is forever changing and evolving, we’ve seen disruption in our sense of certainty and ability to plan for the future. Again, this can only heighten the anxiety someone that is financially stressed feels.
There have been good news stories during this pandemic, but you’ll be forgiven for not remembering them. We have a tendency to remember negative information. This is due to an evolutionary need to remember negative information to help us survive dangerous situations. For example, if we see on the news that there have been lots cases of COVID-19 in an area, we can more easily remember this and avoid that area to stay safe. People feeling anxious or financially stressed are going to remember negative news, which will heighten their belief that we are in very troubled times.
How this stress changes our behaviour
When people are financially stressed, there will very likely be two critical behaviour changes you should be aware of:
1) Unable to plan for the future:
Financial stress changes the horizon we’re looking towards. It’s very hard to put money aside each month, when you have mounting debt and don’t know when your circumstances will change. Customers under financial stress will be focused on surviving the day the day and any communication that doesn’t help them achieve that will most likely be ignored.
2) Seeking to regain control:
Financial stress makes us feel out of control. In order to regain a sense of control, many people spend on items that give us immediate gratification. These purchases give the person a momentary escape from the pressure. This could explain why 64% of early super withdraws were spent on alcohol, takeaway, clothing etc and only 14% was spent on repaying debt.
How you can ease your customers’ anxiety
As marketers we’re uniquely positioned to help our customers and reduce the current anxiety they may be feeling. We have existing channels and the capacity to be present in their lives, just when they need us. Here are some ways that you can help:
1) Tailor communications:
Financially stressed individuals have a different outlook to other customers and face different challenges. Communication to this cohort needs to be specialised. A segment could be created for financially stressed customers to ensure that all communication is empathetic of their situation and designed to help them work through their situation.
2) Help customers reduce uncertainty:
People suffering from financial stress are most likely feeling overwhelmed and don’t know where to turn. As experts in managing aspects of your clients’ financial lives, you have the power to provide financial tips and support about your areas of expertise that could solve a problem they may be facing. Focus on your area of expertise and try not to be too general. Greater Bank’s campaign ‘Together, not alone’ is designed to help customers with everything from nutritious recipes on a reduced budget, to looking after their mental health.
Anything you can do to help your customers develop a plan with achievable goals that relates to their wellbeing, will provide positive assurance that they’re on the right path and reinforce your role in their lives.
3) Be relevant:
There are lots of memes doing the rounds about companies that we don’t remember giving our contact details to are sending updates on what they are doing to help customers through Covid-19.
Remember, if your comms are not personalised and relevant to your customers’ circumstances, don’t add to the noise. Financially stressed customers will be more receptive to specific communication tailored to them and their needs.
4) Actions speak louder than words:
People’s trust in institutions is at an all-time low. It’s not enough to tell your customers’ that ‘we’re in this together’. You need to demonstrate how that translates into an action that benefits your customers. Coca-Cola paused a lot of its marketing spend and re-purposed the funds to support frontline service workers. Another great example is the One Drop Brewery in NSW that swapped brewing beer for making hand sanitizer to make sure there was enough supply in Australia.
5) Support new ways of thinking:
There has been a large uptake of people starting a side hustle, or starting courses during the pandemic to make up for shortfalls in income and to better prepare for the future. Companies that are genuinely able to support and inspire people with these endeavours will be rewarded. Wisr has provided tips to developing a side hustle and resources to find extra work on their ‘knowledge nest’ blog to help customers gain greater financial security.
Covid-19 changed day-to-day life as we knew it. We weren’t prepared for what was to come and are currently suffering financial stress as a result. By understanding what our customers are going through, we can help reduce the stress that is being felt and navigate these uncertain times. The brands that can truly help their customers during their time of need, will be rewarded for it with loyalty in the future.
