Is ensuring your brand and business offering hold maximum appeal for budget conscious consumers a top of agenda item for 2025? If you answered in the affirmative, you’re far from alone.
It’s no secret millions of Australians have been doing it tough for more than a while now. Inflation, interest rate rises and wage growth that’s failed to keep pace have prompted individuals and households to pull in their belts and seek out savings wherever they are to be found.
Nationwide spending continues to decline in real terms, as a consequence of continuing cost of living pressures, recent reductions in the inflation rate notwithstanding, according to CommBank iQ’s November 2024 Cost of Living Insights Summary.
Under 40s have been particularly hard hit, as evidenced by negative overall spending growth: -2.3 per cent on essentials and -1.9 per cent on discretionary items for those in the 18-29 category and -1.1 per cent and -1.0 per cent for the 30-39s.
Why lower prices don’t engender loyalty
Tough times can represent both challenge and opportunity. On the one hand, consumers are in shopping-around mode; ultra focused on ensuring their scarce dollars are smartly spent. On the other, competition for those dollars has never been greater.
For businesses looking to shore up sales and growth, cutting prices to capture a greater market share can be an irresistible temptation. But if your end game is boosting customer lifetime value, it can also be your biggest blunder; one that may well prove irrecoverable.
That’s because discounting is a terrible strategy for keeping customers coming back for more. Sure, there’s the short-term sugar hit a lower price can provide but it doesn’t last. On the contrary. Putting prices down erodes customer trust and brand value, reduces loyalty and locks businesses into a destructive, margin eroding spiral.
Presenting a multi-pronged value proposition
That’s why ahead-of-the-curve organisations are doing things differently; adopting a holistic approach to the challenge and leaning into opportunities to provide consumers with value beyond that which is contained in their core product offerings.
For many, that means moving out of their traditional lanes and working with complementary vendors to create attractively priced bundling deals comprising two or more ‘brand adjacent’ products or services.
Taking this tack provides an excellent opportunity to engage more regularly and deeply with customers. That’s particularly the case if your core offering is a utility service, such as electricity or water, which occupies minimal customer headspace unless it’s switched off or is going up in price.
Bundling your low margin product with some high margin lines may provide greater flexibility on the pricing front too. Using the latter to subsidise the former can enable you to offer more value than standalone suppliers are able to muster, without your having to run a red pen through your list prices.
Tools to make the task easy
Delivering a compelling bundle of complementary products and services is significantly easier with the right tools, namely subscription management technology that enables businesses to launch, manage and scale brand adjacent offerings quickly and cost effectively.
Select a platform with a low or no-code design and flexible integration capabilities and you’ll have the capacity to bring new lines to market in a matter of mere weeks.
Ideally, you’ll opt for technology that lets you establish seamless data flow and automated workflows across all divisions of your business, view and manage customers’ information via a single hub, and deliver personalised interactions that drive engagement and results.
And if your platform incorporates sophisticated data analytics functionality, you’ll be able to use it to formulate accurate predictions that will keep on growing your sales and customer value for months and years to come.
Maintaining brand value and profitable growth
The upcoming year will be another tough one for local consumers and we can expect to see them continue their quest for value, in a bid to combat cost of living pressures and stretch their straitened household budgets further.
Finding ways to deliver that value, without decimating the value of their own brands and businesses in the process, is the challenge du jour for local enterprises. Bundling your offering with complementary products and services is an excellent alternative to destructive discounting and AI-driven subscription management software makes it easy to get started. If profitable growth is your end game in 2025, it’s an investment that will help you achieve it.
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Expanding your range of brand-adjacent products and services can be more effective than reducing prices to rock bottom. Expert, advertising marketing, Brand Dynamic Business
