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- Economic challenges have made it more difficult than ever for businesses to attract and retain customers.
- Practicing 'brand empathy' can help large enterprises stand out and drive customer loyalty.
- Several businesses across verticals are already bringing empathy into their brand strategies.
Widespread economic, political, and environmental uncertainty is forcing global consumers to reevaluate their priorities. A full 96% of customers plan to adopt some type of cost-saving behavior in the next six months.1
Businesses need to read the room. Those that are conscious of consumer sentiment are more likely to win — and keep — customers. According to Think Forward with PayPal, a recent report developed in partnership with TrendWatching, a leading consumer trends firm, 78% of global consumers said they will be more loyal to businesses that help them through difficult times, such as the rise of inflation, the aftermath of the COVID-19 pandemic, and current geopolitical crises.2
This is exactly what the concept of 'brand empathy' is all about: helping and supporting consumers in meaningful ways, especially during challenging times. Prioritizing empathy — whether by helping consumers save money or supporting their entrepreneurial endeavors — enables companies to stand out from their competitors and cultivate customer loyalty.
Addressing consumer concerns
Brand empathy takes many forms, but it starts with understanding the current economic landscape. Data from June 2023 shows that consumer sentiment is low by historical standards.3 And in a recent statement, Joanne Hsu, director of Surveys of Consumers at the University of Michigan, noted that "a majority of consumers still expect difficult times in the economy over the next year."
That expectation presents an opportunity for businesses to put themselves in shoppers' shoes. Currently, a substantial portion of companies may be out of touch with consumers when it comes to concerns such as the value of their products. For example, 34% of brands fail to justify their current pricing strategy.4
Better aligning prices with consumer expectations (or further justifying prices by emphasizing product benefits) demonstrates that the company behind the product or service empathizes with their concerns.
Of course, building the best possible products and services for customers requires businesses to equip employees with the right skills and experience. And with innovations like AI and automation rapidly evolving, that's a daunting task: The future of work will require vastly different skills and competencies than in years past, so employee upskilling and reskilling programs will be a win-win for C-level executives and their teams. These activities not only help make businesses more competitive, they also show workers that employers care about their professional growth.
Brand empathy in action
Today's large businesses can learn a lot from those that are already leading the charge on empathy. Here are three strategies businesses are using to help consumers navigate economic instability.
1. Variable pricing models
Consumers value products differently depending on their own personal circumstances. Businesses can adapt their approach to pricing to respect the diversity of their customer base.
Variable pricing models, for example, can allow consumers in economically disadvantaged areas to pay less than those in more affluent ones.
Innovative food company Everytable is one business using a variable pricing model to make healthy food more accessible. The company prices its food products according to the average neighborhood income, with consumers in food deserts and underserved communities paying less than those in more affluent areas. The company ensures accuracy by cross-referencing delivery address zip codes with the average income of residents in that neighborhood.
2. Cost-comparison tools
With so many consumers planning to reduce spending in the months ahead, there's an opportunity for businesses to empower their customers with tools that can help them economize.
Cost-comparison tools and widgets, for example, can help shoppers substitute higher-end products for more affordable options.
Multinational retailer Carrefour offers this type of functionality to customers. The company — which operates a chain of hypermarkets, grocery, and convenience stores — added an anti-inflation button to its e-commerce site, enabling shoppers to easily find between two to six cheaper alternatives across its 8,000 available products. According to Carrefour, consumers replace the original item with a substitute offered by the algorithm in 21% of cases.5
3. Entrepreneurship support
Many consumers are adapting to economic difficulties by spending time on side hustles. These projects offer an additional income stream, especially at a time when so many industries are experiencing economic hardships that have forced them to have layoffs. Brands can support the entrepreneurial endeavors of their customers through mentorship, skills development, and other opportunities — and keep them engaged and coming back as a result.
On-demand delivery service foodpanda Malaysia is one company that's effectively supporting customer side hustles. The company created its HomeChef initiative to help aspiring chefs earn an income from cooking.
Via a partnership with Agrobank, home-based chefs who sign up with foodpanda can apply for micro-financing to grow their business. At last count, there were more than 5,000 home chefs on the platform in Malaysia alone.6
Better together
In both thriving economic times and more challenging ones, it's important for companies to stay connected to their customers. Businesses that aren't investing in helping customers through current difficult times will find it harder to keep them coming back.
By developing and implementing empathetic business strategies, enterprises can enhance their value and build long-term customer loyalty.
Advertisement Feature: This article is sponsored by PayPal, and its content has been created in collaboration with Insider Studios.
2 "The Role of Brands: Empathy in Uncertain Times." PayPal and TrendWatching, June 2023.
3 Consumer Sentiment Index. University of Michigan, preliminary results for June 2023.
4"Brand: your first defense against rising prices." Kantar, July 2022.
6 Foodpanda & Agrobank, Nov 2022.
(The content of this article is provided for informational purposes only. It has been prepared without taking into account your objectives, financial situation or needs. Please obtain your own independent tax, financial, and legal advice before making any business decisions.)