Business planning and strategy discussions are no longer limited to familiar decisions about management, investments, and operations. Businesses have to navigate continuously evolving political and socio-economic challenges as a matter of success and survival. Perceptions of a business are heavily influenced not only by their core services, but also by the way they respond to these wider issues. With this backdrop, and the current cost of living crisis, the nexus between business performance, reputation and what key audiences care most about becomes more salient than ever.
The story so far
So, how do you know what socio-economic and political topics your audiences care about? Every week, we ask a nationally representative sample of ~2,000 people in the UK which news stories have stood out to them most that week. Since the start of the year, it’s become clear that your audiences are increasingly concerned with the cost of living crisis. Recall of coronavirus-related news began to decline as ‘Partygate’ grabbed the headlines, and then the Russian invasion of Ukraine dominated from February. The war is only the latest factor to contribute to the skyrocketing price of fuel, food, and other goods. The rising cost of living has simmered at the back of people’s minds in 2022, but as recall of the war in Ukraine has dipped – and with inflation hitting a 40-year high – the cost of living crisis has come to the fore.
The proportion of survey respondents in the UK that recalled the following stories as their ‘most noticed news story’ of the week from January to July 2022. [Source: Yonder top ten most noticed survey research]
Businesses in the spotlight
Why does this matter to your business? When we study this data alongside research regarding the most talked about brands during the same period, the links between a business’s response to socio-economic challenges and its reputation become clear.
The number of occasions each business appeared in the top ten most noticed businesses of the week from January to July 2022. [Source: Yonder business top ten most noticed survey research]
Businesses that are perceived as influencing the cost of living are now regularly appearing in the most noticed lists. The energy sector, now many months into a crisis of its own, is strongly associated with price increases, especially following adjustments to the energy price cap and global fuel shortages. Unsurprisingly, the energy sector, and specifically companies like Shell, BP, and British Gas, have appeared most frequently in the weekly top ten over the last six months. Interestingly, following their public announcements regarding price increases, companies like BT, Royal Mail and Nestlé have also appeared in the list.
The communications that these businesses are releasing are extremely important to their reputation. Comments from survey respondents begin to unveil the impact their cost of living narratives are having on brand reputations. Here’s what our respondents noticed:
“Shell’s big increase in profits despite forthcoming energy price increases for consumers.”
“BP is making a big profit and still putting prices up.”
“BT announcing a price rise of nearly 10% from April.”
“British Gas [has made] record profits and now record price rises.”
“Royal Mail has announced more price increases.”
“Nestlé’s price rise of its KitKat chocolate bar.”
[Source: Comments from survey respondents February – April 2022.]
With heightened public sensitivity towards the cost of living and prices, businesses must be ready to communicate effectively and sensitively regarding any increases. Indeed, the reputational challenge for many businesses so far this year has been how – within a context of rising prices – to protect perceptions and keep their customers.
It’s obvious that the rest of 2022 (and likely 2023, perhaps even beyond) will see a much greater focus on the cost of living, and this will have implications across the corporate landscape. It is about more than simply avoiding harmful headlines around salary increases for senior executives. Moreso than usual, businesses’ investments of every kind are coming under intense scrutiny.
Indeed, the reputational challenges surrounding the cost of living may well compound themselves. In the first six months of 2022 we have seen a growing expectation that companies will find ways of easing the burden on their most vulnerable customers. Social tariffs are, at present, an opportunity to be ranked among those brands that are stepping up to the challenge and helping the country through a difficult period. But even social tariffs have the potential to turn sour. Will bill payers still see subsidised rates as generous when they are struggling to make ends meet, or will they wonder why their own bills keep rising so that others’ can remain low? A thorough understanding of a business’s customers is essential to keep not just your messaging, but your whole business strategy, relevant and on point.
Time for an agile strategy
With economic and reputational headwinds, it is imperative that businesses plan for the months ahead. A clear and informed marketing and communications strategy is vital to safeguard against reputational threats and, at the same time, ensure that any opportunities are acted upon. With consumers hyper-focused on value for money, businesses will have to demonstrate the quality of their core services and products. Businesses’ ancillary actions or policies on ESG activity, support for vulnerable customers, and other investments will likely be put under the microscope, particularly if they appear to distract from people’s concerns regarding the cost of living.
As such, businesses will need well-designed and adaptable strategies to avoid damage to their reputations and their bottom lines. Such strategies will require deep understanding not only of the economic pressures facing businesses but also the attitudes, behaviours, and preconceptions of their multiple and varied audiences across society. Understanding how complex global socio-economic and political issues affect how your audiences feel about your business and your brand is hard. Understanding how they feel about them is one thing. Understanding why, and what to do about it is more complex. It is however, what will enable you to confidently predict the outcomes of your strategic decisions, safe-guarding your business in turbulent times.
Confidently predict how audiences will respond to your business initiatives.