Switching brands in the midst of high cost of living for business owners
Most businesses are currently under enormous pressure from both internal and external factors, with customers regarded as the most important factor influencing business results.
Advertisement
Consumers have recently been forced to cut back on their spending due to a reduction in their disposable income as a result of the high cost-of-living crisis.
Brand switching refers to a shift in consumer purchasing habits in which long-term customers choose to switch to a different brand.
This change typically occurs when a consumer uses one brand of mobile phone (for example, Apple iPhone) but wishes to use a different brand (Samsung Galaxy).
Competitive attractiveness, consumer dissatisfaction, and other variation-seeking variables are all factors that influence brand switching.
It is critical to understand that customers switching brands can have a negative impact on your revenue and profit streams.
As a result, it is beneficial to comprehend why consumers choose to switch brands.
This knowledge will allow the company to focus on customer loyalty promotion for their brand, preventing sales and market share losses.
Customers are currently switching brands for the following reasons.
Price
Customers switch brands based on affordability and perceived value at a given price. The decision to switch brands is high when the prices are high and if your competitors are increasing their advertising strategies to attract customers.
Loyal customers of a particular brand, however, will continuously buy irrespective of the price of the product or services up to a point before they consider another brand to switch.
I will advise businesses to put in strategies to prevent their customers from switching to competitor brands due to prices by examining their target customers spending plans, what they want to spend on, and at what price they are willing to pay.
Is the target customer more driven by a lower price or perceived value of the product or services, and is the competitor pricing lower for comparable products?
Customer service
SME owners should be aware that it only takes one bad experience for a customer to switch to another brand. Poor customer service can frequently lead to negative brand sentiment, which can cause a customer to switch.
I believe that customer service can make or break a brand, especially when customers can easily communicate their negative experiences through social media reviews and word of mouth.
I advise businesses to respond quickly to all customer requests or questions, as well as to understand their expectations and experiences with the company brand.
Businesses should train their employees in customer management, particularly in developing customer personas, dealing with difficult customers, and putting the right people in customer service positions.
Lack of innovation in Products and Services
Customers nowadays are interested in the freshest, newest and best products and services. They will easily switch when your product and service offerings lack innovation, especially compared to your competitors.
One of the reasons I believe iPhones seem to gain more customers via brand switching every time they release a phone model with fresh, groundbreaking features -Innovation. Some key questions I want every business owner to answer are:
1. Why are customers losing interest in your products and services?
2. Are your competitors offering something new and different?
3. What are you competing on, price, innovation, and customer service?
4. What do your customers want?
Conducting Market Research
One of the main strategies for getting ahead of brand switching is by regularly undertaking marketing research to assess how your current customers feel about your brand and understand why they will probably switch.
I will advise businesses to assess their brand sentiments regularly, clearly define their target market and develop product offerings that will resonate with them.
SMEs can also adjust their brand positioning according to the customers’ tastes and preferences while ensuring that their clients receive the highest quality customer service.
Finally, businesses should also analyse the factors influencing their customers’ purchasing decisions and the possibility of them switching to a competing brand.
The owner of AFB Golden (Green Hair and Skin Care) explained, conducting market research has actually helped in developing the right products to suit her customers skin and hair regime.
This has also led to repackaging of her products to reach the international market.
Andrews Ayiku,
Lecturer/Business Coach
University of Professional Studies Accra,
[email protected]
