COVID-19 is changing consumer decision behavior. Stay-at-home guidelines and stock shortages have accelerated online behavior and trials of new product choices. Which behavioral shifts will last?
As marketers, you need to quickly adapt to consumers’ short-term needs, while also keeping an eye on shoring up your long-term strategies.
To make the right decisions, it’s vital to understand the fundamentals of decision behavior.
The SKIM Habitual-Deliberate Decision Loop provides a framework for companies to understand decision behavior and help guide their business strategies – to achieve both short- and long-term goals.
It is especially useful to understand how COVID-19 dramatically changed the context of decision making. For consumers, the global crisis triggered a disruption, moving their “habitual” purchase decisions to more “deliberate” shopping behavior. With over 40 years of expertise analyzing consumer behavior, we’re here to help with tips and best practices.
Read more about the steps you can take to adapt to consumer decision behavior in the wake of COVID-19.
Adapt your marketing mix for short and long-term success
You know you need to adapt your marketing mix as you react to unprecedented events. To thrive in both the short and long term, it’s important to adapt your “4Ps” (product, place, promotions, and price) in the context of decision behavior.
As revenue is generated by consumers, it’s heavily dependent on the situation they are in. This means that the context for pricing and net revenue management (NRM) has also been disrupted.
To succeed in your revenue management strategies, you need to use your business levers (product, brand, price and promotion), and consider the external context. This includes anticipating and influencing consumer decisions following the Corona crash. What economic and commercial factors will influence them? How sensitive will consumers be to change and will they still be willing to pay for your product?
There are learnings to be gained from previous crises and from consumer behavioral frameworks. However, you also need robust consumer insights to help you understand the consequences for your revenue potential, answering questions like:
Should you drop your prices?
Is now the time for aggressive price promotions?
How can you protect your long-term revenue potential, while adapting to changing, short-term priorities?
With many of the behavioral shifts taking place, you may be wondering the impact on price sensitivity, Consumer consumption and their “willingness to pay” for certain products and services can change from one day to the next depending on lockdown restrictions, travel bans, news, and economic conditions.
In the “Impact of COVID-19 on consumer price sensitivity” we explored if and how price elasticities have changed before and during the crisis. We re-ran 8 large pricing re-run studies in April across CPG categories in the US and Europe. The results may surprise you.
If you’re considering conducting pricing or portfolio research during the crisis, it’s important to consider the power of data and hard facts. Especially as you prepare for tough retailer negotiations during the recession.
How to optimize your eCommerce strategy during disrupted consumer behavior
With their usual shopping habits disrupted, your consumers are being pushed to try something different in implicit or explicit “forced” trials. This includes the rapid acceleration of online shopping ranging from Amazon to local grocery stores, click & collect, subscription services, and food delivery apps.
It also means shoppers who normally choose your brand may be forced to try other brands online.
In this context, how should you optimize your online strategy to keep, or win back, customers? Consider these three strategies to help you succeed:
From rethinking consumer journeys to the role of product promos and optimizing digital content, we’re sharing tips to get your online offering to the best place possible. Please to learn more about three proven strategies for eCommerce engagement and conversion.
Exploring psychological distance, social distancing and decision
Social distancing has had an immediate impact on marketing across industries. You have likely already adjusted your short-term communication strategy, but how should you react in the longer-term?
SKIM’s Psychological Distance Theory helps explain how the way in which a situation (or product or service) is perceived will affect the reaction to it. It argues that the greater the psychological distance from it, the less likely people are to alter their behavior.
A look at how psychological distance played out in the early stages of the pandemic delivers valuable decision-making insights. In particular, it helps explain the different reactions in Asian and Western countries.
The theory can also be used as a tangible way to improve communications for your brand or organization. As the new normal evolves, how do you adjust your communications to reflect consumers’ new desires? And how could you communicate broad-reaching issues (e.g. sustainability) more effectively? Understanding psychological distance in today’s context can also help us better understand human decision-making.