Is Your Customer Walking Away from Your Brand or Unable to Afford It?

According to the Statistical Centre of Iran, point-to-point inflation reached 89.8% in Shahrivar 1405, a situation that puts pressure on household purchasing power and confronts companies with declining demand. In this situation, identifying the real cause of sales declines has become more important for brands.

Sefir Arjan - The constant increase in prices and the drop in new orders have turned consumer behavior into a serious challenge for Iranian brands. Now the main question is how companies can manage their sales properly without losing the trust of customers in this inflamed market.

According to the report of the Iranian Statistics Center, point-to-point inflation has reached 89.8% in Shahrivar 1405. This statistic shows that the cost of buying a fixed basket of goods and services costs on average about 90% more than in September of last year. Although this figure does not mean a 90% drop in the amount of people's purchases, it clearly shows how much pressure the consumer is struggling with to maintain his previous level of consumption.

The message of this economic data for brand managers is quite clear. They now have to engage with customers who are much more cautious about spending their money. Despite these conditions, it is appropriate to raise the question whether the language of advertising and management decisions have also changed along with market changes?

Does the customer go through the brand or the purchase?

When prices outpace a family's income, consumption choices become increasingly difficult. In this situation, it seems quite natural to postpone the purchase of household appliances, eliminate unnecessary goods or switch to smaller and cheaper packages. These are the possible market reactions.

Hence, it is crucial for brands to identify the root cause of customer behavior change. A person who does not buy their regular product is not necessarily dissatisfied with its quality. He may still be loyal to the same brand, but he can no longer afford it. If the company does not understand this subtle difference, it is likely that it will try to compensate for the loss of sales by bombardment of advertising alone, while the main challenge is the mismatch of the price of the product with the purchasing power of the consumer.

Cost pressure is not a justification for secrecy

Manufacturing companies are also constantly under the pressure of inflation. The skyrocketing growth of the cost of raw materials, transportation and wages, forces them to correct the prices. Customers usually understand this economic determinism, but they expect to know with full transparency exactly what they are getting for the money they are paying.

For example, if a manufacturer decides to reduce the weight of the product but keep the appearance of the package intact, it must clearly communicate this change to the buyer. This gives the customer an opportunity to compare, and concealment in such cases can turn a challenge into a crisis of distrust. A price increase may make it difficult to buy today, but feeling cheated will destroy the relationship between the buyer and the brand for a long time.

Based on this, providing many and constant discounts is not necessarily the best answer to the market and can jeopardize the profit margin and ultimately the quality of the product. On the other hand, solutions such as offering smaller sizes with clear declaration of weight and price, designing more economical services or maintaining the quality of the main product while providing affordable options are much more efficient. These items should be measured based on the nature of each business and we should not forget that the cheaper the final amount of a product, it does not always mean that it is more economical.

Advertisements must answer today's customer questions

In an age where purchasing decisions are made with more sensitivity and calculation, repeating past advertising messages will no longer be effective. Today, when a family buys a refrigerator, before paying attention to the appearance of the device, they follow its durability and repair costs. The buyer of food products also considers stability of quality, reasonable price and availability of goods.

Therefore, instead of just encouraging the audience to buy more, brands should clearly explain what added value their product provides and what the actual cost of using it is. This change in approach never means stopping advertising or lowering the class of top brands, but it shows a deep understanding and taking seriously the concerns of the audience.

A responsibility that goes beyond the boundaries of the marketing unit

The marketing team can never cover up the damaging effects of bad pricing decisions or poor quality with catchy slogans. Decisions about the type of packaging, after-sales service, profit margin and composition of the product portfolio are directly the responsibility of the company's management team. Therefore, maintaining the reputation of the brand in such a difficult market will be the direct duty of the CEO and senior managers of the group.

In the current economic situation, the increase in rial of income is not an accurate measure of success. The amount of sales may have increased, but the number of goods sold or the number of visits by customers may decrease. In addition to reviewing revenues, managers should examine the actual volume of sales, customer return rates, complaints, and reasons for abandoning purchases. Talking to lost customers is the best way to get to the bottom of whether the problem is price or quality and service experience.

Undoubtedly, no brand can control inflation alone, and an economic enterprise cannot be expected to ignore its real costs. However, it is entirely up to companies to be honest in communicating changes, offering a variety of options, and responding to criticism. The result of these measures should also be measured based on real data and feedback, and not just the claim of customer loyalty.