Original Article: The Wrap – Pro Insight by Eric Dahan
When inflation hits, brands have to decide whether they’ll increase their prices, take a hit to their margin, or cut costs — sometimes, they do all three.
Additionally, they must figure out how to respond to consumers, who are more selective about what they buy when their dollars don’t go as far. And while they’re less inclined to spend freely or follow through with big purchases, consumers seek and embrace alternatives to experiences they care about.
For instance, instead of eating out at restaurants, they’ll start cooking and entertaining more at home. Rather than going to bars, they’ll have friends over for homemade craft cocktails. Instead of signing up for kids’ enrichment activities, they’ll do fun things at home.
Each example represents a typical shift in consumer behavior during times of uncertainty — an excellent opportunity for a brand to make the alternative accessible.
Think twice about cutting back on marketing
However, some businesses continue to cut spending on all marketing activities in response to economic changes. Others focus solely on bottom-of-the-funnel activities like paid social. Both are risky moves, given how distribution channels have evolved. Sales are largely direct-to-consumer, powered by eCommerce and multiple purchase points. So staying “top of mind” is critical — because the moment you’re not, your bottom line will feel it.
Remember that consumers will continue to spend money on things that are important to them. And creators happen to be uniquely in tune with what those things are.
Creators are the conduit to your target market
People are more receptive to people than ads — it’s why influencer marketing is so effective.
Successful influencers cultivate their audiences carefully, publishing great content consistently and taking time to answer questions and start conversations. But to earn their audience’s trust, they must be authentic and relatable. It’s an X factor that’s difficult for brands to replicate, and it’s especially powerful during economic uncertainty.
Creators who are deeply connected to their audiences understand how inflation impacts their lives. Tapping into that knowledge is critical when consumers are cutting back and scrutinizing their spending.
Creator marketing has a role in every stage of the customer journey
Once considered a top-of-the-funnel tactic, creator marketing has proved effective at every stage of the customer journey, from creating awareness to building trust to driving conversions. Consider the tactics influencers might deploy throughout the marketing funnel:
- Top of the funnel: Creators leverage their reach and reputation to build awareness through branded hashtags, product unboxings, etc.
- Middle of the funnel: Creators nurture audiences and build trust through how-to tutorials, live streams, contests, giveaways, and more.
- Bottom of the funnel: Creators help their audience make purchase decisions through product guides, offers and promotions, live shopping, and video testimonials.
By participating in the entire buying process, a creator can tell a more compelling story for the brand while being an important touchpoint for consumers.
Creators help brands ride out uncertain times
The benefits of partnering with creators can outweigh brands’ reasonable concerns about marketing spend, especially during times of uncertainty. The right partner can cover all the bases.
- Cost effective: Creator partnerships are a cost-effective way to gather brand content and drive media value through promotion on the creator’s channel. Influencers proved their worth while production agencies temporarily shut down at the onset of the pandemic. One study found that influencer-created content delivered a 40% increase in ad performance at about half the creative costs of a production studio.
- Culturally relevant: Successful creators come in all ages and demographics and represent many interests, making it possible to find a partner that reflects your target customer and is in tune with them and their present concerns.
- Cross-platform: Influencer marketing used to be limited to a few platforms, predominantly Instagram and YouTube, but it has since expanded successfully to newer platforms like TikTok, giving brands more choice and the ability to market to even wider audiences.
- Full funnel: While it’s natural to want to focus on bottom-of-funnel marketing efforts right now, skipping essential steps in the buyer journey leaves revenue on the table. Creator marketing offers a more effective full-funnel approach that expands a brand’s reach, establishes trust, and motivates action in ways a simple offer code can’t.
- Measurable impact: Social commerce has made attribution possible, allowing you to prove creator partnerships are driving transactions for your brand.
Creator marketing will help you thrive in any environment
Whichever lever you pull in response to inflation — a price increase, margin decrease, or cost cut — your success during uncertain times hinges on understanding and responding to consumer behavior.
But knowing what experiences and expenditures they can’t do without requires knowing consumers on a deep level. And that can be a tall order for a brand’s marketing department.
The right influencer, however, is like a canary in the coal mine. They’re sensitive to their audience’s hopes, aspirations, and worries and how they impact their behavior. As a result, they can interact authentically and deliver the right message at the right time.
Brands that recognize the unique power of creator marketing can uncover opportunities and grow their business in any environment, regardless of the inflation rate.