How Do You Keep Customers During Inflation: 9 Useful Tips

Inflation is a major challenge for individuals and businesses alike. When prices rise and purchasing power declines, consumer buying behaviors change. Stores must then put in place clever and effective strategies to maintain their sales and retain their customers even in times of inflation.

How do you keep customers during  inflation? Here are 9 tips to help you sell more during periods of inflation:

1. Be there for your customers
2. Understand your customers
3. Have competitive prices
4. Create added value and showcase it
5. Review the product variety
6. Make the shopping experience easier
7. Communicate with transparency
8. Build existing customers loyalty
9. Offer multiple payment methods

Before taking action to keep customers in times of inflation, it’s crucial for retailers to understand how customers react to inflation.

How Do Customers React to Inflation?

Consumers are the first to suffer from inflation. They have to bear the increasing prices for many products and services. They have no choice but to change their spending habits. Here’s how customers respond to inflation.

Less Non-Essential Expenses

Due to price increases, customers choose to reduce their non-essential spending, i.e. spending on hobbies, trips and restaurant meals. This gives them more money to meet the rising prices of basic necessities, such as basic food, rent, electricity and transport.

Looking for Cheaper Products

In times of inflation, customers pay more attention to prices and compare offers to find similar products at a lower cost. They often opt for generic brands, as they are usually less expensive than popular brands.

Customers are also looking for substitute products. They turn to cheaper brands, bulk items or cook more meals at home. Customers are looking to save money.

Price Negotiation

In the case of some products or services, customers try to negotiate prices with sellers or merchants, especially if they buy in large quantities or if they are loyal customers. This practice is common in industries where competition is high.

In times of inflation, customers buy less and they become more demanding in terms of value for money. 

Here are some ways to keep customers even in periods of inflation.

1. Be There for Your Customers

During times of inflation, merchants should do their best to be there for their customers and to provide support. This can be done by helping them save money or by helping customers find in the store substitute products that cost less.

Help Customers Save Money

Helping customers save money can be done by offering financial advice. Companies can, for example, give them tips for spending within their budget at the store, give advice to save money or recommend less expensive substitute products or services.

Stores need to be responsive to customer needs and their desire to save money to keep them buying. For example, stores can offer digital coupons with attractive promotional offers. Targeted discounts to periodically save money helps a lot to keep customers engaged.

People are looking for discounts and coupons. They want to get a great deal, especially in times of inflation. Many people base their shopping decisions on the coupons they have and special offers. Discounts and “buy one, get one free” offers attract customers.

Discounts and Freebies

Discounts and freebies boost customer loyalty and sales, but sometimes businesses are unable to offer them. In that case, the best solution is to do fewer promotions, but make them more effective. This can be done by creating targeted and personalized offers based on customer behaviors, their needs at the moment, and statistics you have collected such as the frequency of purchases.

Help Customers Find Alternatives

Being there for customers also means helping them find alternatives that allow them to save money or have access to the products they need even if prices have increased.

If you offer cheaper, but still quality, alternatives, customers are more likely to continue shopping at your store. Do not hesitate to make promotional campaigns to make these products known to your customers and encourage them to buy them.

Ask Customers How They Are Doing

To be there for their customers during difficult times of high inflation, retailers can also simply ask their customers how they are doing with the sole purpose of listening.

For example, ask them questions on your store’s social media. Here are some examples:

1. How do you deal with changes in the economy?
2. What is important to you when engaging with a company?
3. What did you have to give up because of the price increases?

Take the time to thank your customers for their purchases and for their loyalty. By showing that you care about your customers, recognizing their loyalty, and understanding their situation, you can build a lasting relationship with them that goes beyond buying from your store. If they realize the business is there in good times and bad, they’re more likely to continue supporting your store in return.

2. Understand Your Customers

In order to meet customer needs, you must first understand them. There are several ways to do this: analysis of customer data (age, preferences, socio-demographic profile, financial situation), purchase history, surveys or feedback forms. It is thus possible to know how loyal they are to your store, their state of mind and how they spend their money.

Even if you think you understand your customers well, it is a good idea to update your understanding of customers during inflation. Customer consumption habits change with rising prices, and what you knew about customers may no longer be relevant. Understanding customer preferences, expectations and needs is key to retaining them in times of inflation.

Find out here how to analyze customer data with point of sale software.

Customer Perception

In times of inflation, customer perception changes. When they get to checkout to pay and see how expensive it is, they notice the inflation and they become more price sensitive. They are looking for transparent prices that accurately reflect the value of the product or service. By offering quality products at competitive prices, a store attracts and retains more customers, even during the toughest times for the economy.

Stores can also put emphasis on the perceived value of products and services that they offer. For example, they can emphasize product quality, offer exceptional customer service or tout extended warranties. Retailers have the power to influence customer perception.

Focus on the Customer

Customer-centric marketing and sales strategies are the most successful ones.

Personalize your marketing by making precise personalized recommendations to the customer! Consumers respond better to targeted ads. In your advertisements, you must address genuine customers needs and provide solutions to the problems they encounter.

By understanding customers and their perceptions, you can meet their needs in the right way and at the right time. A customer-centric approach involves reaching out to them strategically. You can take into account the preferences and needs of customers to adapt your offer. This makes it possible to be more efficient and to add services that are truly useful to customers. 

You can improve the customer experience and make compromises that will better serve your customers and increase your revenues. For example, you can provide lower prices in exchange for reduced opening hours.

3. Have Competitive Prices

With inflation, customers are particularly price conscious, so keeping prices as low as possible is a good idea. Before increasing prices, explore options to adapt your approach in order to maintain competitive pricing.

Implement Price Tiers and New Sales Models

To avoid making customers weary with a price increase, it is possible to implement price tiers and thus reach several subgroups of customers and maximize your reach. Price tiers accommodate more customers; there are some who are willing to pay a higher price for additional features or services, while there are other customers who prefer to have a more affordable option.

To keep your customers loyal, do not hesitate to revisit the sales model. Experiment with displays and packaging. For example, offer a subscription to buy the products at a discounted price. You can also sell smaller, cheaper packages and sell more expensive packages as a premium option. Cheaper packages will attract people who want a more affordable option and more expensive packages will attract wealthier customers looking for exclusivity.

Identifying the products that customers truly need in times of inflation allows retailers to know which products to focus on and to adjust prices. If you are aware that customers are purchasing a particular product frequently, consider introducing a smaller and more affordable alternative to complement your existing offerings.

Evaluate Internal Expenses

In order to save money and contain price increases, review internal expenses and costs to see if you could cut in certain places (inventory, supply chain), of course, without compromising the quality of products and services. 

Look at each of your spending and assess the value they add to your business. Ask yourself if these expenses are essential to the growth of your store and how you can reduce them.

To keep prices lower, look for new suppliers, local if possible, who are in a position to offer competitive prices. It also helps to rely less on current suppliers.

In order to free up funds and thus limit price increases, another solution is to lessen inventory. Based on sales and customer preferences, review your inventory strategies and see if you can reduce the number of products you keep in stock. This will save you money and space. You will enhance your efficiency significantly by prioritizing the product categories that truly matter and have the highest demand.

The money you no longer spend helps limit the price increase.

Offer Quality Products

You are more likely to keep your customers if you continue to offer quality products even in times of inflation. It is normal to explore possibilities for reducing production and supply costs, but make sure that you do not sacrifice product quality or customer service.

4. Create Added Value and Showcase It

To differentiate yourself from competitors and make customers accept a price increase, you need to offer added value. This involves additional benefits such as exceptional customer service, a memorable shopping experience, expert advice or exclusive benefits for new customers.

If you increase your prices, but you also have more services to provide, or better products and services than before, the price increase will be more accepted by customers because the upgrade will be there to justify it.

The offer must have value for the customer. The value perceived by the customer is very important. If customers do not perceive an improvement in the new value of the products or services, they will not buy. Do not hesitate to be creative and ask for feedback from customers to find an offer that will have practical added value for them.

Do not hesitate to promote your services that bring added value to your customers. If customers aren’t aware of the services you offer, they won’t be more likely to buy, especially in times of inflation.

5. Review the Product Variety

To keep customers in times of inflation, changing the product variety is often a solution.

Diversify the Product Offering

Diversifying the product offering by offering cheaper alternatives or lesser-known brands helps mitigate the impact of inflation by providing more affordable options to customers.

Reduce Product Offering

Reducing the product offering is a tactic used to make the product range more efficient and to save on products and services that sell less.

Which products sell best in times of inflation? Click here to find out!

So, according to your sales history and customer needs and preferences, you are able to understand which items you can stop selling without hurting sales and profits. Remove duplicate products that meet similar needs. Simplify choices for buyers and limit similar items in your product range to cover all needs without repetition and improve the readability of your offer. This way you can save money.

6. Make the Shopping Experience Easier

Customers want cost savings and discounts, but they also want to save time and a seamless shopping experience. That’s why stores should focus on improving the overall shopping experience, which includes reduced wait times at checkout, attentive customer service and simple exchanges and refunds processes.

Having an online store also improves the shopping experience, because customers have the option to shop whenever, wherever and on their own terms. Customers generally like this flexibility as it makes shopping much easier. See here all the benefits of having an online store.

7. Communicate With Transparency

It is essential for stores to communicate with transparency with their customers about price changes and the reasons behind them, especially if it is simply related to increased procurement costs due to inflation or increased employee salaries. This helps to establish a relationship of trust with customers.

Honestly sharing the reasons for the price increases and the store’s efforts to mitigate the impact of inflation helps alleviate some of the resentment that customers feel when they see their total cart value increase.

8. Build Existing-Customers Loyalty

Focusing on retaining existing customers is a good way to keep customers in times of inflation. Building customer loyalty is achieved through various means such as offering special advantages, rewards programs or exclusive offers.

It is generally less expensive to retain existing customers than to attract new ones. The more purchases a customer makes from your store, the more likely they are to purchase again in the future.

Loyalty or rewards programs motivate customers to choose one store or brand over another. These types of programs give customers an incentive to make repeat purchases. To find out what a good loyalty program looks like, click here.

9. Offer Multiple Payment Methods

Some people struggle financially and are looking for flexibility in payment options. Stores can attract new customers by offering flexible and varied payment options. Many customers are looking for credit to pay for their purchases or the option to delay payment.

Payment in Installments

Some customers will be more likely to buy if you offer the option to pay in installments. Installment payments allow customers to pay for their purchases over time by dividing the total purchase amount into several equal smaller payments. This option is very convenient if a customer cannot afford to pay the full amount now, but will be able to afford it later. This option allows you not to miss some sales, especially if you sell expensive goods.

Be sure to offer all possible payment methods you can: cash, debit, credit, mobile wallet, contactless payment, gift cards or store credit, even checks. You wouldn’t want to lose a sale because you don’t provide a specific payment option!

In conclusion, the period of inflation can seem daunting, but with all the right tools, you will be able to seize the opportunities to stand out and strengthen your relationship with customers. By taking these tips into account, you will undoubtedly retain your customers and even attract new ones!