The Federal Reserve made a difficult decision today that will affect consumers’ spending habits this holiday season. On Wednesday, the Fed raised its key short-term rate to a range of 3.75% to 4% -- the highest in 15 years. It was the sixth rate hike this year.
A national study from Treasure Data, an enterprise customer data platform, uncovers just how impactful rising costs have been on marketers and consumers.
The survey of 2,000 American consumers and 500 U.S.-based marketers shows that priorities and habits are shifting in the wake of an economic downturn.
The data shows that more than 75% of brand marketers have changed their marketing strategies as a result of inflation and rising costs, and 69% of marketers said that they are already making budget cuts as the cost of doing business rises.
The findings also suggest consumers expect brands to be sensitive to their individual situations and tailor communications accordingly, but many are not prepared to share their personal data to allow that to happen.
One-third of U.S. consumers -- at 34% -- do not use their primary email address when signing up to emails from brands. Some 41% deliberately try and withhold their personal data from brands, and 23% admit to sometimes providing false data about themselves.
Some 78% of consumers participating in the survey believe marketing campaigns should be sensitive to customers’ changing priorities and needs due to the cost of living.
About 82% of consumers said they need to be able to trust a brand with their personal data if they are to buy from them repeatedly, yet only half have seen the benefits of sharing their data with brands in the form of tailored services and communications. Some 68% expect more from the brands in which they shared accurate personal data.
Irrelevant communications and lack of sensitivity cost consumer loyalty. One in 10 consumers feel marketing communications during the past six months have been less sensitive and appropriate to their personal financial situation, despite 96% of marketers suggesting they have a good understanding from their customer data of how the cost-of-living increases impact customers. This should enable marketers to create campaigns sensitive to consumers’ changing needs.
The report calls this dissatisfaction “toxic for marketers” because today’s consumers are quick to judge. More than one-fifth of customers said they will unsubscribe from a brand within a week if communications are not relevant, and 38% will do so within a day or less.
While more needs to be done to improve the way marketers use customer data, 57% of marketers don’t feel properly equipped to get the most out of the data they use for marketing. On average, marketers believe they waste 38% of their budgets due to poor optimization based on customer data. This is a significant loss, considering that the average marketing budget over the past six months was over $15.6 million. And this is money that marketers can’t afford to waste.