Has shopping around for deals become the standard modus operandi for the bulk of your organisation’s customers?
If you answered in the affirmative, you’re far from alone. We’re now three years in to a cost-of-living crisis that’s pushed millions of Australians onto Struggle Street.
Interest rate rises and increases in the cost of rent, utilities, groceries, insurances and a plethora of other non-discretionary expenses are making it harder than ever for households to make ends meet.
As a result, consumers are looking for savings wherever they are to be found, making what the NAB Consumer Sentiment Survey Q2, 2024 describes as ‘deliberate and considered spending changes’.
‘The most common behaviours include being mindful or careful about where to spend money, switching to less expensive products to save, researching brands and product choices before buying and making purchases because of deals’, the Survey report noted.
Price and value have become paramount and customers who remain loyal to a supplier now expect to be rewarded financially for their fidelity.
Exploring adjacent opportunities
Against this backdrop, businesses are having to work harder than ever to ensure they’re offering a compelling value proposition and a consistently excellent customer experience that differentiates them from the competition.
However, these challenging conditions also represent a golden opportunity, for businesses with solid brand equity and large, engaged customer bases to launch complementary, ‘brand adjacent’ offerings. Evidence shows it’s a great way to expand customer relationships, deepen loyalty and engagement and increase customer lifetime value.
It’s the reason utility companies and banks are active in the mobile and broadband spaces, why Australia Post is a popular purveyor of travel insurance, and why supermarkets are segueing into the tourism sector.
Delivering multiple offerings allows these businesses to engage with their customers more frequently and offer keenly priced ‘bundle’ deals that deliver the value for money today’s cost conscious consumers are seeking.
With a plethora of customer data at their fingertips, opportunities to cross-sell and upsell are plentiful – and research shows customers who obtain several lines or services from a single supplier are more loyal over the long term than single purchase buyers.
It’s part of the reason the global subscription economy is continuing to grow at a healthy clip, with total revenue expected to increase from $593.4 billion today to $996.7 billion by 2028, according to Juniper Research.
Tools to make the task easy
Establishing a brand adjacent business is a high stakes move and getting it wrong could potentially damage your business’s reputation and brand equity. Companies that struggle are typically those that attempt to move too far away from their core offerings and values; delivering propositions and customer experiences that have little in common with their usual look and feel.
Getting it right is significantly easier with the right tools, namely subscription management technology that enables businesses to launch, monetise, manage and scale brand adjacent services quickly and cost effectively.
Select a platform with a low or no-code design and flexible integration capabilities and you could bring your brand adjacent offering to market in as little as three months. That’s providing you choose to partner with an existing service provider, rather than acquiring or building a brand adjacent enterprise of your own.
Ideally, you’ll opt for technology that lets you establish seamless data flow and automated workflows across all divisions of your business, view and manage customers’ information via a single hub, and deliver personalised interactions that drive engagement and results.
And if your platform incorporates sophisticated data analytics functionality, your marketing and business development teams will be able to use it to formulate accurate predictions that help to maximise sales and customer value over the long term.
Driving loyalty and growth in 2025 and beyond
Tough conditions look set to continue into 2025 and so will Australians’ collective quest for savings and value, as they strive to balance their household budgets and stretch their scarce dollars further.
Launching a brand adjacent offering can be an effective way to maintain and grow revenue, and boost customer lifetime value and loyalty, in these straitened times.
And an AI-driven subscription management platform makes doing so a simpler and more cost effective proposition.
If profitable diversification is on the agenda for your business in FY2025, it’s enabling technology you can’t afford not to invest in.
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