By: David Wachs, CEO of Handwrytten
Nearly every industry has been impacted by rising prices. While the price of craft beer, hard seltzer, and cider has not risen nearly as quickly as gasoline or groceries, prices have gone up. In addition to ongoing shipping delays and labor shortages, rising prices for grain and fertilizer after Russia’s war against Ukraine is intensifying price increases. Restaurant prices have had the largest gains since the 1980s, also reflecting higher costs for food and workers. As consumers become more discretionary with their spending, they have been paying more attention to prices across brands and have even been willing to ditch brands they have been loyal to for years to spend less whether they are enjoying a beverage at home or at a restaurant.
Retaining loyal customers and recapturing their purchasing power once their budget can afford it or prices return to lower levels is reliant on brands having open and transparent communication with customers during inflation. While no one enjoys paying more for goods and services, it is something everyone is being impacted by, creating a universal understanding and acceptance that prices must go up. However, that does not mean that customers will be amenable to drastic or sudden price jumps, increases that seem out of alignment with competitors, or higher prices that appear to last longer than necessary.
Most marketing and sales experts would agree that customer retention is more cost-effective for a business than new customer acquisition. As consumers and businesses watch their discretionary spending and cut back on perceived extras, savvy companies will invest more effort into maintaining positive relationships to protect their bottom lines. However, receiving an email, text message or phone call may be the last thing a customer wants.
They might also be the last thing a customer pays attention to. The amount of promotional email the average person receives on a daily basis can be overwhelming. Not to mention that many email services now allow users to filter emails considered to be promotional into folders where they may never be seen, let alone opened and read. Text messages from unknown numbers typically stir feelings of suspicion. An unexpected text message might even be viewed as a smishing scam trying to steal personal information. A handwritten note is entirely different, it invokes curiosity versus fear or annoyance.
Nothing says “pay attention” like a personalized handwritten note. No one flips past or does not see a handwritten envelope in their mailbox. These stand out from everything else that was delivered. Recipients wonder what could be inside and while envelopes that look like bills or advertisements and graphic postcards are set to the side, handwritten envelopes are usually opened immediately. The attention-grabbing nature of a handwritten envelope provides an instant advantage that even the biggest and most prevalent direct mail marketers cannot overcome.
Spending hours writing notes by hand can be prohibitive, especially for businesses that have been struggling to hire, so consider hiring a robot to pick up a pen and do the writing instead. Handwritten envelopes have been found to have a 300% greater open rate than standard envelopes. And handwritten marketing has response rates 7-21x greater than printed mail, with a return on investment 3-7x greater than print. Some companies have even found that retention rates are 50% higher for customers who receive a handwritten thank you note.
The value of sending a handwritten note is enhanced by integrations with CRM systems that automate the process of when to send a note to a customer and what message to include. For example, a brewer can automate notes to send to customers on the anniversary of their joining a loyalty program, when there are special deals or limited time offerings, events taking place at local tasting rooms, or on other special occasions like customers’ birthdays.
A handwritten note could even be used to explain to customers why price increases are happening. While an end consumer might have heard that the cost of fertilizer has gone up, that there is an aluminum can shortage, and that labor costs are rising, that does not mean the will think of these things when they are standing in the refrigerated section at the grocery store or ordering from a menu at a restaurant. In that decision-making moment, brewers do not want to be a faceless corporation that is raising prices to take advantage of a consumer. A more advantageous situation would be to be the brewer who sent a handwritten note thanking that customer for remaining loyal to the brand, when possible, despite price increases that were necessary for x, y and z reasons. Reminding customers of the people behind the production scenes of their favorite beverage and explaining the challenges being face humanize the situation and remind customers that everyone is in this together.
Not all of the information a brewer may want to communicate to customers could be explained in one card, but that tool could be the gateway inviting a customer to visit a landing page that breaks down the need for price increases. Instead of just skirting the issue with a message from the founder, dive into the issue. Profile employees who go to great lengths to get to work on a daily basis and highlight the increased cost for them to put gasoline in their vehicles. Explain the challenges being faced by farmers who have had to pay more for diesel to run farm equipment, on top of fertilizer costs that rose 80% in 2021 and another 30% or more in 2022. Provide insights into the costs of operating the brewery and how higher energy bills might be impacting the bottom line. Knowing they why and how behind price increases will certainly not help retain or win over every customer but making the effort could be the difference-maker for some people. And if others cannot afford to continue buying while prices remain high, the good intentions of a brewer’s transparency could be what brings that customer back sooner or wins them over from another brand once prices are reduced. Especially if they feel a brand that they were fans of in the past took advantage of the situation and turned inflation into “greed-flation”.
In addition to providing insight to customers about why price increases are happening, invite and give them the opportunity to provide feedback and ask questions. Ensure that customers have multiple avenues to contact a customer service representative at the company and that feedback and answers are provided in a timely manner. Allowing customers to provide feedback makes them feel more invested in the brand and can help build stronger relationships that can withstand difficult times.
By offering customers opportunities to provide feedback via the company website, email, or social media channels, brands can have more control over their ability to monitor and respond to the feedback they are receiving compared to customers leaving feedback and reviews on public forums or other social channels that are more difficult to track and can damage reputation. Responding to customer feedback is just as important as asking them to provide it.
Customers will feel more valued, appreciated, and heard by a company that thanks them for supporting the brand. And if feedback is negative, a brand might be able to win over a new customer while impressing those that are already loyal by listening and maybe even implementing change based on customers’ opinions. This makes customers feel that their feedback did not go to waste and was important. Building a feedback loop with customers creates more of a community, can help with customer retention, and is what brands that last the tests of time get right. Imagine getting a thank you note from a brand because of a review left on a website or commentary posted on a social media channel. Most customers would be amazed that a brand would care enough to go to that effort and would remember it.
There is no quick fix to help businesses recover from pandemic complications and now inflation. How deeply inflation will impact consumer spending habits remains to be seen. Identifying ways to recruit and retain employees as costs increase and labor shortages persist will take creativity and new approaches. As brewers develop solutions and evolve to thrive in the post-pandemic era, the need for effective communications will not diminish. After two years of a seemingly never-ending stream of new problems, making the most of upcoming opportunities will be critical to making 2022 as successful as possible.