News that McVitie’s has reduced the cocoa content in its Club and Penguin biscuits because of cost pressures, rebranding them as ‘chocolate flavour’, made the headlines this week.
We will see more of this I am sure as businesses continue to adapt to rising inflation and input costs – issues that, while easing globally, remain persistent in the UK.
Although cost-saving measures in response to these pressures are understandable, the parts of the product we change and way businesses communicate these changes are critical. I am sure many of us are old enough to remember the slogan ‘If you like a lot of chocolate on your biscuit, join our club’ which has now changed to ‘If you like a lot of biscuit in your break, join our club’. Subtle changes in the messaging perhaps, but a core change to the product and perhaps a key part of what made the Club stand out has been removed. Consumers will continue to feel the aftereffects of this long after any financial challenges, and it will be interesting to see the wider impact of this on Club sales.
Product changes and consumer trust – the role of reputation
Changes to product or service offerings are tricky to navigate. Businesses need to consider the wider impact of such changes on their brand’s image and recognise that clear communication is key to mitigating the risks.
Our research shows that 23% of consumers consider poor communication as one of the top three most damaging factors to reputation. Therefore, poorly managed changes can lead to backlash – even when those changes are necessary for financial or other reasons.
Maintaining a strong reputation can also help to limit backlash, as loyal customers are more likely to trust businesses known for delivering a quality experience in products and services, and be more forgiving if they believe the company won’t have taken the decision lightly.
There are also particular risks for businesses whose products are deeply tied to their purpose or identity. For example, if a company has built its reputation on being premium, or “authentic,” any change that compromises these values can lead to a loss of trust.
If a company changes a core part of its product or service offering, it needs to be mindful of how that change aligns with its broader values and purpose as its customers see them. Following consistent values is the key to embedding high service standards and enabling a coherent response to complex challenges. Without this, the long-term damage to customer loyalty, as well as the ability to attract new customers, could outweigh the short-term financial benefits.
Navigating change with sensitivity and care
In short, sensitivity is critical when communicating changes to products or services. Businesses must be transparent about why changes are necessary and provide clear yet empathetic messaging to customers across a range of channels.
It’s also important that companies take a long-term view, considering how these changes may impact customer trust and loyalty beyond the immediate term. Addressing the product and service offering through the lens of the customer, taking into account shifting preferences, is therefore key.
While inflation and other challenges are inevitable, businesses able to respond while engaging with their customers thoughtfully can set themselves apart in a competitive and uncertain market. In some cases, it may even a matter of survival.
To thrive in the long term, organisations must ensure consistency between their communication, business practices and the service offering, to deliver the quality experience customers expect.
Customers may be exercising greater care over where they spend their money, but if businesses are seen to be making a cost-cutting move at a time when consumers are also feeling fraught, there is a good chance this will be remembered in the long run.
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