When times are uncertain, how people manage spending and saving can get lost in emotions.
Academia has shown as much. Psychological and sociological factors constrain economic decision-making, according to a paper by researcher Michelle Baddeley.
In particular, uncertainty limits "optimising" behaviour normally found in people's economic decision-making. Instead, people often end up relying on simpler decision-making models - for example, "heat or eat?"
Another of Baddeley's observations, however, is that people will make mistakes when planning for the future and that these mistakes will also distort learning processes.
Never has this been more apparent. The cost-of-living crisis has empowered all sorts of decision-making, and people may be making all sorts of errors due to their attribution biases.
In social psychology, "fundamental attribution error" is the name given to misinterpretation of people or circumstances due to over-reliance on evident observable behaviours alone - in other words, failure to consider unseen potential reasons influencing those behaviours.
For example, road rage at a fellow driver doesn't usually take into account the offending driver's own life situation. Did they pull out without looking because of a mitigating factor, such as distraction wrought by a recent life tragedy?
The current zeitgeist of angst and uncertainty will bring emotion to the forefront. Emotions and visceral factors will play a key role in how people manage this crisis - not only affecting people's actions and choices but also the connection between information, learning and choices.
These facts have become a focus for the Agency Development team at News UK.
It has led us to consider shaping customer relationships through a three-pronged model...
"Connection" is commonly defined as a relationship in which a person or thing is linked or associated with something else. To be "linked or associated" with someone or something appears more significant than merely being aware of someone or something.
Just because you have someone's attention, that doesn't mean you have any sort of connection.
Through a commercial or marketing lens, if consumers are aware of your product, brand or creative, it doesn't necessarily mean that a connection has been made between that message and their own learning and choices.
This is where the importance of context becomes apparent. If the context in which a brand message is being delivered is one that is aligned with the consumer's need or emotional state, then that is when a connection can be made.
A consumer will only feel "linked", or "associated", if they learn something about themselves or the product.
This learning impact is enhanced by the company the brand keeps. However, deeper connection will be found if a brand can tap into the consumer's psyche using emotional intelligence (EQ).
The psychologist Daniel Goleman first brought emotional intelligence to a wide audience with his 1995 book of that name.
He found that the qualities traditionally associated with success - such as intelligence, toughness, determination and vision - are insufficient.
Goleman wrote: "Truly effective leaders are also distinguished by a high degree of emotional intelligence, which includes self-awareness, self-regulation, motivation, empathy and social skill."
Studies have been conducted into the emotional intelligence of brands, and how this impacts on their business performance. For example, Carat's Brand EQ Report 2022 surveyed 15,000 people and 51 brands across 15 countries, with questions based on the criteria listed above.
The study found that the top 20 emotionally-intelligent brands saw a 910% stock market gain between 2010 and 2021. The study also established that brands which aim to create customer value score high for EQ.
Of course, never has "value" been more often discussed than in the current cost-of-living crisis. Clearly, tonality, appropriateness and authenticity will resonate with the modern consumer. This can only be achieved when context enables connection.
There has been a return to conversation in media since the pandemic restrictions have lifted.
The transactional, perfunctory nature of interactions via Hangouts or Teams has been replaced by discursive meetings which enable attention, creativity and innovation.
Meaningful conversations, of course, require self-awareness, which is the foundational competency of emotional intelligence.
A new model
Conversation, connection and context should form a strategic framework for all brands and publishers into 2023.
If brands can build a meaningful conversation with the consumer by being self-aware, this may lead to a connection.
But those first two are dependent on the context being the
right one to facilitate both conversation and, ultimately, connection.