There’s a growing economic power divide across the nation and more so than ever before, audiences are segmenting. While interest rate rises caused a mortgage crunch earlier this year, they have also meant that savings rates hit 6% over the summer. And, while higher earning households have been taking advantage and moving their savings into fixed-rate accounts, many have been struggling to make ends meet.
Our MoneyMinds insights explores the biggest trends impacting financial services next year, and in this blog series we’ll be diving into each of the trends. The second trend looks at this power divide, and how it is segmenting audiences.
We found that 43% of high earners expect their lives to be better in five years’ time, compared to 33% of middle earners and just 21% of lower earners. In reality, it’s easy to understand why so many have a cautious outlook in an environment where inflation has typically exceeded wage growth.
When we look ahead to 2024, brands need to be mindful that while 75% of high income households (>£83K) plan on increasing the amount of money they are saving each month, just 39% of lower earning households (<£39K) feel the same. And, in this increasingly divided financial world, some brands will double down on audiences, while some will try to span all of them.
It’s perhaps easy to suggest that hyper-personalisation is the answer to this challenge. But in reality, audiences just want relevance. They want to feel like they resonate with the brands they feel connected to, and that those brands understand them and their individual set of challenges.
Marketing 101 tells us that understanding your target audience is the first step for any successful campaign. What it doesn’t tell us is that during periods of extreme volatility, we need to continuously learn about our customers. What are their pain points; what are their aspirations; and how are their short and long term plans shifting as a result of the external environment. Brands which devote themselves [to their audiences] during difficult times will have stronger outcomes later down the line.