The rising cost-of-living is undoubtedly having a huge impact on young people, with many entering 2023 burdened with money stresses, financial uncertainty and limited opportunities. And as youth marketers, we know that this time is also having a huge impact on you: How are young people’s spending habits being affected? How should you assign budget? How can you best connect with young people? At Student Beans, we’re here to help, and our recent webinar, What Marketers Need to Know About Students and the Cost-of-Living Crisis, shed light on how marketers can continue to appeal to the student market.
How are young people impacted?
In essence, the cost of essentials (like gas, electricity, rent and food) are all rising faster than the average income, which leaves young people struggling to pay for basic necessities and even less spare cash to spend on luxuries; Student Beans’ insights agency Voxburner revealed that 80% of young people are expecting to cut down on non-essential spending over the next sixth months.
To ease their financial worries, young people will be looking to brands for great deals, with 77% of students looking to use student discounts to cut down on their spending. Alex Ighalo, Senior Marketing Strategist at Student Beans and cohost of our webinar, said: “When it comes to discounts, students definitely see the value in them from a cost saving perspective – it helps them manage their budget across the winter period if they’re able to make savings here and there.” And as well as supporting students throughout this time, discounts are a great way get one step ahead of your competitors – as Alex pointed out, “90% of our students consider coming to a new brand it it did offer a student discount, so if you’re a brand that sees themself as a challenger or as operating in a competitive market, we’d definitely recommend discounts [as a way] to generate sales.”
So how can brands appeal to the student market?
Our webinar shared a series of great ways for brands to drive loyalty during this cost-of-living crisis, with three key points being:
Student discount programmes
“Having a strong student discount has been proven to get great results from our brands time and time again across the board in every territory”, Alex shared, and there’s no better time to introduce a student discount programme or optimise your current offering. Whether it’s understanding how to best present your offers or how to catch the attention of young shoppers, you can get in touch with us today to discover how you can promote your student discounts to drive conversions.
Invest in brand building
Brand building can have a really strong impact on your funnel marketing performance when done consistently and creatively – it’s all about making sure that you’re getting the messaging right for your audience at every single touchpoint!
Identify what your customers value
It’s all about playing the long game, says Alex: “Use this time over the next 12-18 months to focus in on what your customers value – price is a really strong factor and massively determines whether a student shops with your brand or a competitor brand, however it’s not the only factor”. A tip? Get in touch with our insights agency, Voxburner, who specialise in researching what young people think, want and need.
How to maintain sales during a cost-of-living crisis
In our webinar, Alex shared a number of ways over the next 12-24 months that you can maintain sales during the cost-of-living crisis. Here are our top three takeaways:
1. Don’t reduce your media spend
We know the temptation during a cost-of-living crisis is to reduce your media budgets in order to save (this might come from your team directly or a CFO), but Alex expressed the importance of not doing this: “Brands who maintain marketing spend during a downturn or crisis tend to be the strongest beneficiaries off the back of it. Essentially, these companies are better able to take advantage of reduced competition and are also able to maximise new opportunities.” At best, maintain your budgets as they are, and at worst, reallocate them to other disciplines/channels based on the performance you can see, ROI, estimates and forecasting.
2. Invest in brand building
Investing in brand building might not cause an immediate uplift when it comes to sales, but it will improve that important brand-consumer relationship. Whether it’s content, experiences or innovation, a focus on your branding will lead to you being received positively by students… and over time will help you safeguard sales (thank you, student loyalty!).
So when it comes to brand building, what do we recommend? In the webinar, Alex spoke about our Student Beans Creators – a way to deliver authenticity with peer influencers. “[Student Beans Creators] is a great way to work with Gen Z students to promote your brand’s message on platforms like TikTok and Snapchat in a really native environment”, he said. “Media like this can be a really great way to achieve positive results [when it comes to] impressions, clicks, CTRs etc, and when coupled with conversion driving media, you can see a really positive uplift.”
3. Students have fixed outgoings
Put simply, students are, and will continue to be, affected by the cost-of-living crisis, but not in the same way that your ‘average’ person will be. Fixed outgoings will vary depending on where a student is in their higher ed journey – e.g. first year students have their university costs in bundled payments thanks to student accommodation, whilst second, third and fourth years have the freedom to search for the best providers depending on services and budget.
“Students are more likely to be more robust when it comes to how they’re able to adapt and able to handle situations in the cost-of-living crisis.” said Alex, “On top of all of that, they’re probably less likely to have dependents. All of this suggests that despite the fact that students might be worried about rising costs, they’re less likely to be affected than your general consumer in the UK or the US.”
We can’t forget that students also have the benefit of student loans, with 72% of students in the UK receiving a loan or grant, whilst 82% in the US receive a scholarship or the Pell Grant. “Students are likely to be more insulated when it comes to the cost-of-living crisis” said Alex, “Therefore, if you are looking at groups to target, reach or increase investment with to generate sales from, students should be at the top of your list.”.
So there we have it – some key takeaways from our recent webinar to prepare you for 2023 and help your brand and students continue to thrive, connect and invest.
Want to find out more about how you can support students and protect your margins during this tricky time? Sign up now to watch the full session on-demand.