By: Shea Posey, Senior Account Executive, and Jake McKenzie, Chief Executive Officer
There’s been a lot of debate on whether or not we’re in a recession. Heck…economists, political pundits, and Wikipedia can’t even agree on the definition of the word! One thing is certain, however – consumers have already made up their minds and the news is not good.
According to a Bloomberg survey, consumer confidence has declined for the third consecutive month reaching its lowest level since February 2021. Concerns about inflation, particularly gas and food prices, continue to weigh on consumers.
Persistent inflation, the Fed’s aggressive interest-rate hikes, and the overall struggling economy are driving consumers to change their behavior. As we talked about in a previous CMO Minute, when people go through a period of perceived scarcity, the scarcity mindset occurs. Once it takes hold, the brain undergoes actual physical changes resulting in a lower IQ and less impulse control. The scarcity mindset is also the reasoning behind hoarding and cutting back on discretionary spending.
But there’s another phenomenon that comes out of the scarcity mindset that marketers also need to consider: the ostrich effect.
The ostrich effect is a cognitive bias that compels people to avoid any information they perceive as potentially negative or unpleasant. In other words, they “stick their head in the sand” and pretend it doesn’t exist.
This greatly affects where consumers can be reached. Constant negative news stories (economy-related and otherwise) tend to take a toll. At some point, even the most addicted news junkie will say enough is enough and switch to their favorite streaming service for some mindless binge-watching. So, if you’re a devout local newscast and/or 24/7 cable news network advertiser, it may be time to rethink your marketing strategy to include more positive and uplifting platforms where your message will better resonate during this time of economic angst.
To better understand consumer psychology and to learn more about how you can leverage psychological principles like the ostrich effect in your marketing, give us a call at 833-579-1905 or email us at firstname.lastname@example.org. And for a deeper dive into what marketers can do to reach consumers in uncertain times, check out our Psychology Behind the New Normal webinar!