New Zealanders are faced with an unprecedented set of challenges as current inflationary pressures follow on directly from the uncertainty of the Covid-19 lockdowns.
Kantar’s Finding Financial Freedom webinar explores the changing face of financial wellbeing in New Zealand, based on input from 1,500 Kiwis.
The Kantar Public One News Poll showed that consumers are becoming more pessimistic about the New Zealand economy, with half thinking the economic situation would get worse in the next 12 months and only a quarter feeling it would get better – net negativity that has clearly strengthened recently. This pessimism is also evident in Kantar Insights’ own survey. Only a quarter have high confidence in their financial situation and two-thirds are more concerned now than they were 12 months ago – that’s quite a shift given that 2021 was impacted considerably by Covid-19.
Kantar’s findings from our ground-breaking research of New Zealander’s financial concerns, expectations and experiences suggest several implications for New Zealand brands.
Firstly, it doesn’t all come down to reduced pricing, though demonstrating value is more important than ever. Great service, maintaining trust, good engagement and a personalised experience are all key when it comes to consumer’s purchasing decisions, for all brands. For financial services brands specifically these build up to two customer financial freedom related goals – building resilience and maximising success. Resilience relates to encouraging consumers to build their ability to withstand financial shocks and also offering support when things do become challenging. Success maximisation is about helping consumers make their money work more effectively for them, so they can build more effectively towards their goals or a comfortable retirement.
Of the Kiwis surveyed, only 6% said that their overall level of trust in financial organisations has risen in the past 12 months while 28% said their trust had fallen, with consumers mainly citing a general feeling that brands could do more to build a relationship with customers, and that they are more focused on profit maximisation than doing the right thing for consumers. If consumers are experiencing challenges like income reduction or pressures from increasing home loan repayments, high trust levels are required so that they feel comfortable reaching out to banks for help or support. What’s evident from our research is that while half of consumers feel comfortable reaching out to financial providers in times of trouble, this was lowest among the groups perhaps more likely to experience challenges.
It is important for organisations to be strong and profitable but in these times brands need to develop more positive stories to offset any negativity around profit announcements. Kantar’s work suggests two interlinked ways to do this – experience and engagement. Even though costs are clearly a focus for Kiwis at present, a quarter would accept slightly higher prices if they received great customer service.
Another of the challenges that brands are facing right now is getting the balance right between the speed and efficiency of digital self-service versus the relationship value that can be delivered by a human interaction. Even though Covid has led to an increase in digital service uptake, 80% of New Zealanders still think it’s important for banks to offer a face-to-face service option, and while the equivalent score for insurers is lower, it’s still a majority view at 59%.
Our research shows New Zealanders are starting to feel the impact of the rising cost of living. It tells us that delivering great customer experience and building engagement are important ways to solidify trust in brands, which in turn is key to supporting consumers to achieve financial freedom. However, not all Kiwis are the same and a simple age-based lens fails to pick up the nuance that exists. Our attitudinal-based segmentation demonstrates there are five main groups and each needs to be approached differently in terms of engagement and experience.
Kantar’s Finding Financial Freedom webinar showed the importance of trust, engagement, customer focus and pricing power. These interlinked areas are crucial enablers to help support customers to achieve financial freedom.