We’ve all been hearing – and perhaps experiencing – cost of living pressures lately. We’ve heard that skyrocketing rents have excluded lower income workers from a place to call home in all Australian capital cities. That middle-aged women are the fastest growing cohort to live in their cars. That some parents need to decide between feeding their children or heating their home. That others are taking on multiple jobs just to make ends meet. These are tragic and uncomfortable stories. They are stories that make us wonder what we can possibly do.
Here at Platform One, we started by undertaking research to understand with empathy, and identify some possible actions. We identified that 25% of the population are in trouble or struggling, and a further 60% are just getting by. We looked at strategies people use to cope with financial pressures, including budgeting for grocery shopping or driving their cars less. At how others have reduced spending on ‘nice to have’ items, or things that make them feel good and provide a sense of belonging and community, like socialising.
We soon found that while not all coping strategies are the same, there are some common psychological threads running through the cost-of-living crisis. People experiencing financial stress are likely to feel shame - believing they are the reason for their current situation, rather than broader social and economic factors.
It’s this reaction to shame and stress that produces a myriad of responses that impact decision-making processes, including a narrowing of temporal focus to more short-term thinking. Some people may turn to maladaptive approaches, including drugs and alcohol. Others may seek comfort in food – premium ice cream, or perhaps crumpets (loaded with butter and honey). Others might balance their spending to enable a blow out on Taylor Swift tickets, Oppenheimer at IMAX, lipstick, or small leather goods.
As businesses, we can help diffuse a sense of shame by approaching the cost-of-living crisis with empathy. We can do this by first understanding how keenly your customers are feeling the pinch, and how your products and services are interpreted and impacted by a financially-stressed mindset. Armed with this knowledge, you can tailor your communications and promotions to help, rather than shame your customers at a time where they may need empathy the most.
We’ve worked with businesses to understand how we might encourage people to implement grocery shopping advice, how we might provide low cost, comforting solutions, or the acceptability of budgeting advice to improve a financial position, rather than avoid facing into the situation.
We’re all impacted in one way or another by the cost-of-living crisis. Here at Platform One, we aim to be part of a solution rather than a source of shame, and are here to help businesses do the same.