Our 2023 Gulf South Index report will be released in the next couple of weeks. Since we began our research in 2020, The Ehrhardt Group and Causeway Solutions have worked to make the GSI a resource for navigating uncertain times and understanding how and why customers, businesses and brands behave the way they do. Keep reading for a sneak peak of our findings, as well as a few more interesting bits of data.
2023 Sneak Peek: Have we hit economic rock bottom?
In the four years since the inception of the Gulf South Index, the financial landscape of the U.S. has changed. More people than ever are feeling the heat.
In 2020, 33% of Gulf South residents felt they were worse off financially than they were two years ago. In 2021, those numbers remained steady, but by 2023, we’ve jumped to 41% feeling worse off than they did two years ago. 19% of the Gulf South rated the economy one star this year- only 6% were willing to give it a top rating of 5 stars.
Although this is disheartening, it’s hardly surprising. Earlier this year, we reported on the greatly anticipated recession believed by many to occur within the year. Even as inflation cools, other roadblocks such as the U.S. debt ceiling limit and a stalling job market leave the situation just as uncertain.
The U.S.’s numbers also show record-low confidence. In February, Gallup reported half of U.S. respondents saying they were worse off than a year ago. Since beginning this survey in 1976, the Great Recession in 2008 is only other time the number has reached 50%.
Revenge & the Modern Consumer
For a while now, all of us at the Gulf South Index wondered if the steady stream of calls to boycott – or now “buycotts” responding to boycotts – various products that end up tied to a hot button public debate or issue really created the level of impact that citizens supporting a particular effort thought it would. Turns out the Harvard Business Review was thinking about the same thing.
Turns out “boycotts” and “buycotts” don’t get the results once thought.
In 2020, the food brand, Goya, found themselves the target of a social media campaign against their CEO’s politics – leading to the creation of the #BoycottGoya movement. Although the trend grew massively on Twitter and other social platforms, researchers found that Goya’s sales grew 22% in the two following weeks, mostly from those protesting the boycott. Their sales fluctuated up in down over the next nine weeks, but ultimately both the boycott and “buycott” movement were just a blip in Goya’s sales with no long-term impact.
Still, the Goya movement shows an interesting trend in consumer sentiment. If there is one word to describe the modern consumer, it’s angry. In the National Customer Rage Survey, 74% of consumers have reported having a problem with a company. According to The Wall Street Journal, this is the highest it’s been since the study began in 1976. In fact, it has doubled since then. Customer satisfaction rates are at their lowest at 73%. The American Customer Satisfaction Index also notes that although the pandemic exacerbated these numbers, customer satisfaction began declining in 2019. And more so than ever, customers are doing something about it.
Just like the #BoycottGoya movement, unhappy customers have raised the stakes – using social media and other platforms to exact revenge on companies they feel wronged them at increasing rates. Between 2020 and 2023, customers seeking revenge on a company, either online or in person, jumped from 3% to 9%. However, most complainers admit they rarely achieve success, usually just encountering more rage when their initial complaints are met by either radio silence or worse, an automated response.
None of this excuses bad customer relations, however. Brands risk losing customer loyalty if complaints aren’t heard or resolved. According to the Customer Rage Survey, businesses are at risk of losing a possible $494 billion due to bad customer handling – a number much more impactful than nine weeks of fluctuation.
Like everyone else in 2023, customers are anxious and worried about the world, and their purchases reflect that. Resonate reports the largest number of U.S. consumers are tepid in their purchasing habits right now.
A negative experience with a company might just be their final straw. This means more customers than ever sticking with names they already trust. For businesses and brands, the focus should be on making an effort to ensure the quality of not only the product or service, but the relationship with the customer as well.