Helping Customers Navigate Competing Priorities Post-COVID
This fall, Symend released its post-COVID report revealing the underlying perceptions and attitudes behind changing behavior, and the impact on engagement and repayment patterns.
This blog post will explore how consumers are prioritizing their spending and bill payments post-COVID. Additionally, the full report uncovers how consumer expectations and digital fatigue have evolved post-COVID. Read the summary on our blog here.
In addition to the insights and key findings from this in-depth research, you will find recommendations from Symend’s PhD behavioral scientists and industry experts. Read the report to better understand and adapt to the unique and changing needs of your customers as they adjust to a new normal.
Spending priorities have evolved and vary based on income and savings
Consumer spending priorities are more contextual than ever and vary significantly based on the consumer’s income and savings balance.
What is influencing consumer spending priorities
Consumers are returning to pre-pandemic spending behavior according to the Q4 2020 Equifax Credit Trends report, which notes that younger consumers are taking on more debt.
- RBC Economics noted that overall spending increased by 18% in Canada as of Q2 2021
- Opportunity Insights Economic Tracker noted that overall spending had increased by 9.6% in the United States compared to January 2020
- 34% are working at a lower pay than they were before the pandemic
Top 5 spending priorities across all respondents, regardless of income or savings balance:
- Fixed expenses (mortgage/rent, utilities, insurance)
- Payment toward credit card
- Cable/streaming services
The study revealed that consumers are demonstrating caution when planning for the future, with consumers indicating savings as a top priority over the next 6 months, even above some of their bills. It is critical to understand how your customers’ spending priorities have changed post-COVID in order to tailor offerings and messaging towards this changing behavior.
Top spending priorities based on income
While fixed expenses remain a top priority, there are signs of post-pandemic spending behavior in the priorities indicated by Symend’s survey respondents:
- Low-to-middle income respondents are prioritizing bill payments and savings
- High-income respondents are prioritizing spending on higher ticket items, such as travel and entertainment, with a significant focus on home improvements
Post-COVID consumers are prioritizing savings over bill payments. It is crucial to gain a better understanding of your customers and their spending priorities in order to address these changes. Read the report to see the top spending priorities for the next six months by income.
Top spending priorities based on savings balance
The pandemic resulted in a split impact on consumer savings post-COVID. Symend’s survey indicates that 32% have more savings than at the start of the pandemic, 29% have less. This supports the notion of an uneven recovery.
The amount of savings reported by respondents appears to significantly influence their selection of spending priorities:
- Bill payments are the primary focus for those with less savings than before the pandemic
- Signs of revenge spending are more likely to be seen among those with the same savings balance as before the pandemic
- Prioritizing higher ticket items are a priority for those with more savings than before the pandemic, which could also be a sign of revenge spending
Read the report to see the top spending priorities for the next six months by savings balance, and for recommendations on how to help your customers navigate the future post-COVID.
Consumers are prioritizing bills to make ends meet
In 2021, overdue payments declined in most consumer debt markets. This has been due to:
- Social policy responses
- Fiscal relief in the form of direct income
These factors made it easier for consumers to make payments. In the absence of government support and payment extensions post-COVID, many consumers will need to re-evaluate the way they prioritize bills, and look to alternative strategies. The financial wellness of consumers post-COVID is uncertain for those struggling as payment accommodations become unavailable. It is up to you to bridge the gap for those who are struggling to make payments, which will set you and your customers up for success long-term.
The rise of credit cards
In the absence of payment accommodations, it is expected that consumers will use a variety of payment strategies to make ends meet and that balances will spike as payment assistance is reduced.
- 57% indicate that they plan to use their credit card to manage their financial obligations.
Symend expects that a significant driver behind increased credit card usage is the need to delay cancellations and suspensions of other bills, such as utilities and telecommunications. The post-COVID report provides recommendations on how you can support your customers proactively, before balances become unmanageable.
Flexible payment solutions as a bridge to a new normal
Lower incomes, increased unemployment rates and a lack of government support post-COVID has put many consumers in difficult situations. You have the opportunity to support your customers as a bridge to their new normal by providing flexible payment options. Our survey demonstrates why it is so important for service providers to offer payment arrangements:
- 40% of respondents consider payment arrangements to be a must-have tool
- 4 in 10 customers indicated that they are likely to leave their provider if they do not offer the digital tools they expect
Find out what tools your customers expect by reading the post-COVID report. A deeper understanding of consumer needs is the first step to meeting your customer’s expectations.
Providing consumers with the information and flexibility they need
Take proactive measures to reduce the impact of these changing spending trends for both you and your customer by:
- Offering flexible payment solutions
- Increasing awareness of additional support programs
- Providing clear and timely information about alternative solutions
If your customers are aware of their options and feel equipped with insights or tips on how to stay caught up, they are more likely to feel that you support them and have their best interests in mind.
About the Post-COVID Report
Throughout the pandemic, Symend conducted multiple surveys to monitor changing perceptions and attitudes of consumers. Symend has also kept a pulse on market research and insights around what to expect post-COVID. These findings were used to shape the research objectives for Symend’s post-COVID survey which was conducted in July 2021 with 2,000 consumers across the United States and Canada, all of whom have primary or shared responsibility for household bills. The report was also shaped by Symend’s insights from engaging and treating millions of customers, survey and web testing data from Symend’s Engagement Science Lab. The findings were focused on the implications for service providers in telecommunications, financial services and utilities.
Are you ready to gain a deeper understanding of your customer’s changing attitudes and perceptions post-COVID? Download the report for more insights from our survey.