Leveraging User Insights: How Hong Kong Marketers Can Combat The Economic Slowdown (Part 1)

Following weeks of widespread protests, many Hong Kong businesses have noticed a significant slowdown. Cathay Pacific has reported a decline in forward bookings for travel to Hong Kong “in the region of double digits” and Hong Kong’s Financial Secretary Paul Chan Mo-po is indicating that the city may slide into a recession

A recession can be a difficult time for marketers as budgets get axed while pressure to deliver intensifies. This article is the first in a series of three that will outline which digital marketing tactics Hong Kong marketers can leverage to combat the crisis. 

How Consumer Behaviour Changes During a Recession

It is important to recognise that not all consumers respond to an economic slowdown in the same way. Ian Chaston, author of the bestseller “Entrepreneurship and Innovation During Austerity: Surviving Beyond the Great Recession” provides a useful framework to segment customers based on their likely response to a recession:

  • Slam-on-the-brakes consumers: financially vulnerable customers who will minimise their spending in the face of a slowdown. Typically these are lower income groups, but anxious middle class customers may also fall into this category. 
  • Pained-but-patient consumers: Their behaviour is similar to the first category, but the measures they take are less extreme. They tend to be slightly more optimistic and will reduce their spending but are less willing to sacrifice on their standard of living.  According to Chaston they typically “constitute the largest segment and include the great majority of households unscathed by unemployment, representing a wide range of income levels.”
  • Well-off consumers: For this cohort consumption patterns do not change much during a recession. Typically these are demographics with a higher income, or those with a high level of financial stability (i.e. government employees, corporate employees or retirees). Unless a recession is very severe and/ or prolonged it is unlikely that they will curb their spending. 
  • Live-for-today consumers: The spending patterns of these consumers does not change much either, however the reason therefore is not their financial independence, but rather a lacking sense of urgency. Oftentimes these are younger individuals, potentially still living with their parents. According to Chaston they respond to an economic slowdown by “extending their timetables for making major purchases. […] They’re unlikely to change their consumption behavior unless they become unemployed.”

How to Leverage Google Analytics to Segment Your Customers?

As a brand marketer you can analyse customer data to better understand and ideally segment your customers and to learn how Hong Kong’s slowdown has impacted their spending pattern. Specifically you can:

How to Evaluate if Consumers are Delaying Purchases 

Leverage the Google Analytics ‘Time Lag Report’ (under Conversions > Multi-Channel Funnels > Time Lag) to compare if the time between a consumer’s first interaction with your website and their purchase has increased over time. According to Google Analytics’ documentation the “Time Lag reports show how much time (in days) elapsed between a user’s first exposure (click or impression) and their subsequent conversion. ” Thus the Time Lag Report will essentially tell if consumers have become less likely to pull the trigger. If time to purchase has changed over the last few months, then a change in Hong Kong’s economic climate could be a reason for that. However, please note that seasonality, discounts, new product launches, etc. may also be factors contributing to this. The image below shows the June and July time lag report of a Hong Kong e-commerce brand. As one can see, for this particular brand, the share of consumers making a purchase within the first three days of their initial interaction has dropped from 83.19% to 76.93%, which is quite substantial. Note that if you are not yet running an e-commerce enabled website, you can use the same logic to segment your users based on Google Analytics “goals” that you have defined for your business.  


How to Leverage Google Analytics to Segment Your Consumers based on Demographics 

You can also use Google Analytics to segment your data by age and/or gender. If, for instance, you want to know if women in between 18-24 years of age are converting at a lower rate than they used to do two months ago, demographic segmentation will provide the answer. You can also take it one step further and assess if the behaviour of certain customer segments has changed relatively more or less, compared to other segments. i.e. “Has the decline of purchases made by women in between 18-24 years of age been relatively more significant than the decline of purchases made by men within the same age group?”. This will help you classify your customers based on the categories introduced above. 

To apply demographic segments in Google Analytics navigate to Conversions > E-commerce > Overview 

The screenshot below shows this. Again, if you are not yet running an e-commerce enabled website the same applies to Google Analytics Goals.


Pro Tip: How to Segment Out Your Wealthiest Customers 

To understand how the behaviour of wealthier consumers differs from that of less wealthy consumers we at First Page often use mobile phone brand to segment user data. As iPhones are more expensive than many other devices, iPhone ownership is a meaningful proxy for wealth. This doesn’t mean that everyone who owns an iPhone is better off, but statistically speaking, chances are that someone who owns an iPhone has a higher income than someone who does not own an iPhone.

Recap: Brands that Win during a Slowdown Leverage their Customer Insights More Effectively

Being able to draw precise and accurate conclusions from data is a critical factor to navigating a recession successfully. This article has introduced two simple techniques that are available to any marketer who has access to web analytics. More sophisticated brands with comprehensive CRM platforms and loyalty programmes can apply additional analysis, such as cohort analysis, to further enhance the quality of their decision making. In the next article of this series (to be released next week) we will explain how brand marketers can leverage data to inform their creative directions to run effective campaigns that are relevant to Hong Kong consumers on a tighter budget.


photo credit: featured image by mariusz kluzniak