The cost of living crisis: making consumer communications even more important.

By James Turner, Relationship Manager, Plain Numbers.

With very high inflation and many people struggling to meet the cost of living, it’s more important than ever that people feel able to make informed decisions with their money. Those decisions will now come with an extra layer of anxiety and stress for many who are trying to make ends meet.

A Plain Numbers Approach is vital for allowing consumers to make decisions that work best for them. The choices many people now face are reliant on understanding the numbers.

Trying to lower our household bills, switch to better value deals or make sure quotes are affordable comes with a lot of numbers. When they are communicated in a way that is difficult for customers to understand it becomes very difficult for consumers to cut back on their spending or make tough financial decisions.

Improving the way we communicate won’t bring the cost of energy down, but what it can do is help customers understand the numbers on their household bills so they can understand their options, make savings where possible and avoid decisions which may cause further financial harm.

Our trial research last year revealed an uncomfortable truth for firms across many sectors: that consumer comprehension is much lower than many firms assume. It also showed that people’s perceptions of their understanding do not match their actual understanding. It is these people who might be most vulnerable to making decisions which harm their financial interests.

For example, customers who might believe they have found a money saving offer for car insurance could later find they don’t have the right cover or that they are not getting the best value. Or those who take out credit thinking they understand the cost may be hit with profound difficulties when it comes to paying it back.  With people finding their finances more squeezed, most consumers can ill afford to lose out in these ways.

However, our research also proved it is possible to improve comprehension. The Plain Numbers approach doubled the number of people who understood the information.

Better understanding would surely help all customers, in particular those who are most vulnerable, to navigate the tough choices they may now face. Using a Plain Numbers Approach created the conditions for informed choice, and now those choices matter to households even more.

We’re working with several market leading firms to help consumers understand the numbers they need. We look forward to working with more firms so that more consumers can be helped to navigate difficult decisions.  

Whilst it won’t solve all of people’s financial worries, all firms can help their customers through difficult times by communicating their numbers clearly.