Smart Promotions in a Cost-of-Living Crisis: What Customers Really Want—and What Actually Works

With inflation, rising mortgage rates, and climbing grocery bills, Australian households are feeling the pinch. In times like these, discretionary spending takes a hit, and customers become more intentional about where and how they spend their money.

For businesses, this presents a delicate challenge: how do you protect revenue while remaining sensitive to your customers’ financial stress?

At Growth Quarters, we believe a smart promotional strategy can do both—drive growth and deepen loyalty—when it’s built with value in mind.

🧠 Understanding the Customer Mindset in 2025

The cost-of-living crisis isn’t just changing what people buy—it’s changing why and how they buy:

• Value over indulgence: Consumers want to feel smart about their purchases. They’re not avoiding treats entirely—they’re looking for value-packed experiences.

• Brand switching is easy: Price-conscious shoppers will quickly swap loyalty for savings unless you give them a reason to stay.

• Small wins matter: An affordable luxury (like a discounted coffee or freebie) can go a long way in creating goodwill.

This is the time to build trust, not just move stock.

🚀 Promotions That Work in a Cost-Conscious Market

Here’s a breakdown of promotional strategies that perform well during a cost of living crisis—along with a real-world example from our client, Jack & Co, a growing convenience and food retailer.

1. Bundle Deals and Add-On Value Offers

Rather than discounting a core product, offer something with it that enhances perceived value.

Case in Point:

For Jack & Co, we ran a “Buy a coffee, get a sausage roll for $2” promotion. This simple add-on not only increased average transaction value but drove cross-category growth in both coffee and bakery—two of their high-margin lines.

2. Attracting New Customers Through First-Time Trial

Promotions like these aren’t just for existing customers—they’re a powerful gateway for new customers who may not have tried your products before. A low-risk, high-reward offer often provides the nudge people need to try something for the first time—and that’s the first step in building long-term loyalty.

Case in Point:

Many Jack & Co customers who redeemed the $2 sausage roll add-on were first-time buyers of bakery products—and many returned to purchase them again at full price later.

3. Coffee Loyalty Programs

Give customers a reason to return and engage regularly—without slashing prices across the board.

Case in Point:

We introduced a “Win a month’s free coffee” offer, unlocked after completing 10 stamps on a loyalty card. The result? A 12% increase in coffee sales and stronger repeat customer behaviour.

4. Create a Loyalty Ecosystem

Now more than ever, customers need a reason to choose you over the cheaper option down the road.

Case in Point:

We helped Jack & Co develop the Cracker Jack Club, a loyalty program with over 13,500 active members. Members enjoy: Free birthday coffee, fuel discounts, exclusive in-store offers on multipacks and bundles

This has built a sticky customer base, reinforced the brand’s value proposition, and allowed us to market directly to engaged users with cost-saving offers tailored to their habits.

💡 Our Tips for Running Promotions During a Cost-of-Living Crisis

Whether you’re in retail, food, or services, the principles are the same. Here’s how to do it right:

✅ 1. Focus on Value, Not Just Price

Offer real benefits. A freebie or reward that feels like a bonus—especially something they were likely to buy anyway—is better than a blanket discount.

✅ 2. Build in a Loyalty Hook

Use the moment to start a relationship, not just make a sale. Promotions that lead to email sign-ups or loyalty memberships have long-term value.

✅ 3. Make It Easy for First-Timers to Say Yes

Position your promotion as a “no-brainer” for new customers. Low-cost or free introductory offers can dramatically reduce the barrier to trial—especially effective when backed by excellent product quality.

✅ 4. Keep Messaging Empathetic

Your copy matters. A message like “Helping you stretch your dollar further or More Bang For Your Buck” feels more respectful than “Massive discounts now!”

✅ 5. Test, Measure, Repeat

Don’t guess what works. A/B test offer types, durations, and creative. Track redemptions, basket size, and repeat visits to know what’s really driving ROI.

🔑 The Bottom Line

In a cost-of-living crisis, the businesses that thrive are those that balance strategy with sincerity. Promotions shouldn't be panic responses—they should be smart tools to build brand resilience, attract new customers, and deepen trust with your loyal base.

At Growth Quarters, we help brands craft data-driven, empathy-led promotions that don’t just survive tough times—they stand out in them.

Want to talk about your next promotion?

Get in touch to workshop ideas, run the numbers, and build a promotion that pays off.