Wednesday, December 10, 2008
Right now, the economy appears to be pretty much a train wreck, and people are having a difficult time looking away.
It is, perhaps rightfully, the focus of conversation, the headline in nearly every section of the newspaper, and the lead story on virtually all news channels and programs. But in accepting (finally) that a recession is underway, and now attempting to project its severity and length, many politicians, economists and other pundits are cautioning that at least some of the economic bad news could be called “a self-fulfilling prophecy.” (As an example, see this story from the New York Times, 12/8/08.)
Implications: It is good to be informed. But even things that are good for you can be toxic when consumed in ridiculous quantities.
There will be a time—it could be next month, next week, or this afternoon—when consumers say, “Enough already… I need a little good news.” The question is whether you, or your product, service or company… is in a position to be that bearer of good tidings. Does your service relieve stress? Does your product provide comfort? Does your organization exude a sense of optimism?
At some point, people (and companies) will drive just beyond incident on the highway they have slowed down to see. Something inside them will say, “That was a distraction, but I have to put that behind me because I have somewhere I have to be. And the only way I’m going to get there is if I look forward, keep my eyes on the road… and drive.”
Almost overnight, the focal point of the conversation went from “financial crisis” to “out of touch.” And it made the three instant celebrities on a wide variety of blogs… including the Huffington Post.
People wanted to know whether the leadership of these companies really had a grip on the situation. All kinds of questions were flying around: Why should major corporations get billions in aid when families are scraping by? Wouldn’t it have been a nice gesture of their own fiscal restraint if they would have flown commercial (coach) like the rest of us, or even driven one of their own cars?
Implications: My intent is not to write about whether the big three should get aid. Sometime very soon, they probably will… and they probably should, for reasons I won’t go into here. The greater issue behind this story—the one you can use—is the reminder that a company (or its people) cannot simply Talk the Talk. They must Walk the Walk.
If you are asking employees to participate in cost reductions (cutbacks, layoffs, reduction in resources, or other attempts to increase output-per-person), has your leadership demonstrated its willingness to lead by example and share that burden? If you are asking the customer to accept a surcharge, or reduced hours or services, have you also explained steps the company will take to mitigate their inconvenience, and that you’ll return to “normal operations” as soon as possible?
That chief executives have been asking for help during this downturn is not the big story. That they initially expected that sacrifice to be one-sided is what turned into a public relations nightmare. In what ways can your company—or your department—avoid making that same mistake?
Tuesday, November 18, 2008
In a Wall Street Journal story last week (Banks Wage Rate War for Deposits, 11/14/08)—and in other trade coverage—we started to see evidence that banks were going after consumers’ savings and other deposits. The move makes a lot of sense, both because consumers’ are increasing resisting the temptation of indulging on purchasing (instead putting a few more dollars away, just in case), and because other sources of funding for financial institutions (such as interbank lending) remain somewhat stalled.
Another trend in the financial sector: Selling consumers on the idea that banking is still a good idea. In one example, Miami-based TotalBank is telling customers they can be confident in their local, community bank (see the Marketing Daily story from Monday 11/17/08).
Implications: Banking is one example of an industry that is deeply affected by the current economic climate, and I would argue that it is a matter of both cause and effect. The sector, in general, is arguably among the causes of the sub-prime and credit crisis… but it is also affected by that crisis. (Granted, there are innocent bystanders/institutions within the sector. But banking, overall, is facing some particularly delicate challenges where consumer opinion is concerned.) Consumers are asking: Is my bank safe? Is my bank trustworthy? Where should I put my money, in a world that has not been kind to my IRA, 401(k), or other investments?
Another shift that’s starting to surface: The tendency for people to exercise caution in spending, live within their means, and think about what they’ll do with the money they’re saving as a result.
Sun Trust started a new campaign, recently, focused on a return to responsibility… for consumers. Recognizing that people would increasingly prefer to be envied for spending wisely—rather than spending freely—the bank encourages people to “bank solid, with a solid bank.” (See details in a Marketing Daily story 11/18/08.)
Even if you’re not in the banking business, it might be smart to get into the business of rebuilding consumer confidence. And not just that people can be confident in your business… but also, helping consumers feel confident in themselves. Can you position your product or service as a more prudent alternative, compared to _________? Does your product or service offer attributes such as reliability, a warranty, or other security measures? Could your company offerings be seen as a long-term investment, as opposed to a short-term fix? These are comforting elements to a consumer who could use the assurance.
Saturday, November 1, 2008
Now, while the idea of wine in cans might be new to some, it has been done before (at least once, that we know of). Several years ago, the Niebaum-Coppola winery in California began marketing a sparkling wine called Sophia (named for the daughter of Francis Ford Coppola). See a 2004 MSNBC story on the product here.)
Implications: Granted, wine in cans isn't exactly commonplace. But the first several airplanes invented didn’t fly all that well, either.
If the packaging is proven to preserve the characteristics and flavor of the product inside, then why shouldn’t wine be offered in boxes, cans or cartons… if they meet the convenience and cost requirements of the consumer. Beer is sold in plastic bottles now, after all. Some wine snobs might think of the can as sacrilege, but if the masses embrace the beverage, who cares?
If you’d have told people in the 1920’s that someday, people would be served their dinner from a window in a driveway… they’d have scoffed. Has your company historically set-aside packaging options… whose time might now be right? Just because a package design (or marketing strategy) has not succeeded the first time out doesn’t mean the concept should be totally discarded. Perhaps it’s just that the consumer will accept no package design… before its’ time.
Redeployment. The survivors of layoffs can often suffer dramatic increases in workload after their company has been “right-sized.” To make things worse, these folks often suffer from a form of Survivor’s Guilt.
Over-employment. Often, companies will reduce the hours of workers, in the hopes of avoiding (or reducing) the need for actual layoffs. Many people who’ve been cut from fulltime to part-time will seek additional part-time jobs, so as to maintain their income (lifestyle) until the world gets “back to normal.”
Hedgework. When people engage in a second job… in anticipation of future layoffs or job reductions.
Day-lighting. This is something like moonlighting, except that technology allows people to handle two jobs from one chair, “toggling back and forth” from one position to another. Read more about this observation in the most recent issue of the Iconoculture newsletter.
Implications: For years, marketers have coveted the cherished “two-income household,” assuming the target represented affluence. In the near term, you might consider adjusting your aim… to reach two-income people.
In an already time-sensitive household, can you imagine how busy these folks are? Do your products or services offer the promise of time savings that over-employed people might appreciate? And to address the obvious (but often un-noticed), is your company recruiting right now? There might be bargains out there, in terms of talent.
Wednesday, October 29, 2008
Now, I’ve never considered myself a futurist. But I am an optimist… and I do think there are a number of reasons to have hope over the next few months. And yes, I realize that this list is composed of largely emotional attributes/events.
This is the week before the election, and there’s all kinds of bickering going on between politicians. It’s easy to get bummed out with so much trash talk flying around.
The election is next week. Setting aside political preferences, one thing is certain: Next week is the beginning of a beginning, with a new administration. There should be a sense of “clean slate.”
The holidays are coming. People seem to have accepted that gift-related spending will be lean. (That is bad news that’s already been reported.)
Energy prices have fallen. At least in the short term, that’s some good news for consumers. And while it won’t likely been seen in price reductions at grocery or other retail, lower gas prices help people manage cost increases in other areas of their life. (Nothing like the threat of a global recession to humble an oil baron.)
A realtor in the Midwest tells me that people are coming back to the housing market again (unable to avoid the bargains that are out there).
The New Year is just over sixty days away. That provides another “fresh start” frame of mind.
Even if there is more grim economic news, the shock value of bad news is beginning to wear off. We have been hearing that the sky is falling for most of 2008—and if you’re a hedge fund manager, perhaps it has fallen. But most people will realize they can adapt, survive, and hopefully even thrive over the long haul.
Implications: Things have been stirred up for a while now… and the water is murky. But soon, people will be yearning for a little good news. Can you provide that hope? Is yours a product or service that will benefit from the concept of “pent-up demand,” once the headlines contain hope? Perhaps “when consumers are spending again,” they won’t be spending as much as they did in the heyday of the post-2002 recession. But spend, eventually, they will.
If you’ve been part of the workforce for more than a few years, you know one thing about bad news and recessions: None of them is permanent. While it’s important to pay attention to business conditions, adjusting expenditures accordingly, it is also important to beware of the early signs of a turnaround. Timing is everything. Being late with a response to recessionary economics can be very costly for a company; but so can it be expensive to recognize too late that a recovery is at hand.
I make that statement not as a prediction… but as a precaution.
You know, it’s funny. I was just about to click “save” on this article… and I got another email alert from the NY Times. The up-and-down stock market is up again, by more than 900 points. Even the speculators are getting tired of it all.
Monday, October 20, 2008
Even if you haven’t been a casualty of the recent credit melt-down, you are almost certainly aware of it, and know someone who is affected. For the past several years, a lot of people have over-indulged in signature loans, interest-only mortgages, or too many of the dozens of credit card offers received in the mail every month. Well now, with the (balloon) payment coming due, consumers are highly likely to re-think their use of credit.
Consumers—not to mention an entire global economy—have been shaken by the cost of the buy-now-pay-later philosophy, and the tightening of the entire credit system. For some, it will take years to dig their way out of debt. For others, resolution will come more quickly, but at the expense of foreclosure, repossession or bankruptcy, actions which will leave their mark on a credit history for some time to come.
Implications: If you sell durable goods or high-end products (either as a manufacturer, distributor or retailer), you may have profited from helping consumers arrange financing for the purchase of your products. In what ways can you continue to present financing options to qualified consumers (probably not everyone), in a way that they regain comfort with the idea of owning now, and paying later? Or, just as the consumer has been given incentives to use credit (“Open an [XYZ] account and get 15% off today’s purchase”), can you profit from giving customers some form of discount or value-added premium for paying with cash?
Many consumers are finding favor with the idea of paying down debt… and returning to a mentality of “saving up” for major purchases. Have you thought about how you’ll survive and thrive among those spenders?
She brought a piece of direct mail advertising down to my office the other day, and I was glad to indulge her protest of the campaign’s strategy. The piece was from a health and fitness club. The offer on the front page invited new members to join for just a $19 enrollment fee, and added—in very small print—the phrase, “Details inside.” On the pamphlet’s interior, in even smaller print, the offer was amended to say, “…plus a one-time administrative fee of $75.”
Like my wife, you might be interested in knowing the difference between an enrollment fee ($19) and an administrative fee ($75). She called the number in the brochure, and was basically told that the administrative fee was designed to cover the cost of administering the enrollment. (What!?) Asking for a more specific explanation, the club’s (frustrated) representative finally said, “That helps us cover the costs involved in soliciting new members.”
My wife’s response? “Why should I fund your new membership drive!? And anyway, why wouldn’t you just say… Enrollment fee: $94? It’s not like people wouldn’t figure it out, eventually, anyway!”
Implications: The consumer is living in a world where things—even long-held assumptions about well-known companies—are not always what they seem (e.g., the stock market, the investment bank, real estate appreciation). They’re more likely to consider the downside of a purchase, and they’re more careful to read the fine print.
Are your products, services, and campaign materials designed to survive… in a world of increasingly suspicious consumers? Does your company make an offer to the consumer (in entirety or in part) that it is not proud of? Is it possible that as soon as your consumers see fine print, they might think you’re trying to hide something?
What would happen if you took the small print on the back of the package… and put it in bold on the front? Would your consumer take you off their consideration list? Or might they appreciate your candor?
Monday, October 6, 2008
I was reminded of the article recently, when I heard a news story about a local retailer who was selling household safes in record numbers.
Think about that.
The economy is utterly unstable right now, people are worried about their jobs and paychecks, and consumers are cutting back in virtually every retail category. But they’re buying “safes” like they’re going out of style.
Implications: I’m left with a lot of questions on this one. Are people nervous about having all their money in a bank or credit union, despite assurances about how their money is protected from the FDIC or NCUA?
Are people giving “second thoughts” to the jewelry they have in the house, with the recent increase in value of gold and other precious metals? Do people expect an increase in crime, as is often a by-product of an economic downturn? I’d love to be able to say for sure. But as I often say, the best researchers or trend watchers are not always those people who have all the right answers, but rather, they are the people who ask all the right questions.
Even if you do not sell lock-boxes or other security devices… what do you sell, that is, “safe?” Do you have customers that can vouch for your quality, value or reliability? (Don’t be surprised if customers trust the word of other customers more than the stamp of approval offered by some regulatory source.) Do you help your customers network with each other via your web site or a social network? Which regulatory bodies do you depend on for approvals or opinions… which some of your customers may no longer assume to be trustworthy? What alternate forms of assurance can you provide, for customers whose confidence might be shaken?
Saturday, October 4, 2008
Likewise, if a recession is going on all around you, but you still feel secure in your job, earning a comfortable household income, and you’ve kept your car payment, mortgage and credit card debt at manageable levels: Are you still having a recession?
Within every trend, there are counter trends. And just as there are folks out there who are feeling the economic pinch right now, there are folks who are doing just fine, thank you. In fact, they might be somewhat better than fine, because of the “sale” signs on the door of almost every retailer, car dealer or housing development. If you’ve got a little extra cash and less debt than most, it’s a great time to be you!
We try to measure economics in regional terms, national terms, or even global terms. But if you’re in business, the economy can change from one prospect to the next, depending on their needs, level of interest, and whether or not they’ve been conservative about their spending over the past five or ten years.
A recent quip in the Iconoculture newsletter put it this way: “A recession is when your neighbor loses their job. A depression is when you lose yours.” When people think about “the economy,” they consider it from the perspective of their own personal balance sheet. With that in mind, consider the number of people who are not in foreclosure, not unemployed, and not afraid to spend.
Implications: If you sell vehicles, housing, appliances or other big-ticket items, it is particularly important for you to realize that the person you’re selling to today might not be the same target consumer you had five years ago (or last year, or last month). Further, the people who buy from you today might buy for different reasons than they did five years ago (or last year, or last month).
This is the answer I have given, every time: It doesn’t matter. As far as I’m concerned, the technical state of recession is of little significance unless you are a television anchor, a financial analyst, or a political pundit. Whether the Conference Board, the Fed, or anyone else thinks we’re in a recession is of little direct consequence; it's what your customers think that matters.
Nielsen recently published a report about consumer attitudes toward recession. It is a global report (not just U.S.) which found—among other things—that 80% of people in North America think that we’re either in or entering a recession. (By the way, the research was conducted in April, 2008.) At that time, the pundits would have told you that we were technically not in a recession. (They’d say we’re not right now, for that matter. But obviously, the pundits and I are not on the same page.)
Folks, if 80% of your customers think you’re in a recession, you’re in one. That having been said, here’s the good news: Perhaps we can stop focusing on the recession, and start focusing on the recovery.
Implications: Even though a “culture of recession” exists in many sectors, the spending isn’t ending; it will simply be changing, in response to changing consumer needs and priorities. If you’re a restaurateur, worried that people will be dining out less, what can you do to earn the dollars they’ll still spend? If you sell appliances or dining room furniture, how can your goods “upgrade the experience,” for a family that finds itself dining at home more often? Perhaps the smart money right now is on some good old-fashioned customer research, so that you’re sure you know what priorities your customers (and prospects) have right now. Are they looking for simply a lower price? Or might they be interpreting “value” as longer-lasting quality? Have the experiential benefits of the product you sell become more important?
A recent Marketing Daily article offered this ironic look at purchasing priorities: Over the past few months, as the economy has tightened, sales of health care and food have fallen, while sales of big screen TVs have grown. Perhaps the consumer rationalizes the plasma TV purchase as a way of avoiding frequent (and potentially expensive) “nights out” on the town. So the big-screen TV maker isn’t just competing with other companies who make the same thing. The manufacturer is now competing with the movie theatre, the nightclub owner, the theme park operator.
Get the picture?
Wednesday, September 10, 2008
Another marketing publication, Media Post Marketing Daily, quoted Peter Meyers, ICOM's marketing VP, as suggesting that the reason older consumers might be more inclined to purchase “green” products “…is that they are spending more time in the store, looking at packaging and reading product claims. They know what they're buying."
So what happened to the idea that environmentalism was a youth movement? One possible explanation, Meyers says, is that, “Gen Y is simply becoming more cynical, and is more likely to not believe a marketer's claims.” He adds, “Of those who don't buy green, 50% say it's because these products are too expensive, while 17%--giving the next most common reason--say "I do not believe that they are that much better for the environment."
Implications: Are you catering to an older population that has the time to concern themselves with your Green offereings? Can you substantiate HOW your products, services, or company are good for the environment (or are you just issuing shallow claims that Gen Ys, among others, see right through)? In this economy, has price overtaken the planet, in terms of purchasing priorities?
Tuesday, September 2, 2008
Reserve Brands is doing the same with Eagle Snacks (once owned by Anheuser-Busch, and named for the eagle in the A-B logo).
You’ll be able to wash it all down with another famous reprise: Schlitz Beer.
In an age when branding has become a very expensive proposition, some companies are eager to revive existing brands that are not so much dead as they are “comatose.” Aging boomers are often the target, as these icons conjure images of happiness and youth.
Implications: Does your company have a brand that could be dusted off for future use? Or, if your competitor has such a famous name waiting in the wings, how would you defend against a revival? Are there attributes within your existing products which have roots in a more heritage name plate… and if so, how could you exploit that bygone fame?
“If they’re saving overhead by not having to pay cashiers, they should give us an extra discount for going through this line and doing all the work by ourselves,” said one customer. “Or, they could use the money they saved on cashiers to hire more people to help in other areas of the store,” added another.
Think about this. I was standing in line, waiting for a chance to trade my money for this company’s products and services… and the customers behind me start a miniature rebellion, just before the point of transaction. It got me thinking: What if your customers started talking with each other?
They are. And they’re doing it publicly. Speaking with several retail and service company clients over the past few months, I’ve noticed an emerging theme. Online communities, chat rooms and social networks have given people a place to start spouting off. Frustrations which once had no forum now have a seemingly endless list of web addresses where they can be vented, virtually. And the ease with which customers can offer criticism online has emboldened them: People seem more likely to voice their opinion… on-location.
Implications: Your company might not have more critics today than it did a few years ago… but the critics you do have are much better equipped to start a word-of-mouth campaign. If they cannot talk to you about their frustrations, don’t be surprised if they start talking to everyone else. Entire chat rooms and Facebook groups are dedicated people who are angry about something. And that frustration could begin spilling into your store or showroom.
Do you employ customer service reps (or other problem solvers) whose job is to correct any difficulty a customer has with your company, product or service? Would giving your clients greater (or more convenient access) to these resources help mitigate their frustration, and therefore minimize their viral effect? Do your company’s advertising and marketing materials clearly communicate WHY your company has made a change (i.e., “self-service checkouts help us keep our prices lower,” or, “self check-out means less time standing in line”). And remember that word-of-mouth can work both ways: You might want to create a way for your raving fans to join voices, if you haven’t done so already. (Feedback form at your web site? Facebook page? Online comment cards?)
What happened next is telling: Enough readers provided counter-point commentary that the author ran a counter-point story (NY Times, August 28, 2008).
Issues which collude against the idea of “automatic payments” include errors from the bank, over-charges from various service providers, and the idea that ending or altering such a relationship can be very difficult. (Consumers know starting an automated payment plan is easier than ending one; these days, they’re more likely to think about an exit strategy before entering into such a plan.)
Implications: It’s easy to see why any purveyor of products or services might want to get customers into an automated relationship. It makes the business very “sticky,” and reduces costs related to customer service. But now that consumers are a bit more experienced with these types of transactions, it might be a little more difficult to sell them on the idea. A “What’s in it for me?” mentality is beginning to prevail; and if they don’t see a benefit to opting in (greater than the avoidance of check writing), you might find it more likely that they’ll be opting-out.
Monday, August 11, 2008
Our dialogue was stimulating, and had to do with the fact that immigrants to the U.S. are not only changed for having come here. Existing residents are changed as a result of having come into contact with their new neighbors.
I was reminded of this conversation when I read a recent story about the influence of “second generations” on the cultural (and culinary) landscape of America. The article, published by Media Post Marketing Daily, suggests that a second generation of immigrants will enjoy foods that not just native to their homeland or their new home… but a hybrid of tastes somewhere between the two. The piece cited a recent trend mapping report, published by the Center for Culinary Development.
Implications: A lot of companies are fixated on serving a wide variety consumers who have recently arrived in the United States from other parts of the world… including Hispanics of diverse origin, Asian, and Eastern Bloc Europeans. But in addition to serving these constituencies of immigrants… are you anticipating how to best serve their offspring? And have you considered how the culinary tastes, style preferences and product choices of your “traditional” American consumer might be impacted… as a result of what they’ve learned from the new neighbors down the street?
Get ready. Because “serving the global community” means more than responding to the preference of recent immigrants. It means recognizing changes which have occurred within “traditional consumers” as a result of having met some very interesting and worldly new friends!
Sunday, July 20, 2008
According to a recent story in the New York Times, as many as 79% of U.S. college students live off-campus. With gasoline at or over $4 per gallon, economics is the driving force behind a jump in the number of students who are seeking to make their college education more cost-efficient.
Implications: Think of education as a product that is bought and sold, like any other. (Including the products sold by your company!) In what ways might people choose to make their use of your products more cost-efficient? If you produce a packaged food product, are they making fewer and larger grocery shopping excursions (reducing the number of miles driven back-and-forth to the store, but increasing the quantity of items purchase with each trip)? If you sell a complex product—say, appliances or automobiles—might your consumer be doing more research online, rather than going to the driving expense of traditional comparison shopping? In what way should you alter the design of your web site—or the way your product is displayed in-store—in response to these behavioral changes?
Tuesday, July 1, 2008
Implications: Do you offer all of the most typical products and/or services in your category? Do you offer anything that is not typical of other companies in your category? Does it matter that you offer the best products/services in that category, if people are fed-up with the category, overall?
Is your category at risk of being “fired” by the consumer entirely? (If you fly, think travel agents. If you have a bank account, think Prosper.com. If you’re a former Blockbuster customer, think Netflix.)
If your category is broken… is your company (or department) small enough to fix it? Or will you wait for consumers to fix it for you?
Early online activism can be evidence that dominating in a category can be irrelevant… if that category has failed to remain relevant. Little web sites great places for grassroots ideas to spawn, if you’re a consumer. If you’re a company, they’re great places to identify consumer needs that you may not have discovered yet the big, old-fashioned way.
Political preferences aside, a recent study indicates that the best way to wrestle influence away from PAC funds, lobbyists and special interests… is to put your money where your mouth is. Voters have contributed small amounts in large quantities during the recently passed primary season, and that generosity shows little sign of ending as we head into the general election.
But this isn’t just about cash. The BYU/Harris Poll report, published by the Center for Media Research, indicates that people who make small contributions to political candidates are more likely to be suspicious of candidates who accept large contributions from the usual sources.
Legislators have long tried to reform how politics is run in the U.S., but with little to show for that effort. (Not a terribly big surprise; those who were elected by a system are probably not the most eager folks to change it… and I mean that in the most politically neutral way.) But it appears the American voter might be more likely to take matters into their own hands… at the ATM, as well as at the ballot box.
Implications: It only makes sense that people are more likely to be passionate about a candidate if they have gone so far as to contribute to the campaign. But it seems that even non-contributors are at least slightly more inclined to think favorably of candidates who have declined funding from traditional PACs, lobbyists, corporations, etc. My point here is not focused on either candidate. My focus is purely on this shift in “where political funding comes from.” The big companies, lobbyists and PACs have to be asking whether…
Perhaps small is the new big.
Where I live, we saw Gen X put their fingerprint on politics in 1998 with the election of an anti-candidate by the name of Jesse Ventura. Having seen the race first-hand, I don’t think Ventura proved himself to be the best candidate a decade ago; he proved himself to be the least candidate-like of the other options. His performance as Governor of Minnesota aside, one important accomplishment of Ventura was to bring lots of people to the voting booth for the first time. In this election, who are the people voting—and contributing—for the first time? Why do you think that is happening?
Monday, June 30, 2008
Recently, in an effort to reduce transportation and refrigeration costs, Wal-Mart and Costco embraced a new style of milk carton. The jug is square… which allows more of the product to be shipped and stored with less energy. (There was wasteful “air space” taken-up by the previous bottle design, because of the neck of the old-fashioned milk jug.)
How have the new cartons been received by consumers? There have been mixed reactions, according to this recent story in the New York Times. Some find them to spill too easily. But much of the push-back was calmed, when consumers began to understand why the change was necessary.
Implications: Now, more than ever, change is inevitable. The cost of energy (and other raw materials) will impose the need for changes in product and packaging design in the very foreseeable future. The NY Times story cited above leaves us with some key questions:
Has your company considered every option (like the very carton) when looking for ways to reduce the carbon footprint or energy efficiency of your products?
Will your customers be ready to accept the changes you’re contemplating?
What can you do to mitigate, rather than aggravate, the frustration that consumers might feel as they adapt to changes in products, packaging and/or prices?
Could a solid education, public relations, or marketing campaign help people realize that the change demonstrates your response to an important issue, such as reducing energy consumption?
The fuel economy will force virtually every company to consider new efficiency options. While I cannot begin to suggest what might mean to your company, specifically, I am confident of this much: There will be no sacred cows.Mike Anderson
Tuesday, June 3, 2008
A recent Ipsos/Habeus study indicates that 67% of consumers prefer email, compared to only 29% who prefer the phone. (The study, published by the Center for Media Research, is definitely worth a read.)
I, for one, am not surprised by that statistic. For years, consumers have known the frustration of wasting precious time navigating a phone tree when calling a company for help… or getting solicitation calls from vendors during dinner. With a reputation for time savings, it makes sense that email and other alternate forms of digital contact are gaining ground, in terms of the way consumers like to communicate with their providers. People can sort, prioritize, act on—or delete—the message quickly. They have greater control over the communications process. And filtering software or services can help protect them from unwanted advances.
Implications: Telephones did not annoy consumers, businesses did. A wise company will keep that in mind as they decide how email, text messaging, and other new digital tools should be used. The goal is to empower the consumer, and facilitate the communication they want, when they want it. Digital messaging should reduce the number of steps required in the consumer’s search for help, not aggravate the process. It is not enough to simply migrate more of your corporate communications into a digital platform because that is what consumers prefer; you have to ask why they prefer it… lest you become a member of their “blocked senders” list.
Also, you must accept that one or two distribution platforms are not enough. In a world of email, text messaging, web sites, RSS feeds—and yes, even phone calls—no single communication plan will reach every consumer. Mind your research… and make sure you’re touching your most important clients through their most strongly preferred channels of contact.
When I opened the New York Times this morning, an event that had been foreshadowed by countless tremors finally hit the Richter scale with a thud. GM had announced the closure of four North American truck and S.U.V. plants. (Stay with me, here; sometimes, it is important to state the obvious.)
While this move is not particularly surprising in a period of skyrocketing fuel prices… it is a benchmark announcement. (Chrysler and Ford have also announced reductions in large-frame vehicle projection over the past two years.) Because we’ve been suffering from dramatically escalating gas prices for quite some time now… and still, just a couple of short years ago, trucks and S.U.V. sales remained an amazing—if not leading—profit center for most manufacturers. But it seems a tipping point has finally been reached, where people (and car companies) no longer believe that gas prices will return to a level that which consumers previously considered, “reasonable.”
Implications: To be sure, car manufacturers increased their output of fuel-efficient vehicles after the oil embargo of the 70’s, and in response to the gas price spike of the early 90’s. But now, in dramatic fashion, the industry is signaling that the days of the gas-guzzler-as-commuter-car may finally be over. It is official: Fuel efficiency is no longer a fad.
Can you save the consumer a trip to the store by helping them “buy big” during each visit? Do you offer online planning tools that require less driving around for comparison shopping? Do you offer delivery of products which the consumer previously hauled home in an oversized S.U.V…. a vehicle which they might no longer own?
Thursday, May 1, 2008
For years now, I’ve been asking folks to accept that longer life expectancies mean more than just living longer. People are living healthier longer, and they’re staying active longer. And they’ve behaving in ways that have huge implications for today’s marketer.
For example: Retirement funds have to last longer. (It’s a simple math problem.) So today’s senior is more likely to work, at least part time. They want an income so that they can tap the savings account later—or less often—and maintain a lifestyle rich with activity. Important note: The new job for a 60+ person is not just about earning fun money. We’re finding that more and more people are retiring from the job they’ve always had to have (for economic reasons)… to take the job they’ve always wanted to have! (If someone has spent 30 years as an accountant, in an interior office with no windows and little human contact… their “2nd life” job might involve working at retail, or at the zoo, or anywhere they can get something the previous job didn’t offer.)
Need more proof about how dramatically different today’s senior is behaving? Visit this story from the New York Times. You’ll realize just how much muscle this market has!
Implications: Remind your HR department that some of their next “best recruits” might be “2nd Life Seniors.” If you’re in retail, consider offering “Experiential Value-Added,” rather than just a discount, for seniors. But above all… take another look at the market of New Age Seniors. They’re not your parents’ grandparents.
According to a recent story in Marketing Daily, the FTC last considered the topic of “green marketing” in 1998. (And back then, as the story mentions, consumers hadn’t even heard of “carbon footprint.”) But the commission seems intent on reconsidering the definitions for “green marketing,” and further scrutiny of both packaging and advertising claims related to those terms.
The FTC isn’t the only point of inquiry. Consumers, themselves, are increasingly apt to investigate whether environmentally-friendly claims have merit, according to the Center for Media Research. They recently published a story asserting that only 12.1% “always” believe green advertising claims. And 41.6% of consumers at least occasionally research the claims made in green advertisements.
Implications: It is not enough for a company to craft advertising slogans or positioning statements with a green theme. Consumers are less likely to believe in such boasts, and indeed, more and more likely to go online and investigate details about a product's environmental impact. If you don’t have a legitimate claim to being environmentally responsible, advertising such is likely to do more harm than good. If you DO have a bona fide product or process which is eco-friendly, don’t just claim, demonstrate it. Provide the information and transparency that some consumers will demand before buying-in to the claim you’re selling.
Friday, April 18, 2008
A recent story in Media Post/Marketing Daily discussed this renaissance of re-heating. The story indicates that 55% of Americans are preparing more meals at home than they did last year.
Implications: Of course, it’s too early to tell if this is a long-term trend or a short-term phenomenon (that will likely depend on simple economics and consumer confidence). But as the Marketing Daily story implies, we should watch for spikes in the sales of deep freezers, food storage products (Tupperware, home canning, etc.) and continued increases in the sale of “bulk” foods, as these behaviors might indicate the extent to which food prices are impacting consumer behavior.
Also, does more at-home dining mean more opportunities for family time? If so, what kinds of conversations, games or other entertainment go well with the return of the traditional family dinner? Is there some way in which your product or service fits in?
If more demands will be placed on the kitchen and dining room than in years passed, what kinds of utensils, equipment or furnishings might need to be updated?
For restaurants, it might be time to focus on the utilitarian value your establishment delivers. If dining out is less likely to be “taken for granted,” why should people continue to frequent your café? (Is the meal incident intended to be a romantic getaway? An important business lunch? Or is it intended to celebrate an accomplishment at work, or a birthday in the family?) Watch for out-of-home dining to become even less about the food, and more about the experience or event which inspired the visit.
And by the way, don’t be surprised when more patrons ask for a “to go” box for their leftovers.
People have been asking for more ethanol production and other bio-fuel alternatives for years (or at least, they’ve been asking for ways of mitigating high gas prices). Recently, petroleum prices have risen to a point where the production of alternative fuel seems to make financial sense. But there is increasing global scrutiny over a market in which bio-fuels are competing for the same crops and commodities which were previously devoted to the food supply.
Implications: It is not my intent to express a personal position on this issue, one way or the other. But I think it’s important for us to anticipate that consumers will have an opinion. It is reasonable to expect increasing media attention focused on BOTH high petroleum costs and world hunger, two topics which can impact consumer sentiment with great force. Just as consumers might be interested in where you company stands on charitable giving, global warming, or fair trade, don’t be surprised if this issue joins the list of hotly debated topics.
For example, some people might be delighted that your company’s delivery trucks use alternative “bio-fuels,” because “the energy comes from here at home and helps our farmers.” Other people might be offended, in response to their belief that bio-fuels might be tapping commodities which are already in short supply in a world that is hungry. Again, I intend no subjective editorial viewpoint here; but as news coverage gives this topic a higher profile, expect it to stimulate passionate and polarized opinions.
Thursday, April 3, 2008
In late March, four different airlines voluntarily cancelled more than 700 flights after the first phase of an FAA maintenance audit (see this story from KRON-TV). The news was disruptive enough that congress has started to ask questions about why issues had not been detected earlier (see this story from the Minneapolis Star Tribune).
Meanwhile, controversy grows about the use of direct-to-consumer advertising by drug companies (see this update from the NY Times). A two-year drug trial questions the effectiveness of two cholesterol control drugs (story from UPI). And it seems like there are frequent recalls of foods and medicines—many of which were previously approved by the FDA (see the agency’s own recall records page.)
Lead paint on imported toys. Sub-prime lending practices which contributed to a destabilized credit market. A bridge collapses in Minnesota (after passing an inspection just a couple of years before).
I could go on… but let me assume the point has been made. Industries we thought to be regulated… are proving to still have significant irregularities.
Implications: The spate of recent news reports about recalls and regulatory missteps could intensify the consumer’s desire to buy from trusted providers, and accelerate their use of online tools to scrutinize and research the products and services they buy. (Example: see Recalls.gov.)
We should not be surprised when customers demand increasing transparency in the way products are designed, produced, and tested before going to market. Companies who provide some type of independent certification, research, or other assurance of quality may find such validations to have significant gravitational pull… for consumers who might increasingly feel like they must fend for themselves in the quest for products that are safe for their family.
Friday, March 14, 2008
No one has yet established that the U.S. is officially in a recession… but certainly, we can agree that consumers are a bit uptight. There have been job losses, higher gas prices, a devalued dollar, a credit crunch, and higher costs at the supermarket. The consumer response, in some cases, has been the practice of “trading down.” And some companies, having long served consumers who have prioritized quality over cost, and premium over price, are now trying to figure out how they should respond (see this Marketing Daily article; a free subscription may be required).
The question is, “How long might this phase of consumer conservatism last?” That’s the billion dollar question. But it’s one that needs to be asked. After all, with crude oil flirting with a new benchmark of $110 per barrel, a chain reaction might be set in motion. Not only are gas prices higher for commuters, but it costs more to manufacture the products we buy, and to transport them to the stores where they are sold. And those higher petroleum prices are causing bio-fuel alternatives to increasingly compete for some of the same commodities that used to be thought of as “groceries.”
Want to get rich? Be the first to figure out whether this is a short-term tremor, or if the supply and demand ecosystem is going through a tectonic shift. Or, consider how current consumer attitudes might impact people as they consider the purchase of the product or service you sell.
Implications: If you’re a grocer or food producer, can you now regain some of the market share that had previously gone to out-of-home dining? If you’re a restaurateur, can you position yourself as a “well deserved reward” for a week of hard work and self-denial? If you’re a car dealership, should you be selling new vehicles… or selling against the high cost of maintaining an old one? (Fuel efficiency isn’t the only factor involving cost!)
Consumers can be expected to proceed with caution, and while they might make some of the same decisions and purchases, they might contemplate their actions within a different context over the next several months, or even years.
In some ways, consumers are beginning to say, “Enough already!” A certain level of fatigue is beginning to set-in where “responsible consumption” is concerned.
I’ll give until it hurts. People don’t mind buying canvass totes to replace the plastic shopping bags they used to get for free. And they don’t mind buying one CF light bulb for the same price as they used to pay for a six pack of incandescent bulbs. But look around during your next morning commute: Count the number of big SUV’s which are being driven as if they are commuter cars! (And many with only one person inside… not exactly what you’d call a “car pool.”) Almost everyone has a few indulgences which they’re reluctant to give up.
Conspicuous compliance. People like to buy “green” products, drive hybrid cars, and faithfully roll the recycling bin down to the curb on trash day. These are activities one might consider to be “top of mind,” or “high profile.” It’s easy to get caught doing the right thing. But some of these same folks will toss a CF light bulb or set of dead alkaline batteries into the kitchen trash bin… even though both of these products represent hazardous waste. (They contain chemicals which have the capacity to contaminate ground water in and around landfills.)
Even when we try to buy at our environmental best, nobody is perfect… at least, not all the time. Consumers can find themselves having to “pick their battles.”
Implications: Offering a “socially responsible product” is often not enough. Should your company explore ways of selling the consumer on why this issue should be a priority, and how your product addresses that issue? In what ways can you help the consumer be rewarded for embracing your socially relevant campaign? (In other words, how can you help them get caught doing something right?) Are there ways you can make the desired behavior easier for the consumer? (After giving a presentation to a group of business owners recently, the head of a retail chain approached me to say he was going to install “battery bins” at the entrance of his stores, to encourage proper disposal of depleted batteries.)
Thursday, March 6, 2008
17.9% of Americans are retired now, a number that has increased by 6% over the past five years, and which will grow even more dramatically as boomers approach retirement age. But the demographic group known as “retirees” isn’t just growing in size. It is growing in individual economic stature.
Today’s retirees look much different than those of a few years ago… they have remarkable spending power. The briefing cites a Media Audit report which indicates that more than 13% of new cars are purchased by retirees. 83% of retirees own the home they live in. And 30% of retired adults have investments exceeding $100,000 in value, a higher share than ever before.
When you think of people who are “approaching retirement age,” do you picture Sylvester Stalone (born 1946, age 62)? Bette Midler (born 1945, age 63)? Jane Fonda (born 1937, age 71)?
Implications: Boomers are changing the face of retirement… if not the very definition of retirement. Boomers, who “came of age” in the 60’s and 70’s… have been life-long fans of experimentation and experiences. When you company introduces or promotes a product or service, do you consider the early-adopter mentality of today’s boomers and retirees? Do you sell features (product attributes) or benefits (lifestyle experiences)? In 2008, “upper demo” doesn’t mean what it used to.
Overwhelming Abundance is a long-term thing. But just as any other trend is faced with contradictions, the current economy is demonstrating its’ strength as a counter-trend. With oil spilling over the $105 per barrel mark, rising commodity prices, and other cost pressures resulting from intense use of consumer- and sub-prime mortgage debt, consumers are cutting back. (I won’t use the “R” word here, as it lacks relevance to this story. People are spending less freely, plain and simple.)
Small luxuries are often the first to go, as explained in a recent story in USA Today. Consumers are discovering that fewer cups of designer coffee each week can add-up to real savings. And by replacing owned items less frequently, consumers are feeding their desire to “think green” (re-use, renew, recycle) while they save cash by deferring purchases. Being frugal is no longer seen as “cheap,” but as responsible… and an attribute to flaunt, not hide.
But all of this does not mean people will cut-out all of their “little indulgences.” Often, consumers will splurge on isolated luxuries as a reward for having been frugal in other areas. (“We’ve been careful all month, for heavens’ sake. We deserve to take a weekend trip.”) Further, a tight household economy can even cause consumers to upgrade. (“We don’t want to have to replace this appliance again in three years… so let’s spend more to get the better machine.”)
Implications: In what ways can your products and services been seen as delivering on a true need, rather than just a want? If you sell luxuries or small indulgences, does the consumer see you as “the exception” to their new rules for fiscal responsibility? Can your company make a case for quality (i.e., getting consumers to upgrade to more expensive lines as a means of obtaining long-term value)?
Monday, February 4, 2008
Recognizing that it could yield some word-of-mouth advertising on a global scale, some companies have attempted to harness the power of consumer-generated content to create “viral” marketing campaigns. Some, however, have discovered that this powerful weapon can easily backfire. (For example, visit YouTube.com and search their archives for “Tahoe commercial.” Warning: Some of the entries can be considered offensive and insensitive.)
Last week, the New York Times reported on yet another attempt at manipulating consumer-generated content that may have snowballed out of control. The story explained that Subway restaurants was suing Quizno’s for slander, even though the ads in question were produced not by Quizno’s, but consumers. The short version of the story: Quizno’s sponsored a contest, challenging consumers to build commercials explaining why they thought Quizno’s was better than Subway. The winning commercial entry—among other things—would be run in an actual television commercial. Subway’s suit contends that many of the entries, seen online and on television, were factually inaccurate… and that Quizno’s is culpable. (To read the full story, click here. A no-cost subscription may be required.)
Implications: The Internet offers a host of marketing opportunities, not the least of which is gaining “worldwide word of mouth,” which travels at near-instantaneous speeds. But proceed with caution, and be careful what you wish for. As the name implies, consumer-generated content means that the company must relinquish control of the message to consumers.
Almost every trend is a simple matter of cause and effect, and this one is no different. Right now, candidates are spending millions of dollars point out how they are different from the others in the race for President. Even members of the same family can disagree on who is best suited to lead the free world.
Regardless of your party preference or candidate of choice, we can all agree on this: Things can get a little nasty. And this generally hostile exchange will only escalate between now and Election Day. (A wise man once told me that, “Democracy is not perfect, it is only the best political system on the planet.”)
As tense as things will be over the next several months, a period of reconciliation is just as predictable. Soon after the voting is over, political anxiety begins to fade. The “losing party” realizes that it must try to get along with the new Commander In Chief. The constituency—we the people—begin to realize it has been suffering from election fatigue. And conversations begin to refocus on the issues which unite us, rather than those which divide us.
Implications: The post-election period is usually a time of hope, reconciliation and increasing unity. It is the perfect time for products supporting those values to hold a very high profile. Themes that might resonate with consumers might include “American made,” or simply that Norman Rockwell-ian image of “a traditional American family, gathered around the table for a meal at home.” This sense of unity is further reinforced by the holidays which commence at Veterans Day in early November, through New Years and even up to the inauguration.
Wednesday, January 30, 2008
I have always believed that, while we all have something to learn, it is also true that each of us has something to teach. Your professional experiences and personal observations create a knowledge base that is unique… and valuable.
With that in mind, please feel free to drop me an email anytime you have an idea to share, a story to suggest, or an observation you think might gratify the readers of this blog.
Your input can be as brief as “nominating an idea” in a brief sentence or two… or, you can tap-out a more complete, story-like email, if you prefer. Either way, your suggestions are welcome, and appreciate your investment of effort.
Thanks, in advance, for sharing your intelligence.
Tuesday, January 29, 2008
If you have any questions, drop me an email.
Thursday, January 17, 2008
Last year, I became a frequent contributor to the group’s newsletter… which has had the effect of putting my already intense passion for people-watching into overdrive. My ACT colleagues have greeted my contributions warmly and the response here at CSS is the project has expanded our organizational intelligence.
For awhile, until we had a handle on where we were headed with this, we just kept this work within the CSS and ACT groups. Just recently, we’ve been test-marketing this increasing body of work among a small group of CSS clients, helping them use this knowledge for immediate benefit. This effort now has a name: Elm Street Economics.
Mike Anderson 2/17/09