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Monday, June 30, 2008

Don't cry over spilled milk

Soon, fuel economy will be thought of as more than just a measurement of miles-per-gallon efficiency in a vehicle. The fuel economy could be an all-encompassing term for the way tight energy supplies impact companies and their consumers.

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

What we have here is a failure to communicate

When you’re doing business with someone, how would you like to be contacted?

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.

Mike Anderson

It's official: Fuel efficiency has gone from fad to trend

One of the challenges facing any trend watcher is trying to distinguish between what is a fad, and what is a trend. A fad is a short-term spike… something flares fast, but then passes relatively quickly (think Pet Rocks, disco and big hair). A trend is more of a tectonic shift; an indication that the landscape is being altered, and the way we’ve been navigating it needs to be re-considered.

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?

Mike Anderson