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Tuesday, November 18, 2008

Banking on consumer confidence

To say that the banking industry has gone through some trials over the past year would be a gross understatement. But against this backdrop of turmoil, and recognizing that consumer opinions about banks and banking are shifting, a number of financial institutions are offering a message of strength, stability, security, and/or responsibility.

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.

Mike Anderson

Saturday, November 1, 2008

Pulling the cork on wine?

Rachel Litner of Rachel Litner Associates graciously submitted this observation to be explored by TrendLine: Some folks in Japan are pushing for wider distribution of wine, packaged in cans. Rachel came across the story at CScout/Japan… and the movement is actually the idea of Japan Rail. It seems that public consumption of alcohol is taboo; a notion they’d like to change. (Wine is purely for refined drinkers, right?)

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.

Mike Anderson

Unemployment, or OVER employment?

It’s easy to be worried about unemployment; it seems we are reminded of layoffs almost every day, either through news reports, or when we receive a note from an old friend or co-worker who’s been displaced. But there are other, perhaps less apparent byproducts to this recession.

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.

Mike Anderson