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Wednesday, January 21, 2009

Experiential philanthropy

Even before taking office, the Obama administration began issuing a call to service, asking Americans to volunteer. A website was launched to connect people who could help to people who had needs (, and a YouTube message from Michelle Obama invited people to action on Martin Luther King Day. The spirit of participation also permeated the Inaugural Address.

I’ll spare you my reasons for thinking all of this was politically smart. But there are other reasons this push for volunteerism is the right message, at the right time. Chief among them: Simple economics.

Until very recently, many people have enjoyed a period of relative prosperity (some of it real, some of it an illusion). There has been a sense of overwhelming abundance, in which many people bought big houses, parked a couple or more cars in the driveway, and used plentiful paychecks or access to credit—or both—to fund a very nice lifestyle. Those paychecks often came from careers with big demands; consumers often had more money than free time. So, “charity” was often expressed in the form of a check or online contribution.

These days, many people are feeling a little less flush; they have tightened their belts, make purchase more cautiously, and many cannot donate as much as they did perhaps last year or two years ago... at least, in monetary terms.

Implications: Did you notice the general spirit--or shall I say, the "aura"--of people during the inaugural ceremonies this week? I offer no partisan remarks here… but I sensed that people from all walks of life and political persuasion seemed to have a sense of hope, optimism, and good will. Few people think the road ahead will be easy. But they seemed to feel ready for the trip, and prepared to carry their share of the load.

Another issue deserves consideration: In a fundamental switch from years past, consumers may have more time than money, in the near term. (Not that either is plentiful, mind you!) But in an economy where it might be difficult for some families to donate, financially, to the charities of their choice… it can be empowering to think they can still give, and at that, a gift perhaps more valuable than money: They can give of themselves.

I’ve said this before, but it bears repeating: In the wake of overwhelming abundance, and when people are in a back-to-basics frame of mind, “what I have” can become less important than “what I have done.” This is no less true where charity is concerned.

Cause marketing has always been an important part of a company’s public relations arsenal. But it might be time to revisit the motives and methods you use to engage consumers, where cause marketing is concerned. Is your company doing anything charitable… which might benefit from the manpower of your consumers, as much as from their financial gifts? (Think building for the homeless, racing for the cure, or reading to children at the local school or library.)

Here’s to a new era of doing well… by doing good.

Mike Anderson

Covered by mass media, but also covered by the media of the masses

The election of President Barack Obama reveals many shifts in politics, policy, and the overall attitude of voters in the United States. But some of the scenes from the inaugural ceremonies reminded me of another, more tangible shift, too strong to ignore.

As television cameras panned the audience in an effort to show the magnitude of the crowd… the crowd, in turn, was doing the same! There were thousands of cell phone and digital cameras panning the audience. There weren’t just two million people. It seemed like there were two million reporters... all hoping to text or email a message back home that said, “I was there.”

Thousands of free-floating images were out there this morning, in hundreds of online photo albums. It all reminded me of this fundamental truth: Your company is on candid camera. A large number of the people who shop in your stores, own your products, or experience your service… are camera-carrying reporters, ready to jump into action.

Implications: Is your company doing anything remarkable enough that customers want to click, capture, and share their shopping or ownership experience with friends?

Is your company doing anything—or neglecting anything—that you would NOT want a customer to click, capture, and post online?

It’s important, these days, to have your company “Facebook ready.” Because your next marketing campaign may not be launched by people who are under your employment.

Mike Anderson

Tuesday, January 20, 2009

Let us be perfectly clear

75% of consumers believe “complexity” contributed to the current economic downturn, according to a recent study by Siegel+Gale. The research sampled 1,214 consumers in late December and early January.

Other portions of the report (as quoted by MediaPost) seem to suggest that a majority of these consumers see themselves as partially culpable for letting financial missteps happen: 52% of respondents admitted that they only "sometimes" or "never" read investment materials or insurance policies that they sign, with 50% acknowledging that "it's the final responsibility of the customer to make sure they understand all the risks."

Compared to a year earlier, 37% of consumers said they were less likely to trust their mortgage lender, 36% their broker or financial advisor, and 35% their bank.

Implications: Regardless of the business you’re in, there are beneficial lessons in this research. From credit card terms to mortgage documents, many consumers see life as a set of complex details often printed in a microscopic font. The sheer length and complexity of many contracts effectively defends them from the risk of ever being read. Many time-sensitive consumers began “skimming the details”… or ceased reading the documents entirely. Now, many of those consumers are paying the price.

Going forward, expect people to actually read the fine print involved with your offer… or choose an alternative so simple that no fine print is required. (84% of these survey respondents said they are more likely to trust a company that uses jargon-free communication.)

If you’re a packaged goods company, how does that impact your packaging or coupon redemption? If you’re a manufacturer, how does that impact your warranty? If you’re a retailer, how does it impact your return policy? Many consumers have re-learned: The devil is in the details.

Now… while some of you might read this as a threat, others will see it as an opportunity; I prefer the latter. The Siegel+Gale report also indicated that plain-English explanations and disclosures would give these consumers a 79% increased interest in investing in a financial product, a 73% increased interest in selecting a broker or a financial advisor, and a 63% increased interest in applying for a credit card.

Could your company use some increased consumer interest? Is there some way you could reduce the complexity cost of buying the product or service you sell?

Mike Anderson

Is it a health plan or an incentive plan?

Today’s USA Today story about employee wellness plans is yet more evidence that healthcare in America is facing change.

People are living longer, and aspire to live healthier longer. Thus, they are taking greater interest in their own well-being. But another driving force is that the impact of poor health among employees is hitting companies where it hurts: On the bottom line (due to both rising insurance premiums and employee downtime). So, some companies are offering performance-based incentives to workers who reduce their cholesterol, control blood pressure, and meet other quality-of-health targets.

Implications: While the focal point for many consumers right now is cost, healthy foods and habits continue to have gravitational pull. The advantage may go to those products which can demonstrate a proven correlation between their use and better health. After all, companies are rewarding their workers for outcomes, not just actions. Expect consumers to do the same, where “health-conscious” purchasing is concerned. A “claim” might buy you product trial. But it might take more—like actual results—to buy product loyalty.

Mike Anderson

There is no immunity in the C-suite

In an economy like this, nobody is exempt from the risk of unemployment, according to a recent story on CNBC. Including the CEO or VP.

There are a wide variety of reasons for changes at the top: Plummeting revenues, failure to adequately cut expenses, attractive single-swath payroll reductions, and that perennial favorite: Finding a scapegoat.

Implications: If you’re the chairman of a company, the over-supply of available talent might make this a good time to upgrade that leadership in your corner office. If you’re an employee, you might not need a job change to experience a changing job (and boss). If you’re a business-to-business sales rep, perhaps you should work deeper into every company you sell through; what a shame it is to lose “the one contact you had” within a major client.

Oh, and, if you’re a C- or VP-level executive… it might be smart to stay connected to old comrades, and keep your resume’ updated.

Mike Anderson

Breaking up is hard to do

The side effects of falling property values reveal some societal changes our grandparents could not have imagined. A recent story in the New York Times focused on a couple going through a divorce. Rather than fighting over who got the house, the issue was, “Who would be required to take the house!?” (Or more accurately, the houses.)

Implications: If you look at this story as a student of consumer behavior, this is interesting. If you consider it from the perspective of a divorce lawyer, you might see this story as an indication that the needs and expectations of your clientele are ever-changing; that your firm might be smart to transcend family law, and offer resources (internal or out-sourced) in bankruptcy law, real estate, and other areas.

Lots of consumers are experiencing change right now. In your attention to the obvious, don’t forget to notice the subtle or sublime. It might help if you step out of the office, and consider the issue from an entirely new point-of-view.

Mike Anderson

Tuesday, January 6, 2009

Think of it as Economic Natural Selection

I was once invited to stop and think about how many different variations of Chevrolet you can buy. Today, with all of the different models, colors, styles and options, there are literally thousands of combinations and permutations; your choices are virtually limitless (and some might say, “Utterly confusing”)!

But enough about cars… let’s talk about frozen pizza. Recently, I counted-off the floor tiles at my local “Everyday Low Price format” grocer... to learn they offered 84 linear feet of frozen pizza, showcased in a row of freezers that are eight feet tall. And while there were some mild price point variations—and a couple of distinctions between thick and thin crust—for the most part, it was dozens of different brands of virtually the same pepperoni, sausage or cheese flavors.

It all begs the question, “When is enough enough?” And the current recessionary economy could well demonstrate that the current “enough” is way too much. I don’t think of myself as a futurist, but this is a matter of cause and effect. A recent story in the New York Times makes a great case for the idea that in the future, car companies will be dramatically smaller… which has the likely effect of offering a smaller menu of vehicle options. Another story—a commentary published in Marketing Daily—suggests that the downturn will (or should) cause retailers to dial-down on the number of SKUs they offer, offering choices people really want, and sacrificing those products which are merely offered for the sake of creating an image for variety/selection.

And it’s not just products that could vanish from store shelves. The shelves, themselves, are likely to disappear in large numbers, according to a recent story from CNN/Money.

Implications: If you’re a packaged goods manufacturer, anticipate volatile (if not simply higher) prices for the real estate where your product is sold (the facings you receive at retail). Merchants are disenchanted with the idea of carrying products whose only distinction is a nuance… and which inspires purchases that could be called few or infrequent. You will need to offer more than a product. You’ll be increasingly expected to have ideas about how to help the retailer sell it.

If you’re a consumer (and you are), prepare for a future that could include with fewer choices, where unusual or unique products are concerned. (Again, I offer a range of options, not a set of predictions.) In fact, you might be heading for a return to the day when shopping required, well… shopping.

If you’re a retailer, you know that catering to the nuances of different consumers can be very expensive. It means you have to stock a lot of inventory… much of it interesting to only a few rare customers. As the recession makes reducing SKUs attractive, prepare to offer your customers alternatives to products they counted on you to offer. And consider what front-end (customer) services need enhancement… as a means of offering a fulfilling shopping experience amid sometimes diminished consumer choice.

Finally—and I think this goes for all of us—anticipate a roller-coaster of price fluctuations. On one hand, when supply (inventory) goes down, prices generally go up. But in a competitive environment—where so many producers and retailers are fighting for their very survival—it could be that prices get caught in the crossfire, and are forced to stay low.

We live in an economic ecosystem where not all products and purveyors will survive. It is ironic that choice is likely to be among the most obvious casualties… where economic “natural selection” is the driving force.

Mike Anderson

In with the old

Elsewhere in this blog, I've discussed the increasing propensity to repair instead of replace belongings, when doing so is an economical option. And here’s more evidence that “new” is getting old for many consumers: A story in last Sunday’s Minneapolis Star Tribune spoke of the success many used car dealerships are having right now. It is worth a read if you manufacture or sell any kind of durable goods.

Implications: If you sell durable goods, your biggest competitor may be the product you sold last year. “We can get by with the one we have now” might just be the most important thoughts and words—objections—you can teach your sales force to deal with in the near term.

Further, for as long as “pre-owned” or “now owned” demonstrates such gravitational pull, the front-end purchase experience and follow-up service and support you offer will be crucial. If the consumer sees little experiential distinction or value advantage between buying old on Craig’s List or buying new from you… cheap will carry the day.

Mike Anderson

Disposing of the disposable attitude

Remember taking your VCR to a service shop so it could be repaired after your kid shoved a Matchbox car into it? I do. (Okay, now I've dated myself, haven't I.) But until recently, except for their cars, most consumers probably can’t remember the last time they called a repair man or woman. Washing machine starting to rattle? Shop for a new one! Elements burnt-out on the toaster? Stop at Target!

That was all well and good in a world of Overwhelming Abundance. But when times are tough, expect “service and repair” to enjoy a renaissance, as consumers look for lean alternatives to spending more than necessary.

A recent story from MediaPost explained how Best Buy’s “Geek Squad” is taking advantage of this gravitation toward “repair versus replace”: A website calculator intended to help the customer decide which of the two would be most cost-effective. Simple. And brilliant.

Implications: Is yours a product that can be repaired? Do you offer factory- or factory-authorized services? Do you make consumers aware of these appreciated-more-than-ever options?

Designed obsolescence, once almost assumed, may be considered and avoided in the current economic climate. Ironically, cost-motivated consumers might not shop for the cheapest alternative… but rather, the alternative that is cheapest to own (due to durability and ease of repair).

Remember the term, “modular components?” They might be something to brag about again.

Mike Anderson