Tuesday, November 30, 2010
A similar bill was passed by the house weeks ago, and must now be reconciled with the senate version. It remains to be seen if that can happen in this congressional session, according to this version of the story from the New York Times (click to link).
Implications: These days, bi-partisan support for anything is very rare. But after recalls on everything from eggs to peanut butter over the past few years, the topic of safe food is an easy political target.
Politicians often bet their survival on topics they deem popular and important to voters. Your company is a candidate, too, with elections held every day and where consumers vote with their dollars. Are you focused on what’s important to them?
Is food safety a competitive advantage for your grocery store, restaurant or other food business? Or… is it an issue that could haunt you sometime in the future if you don’t take time to inspect operational procedures and staff training?
Monday, November 29, 2010
Implications: Sounds to me like this translates into more spenders, but continued modesty... or "spending per shopper." It will be interesting to see if there is still such a thing as "Cyber Monday," and we should have those reports by late today or early tomorrow. (Isn't cyber shopping now kind of a daily occurrence? Once upon a time, people went online to grab items they couldn't get at the stores--at least at the price they wanted--or shoppers looked at today as the deadline for buying online if you wanted to receive the package by Christmas. With so many shipping options now, and the ubiquity of online comparisons, I'm not sure either of those elements continue to be the case. But I guess we'll see.)
Here's hoping the positive start to the shopping season has sufficient momentum to give your company... "Happy Holidays."
Implications: Are your financing and plans and credit card offers the same now as they were in 2007? People are using credit differently... and for different reasons. If you respond to those changing needs and cash management priorities, they win, and you win.
[Note: Thanks to the Palm Beach Post for inviting us to be a part of your story on credit practices.]
Tuesday, November 23, 2010
Implications: The more things change, the more things change. Gen Y could be a transitional cohort for whom vehicle ownership is not to be “taken for granted.” Whether out of environmentalism, economics, both, or “other,” it would appear that an increasing number of Millennial consumers are rethinking whether vehicle ownership is an absolute need, or just a want… which can be satisfied through other means.
- It might be smart for manufacturers to start talking about freedom and flexibility (of time, travel, scheduling, etc.), rather than just horsepower and style. How does this pitch sound coming from a dealership?
- Is there room in the market for a vehicle that is “situational?” (A car that one does not drive everywhere, but which is affordable enough to own even though it might be used only few times per month?)
The grocery store.
In a recent Supermarket Guru column, Phil Lempert reminds grocers of that very point. (Click here to link.)
Implications: Glad I’m not the only one who things of this as blatantly obvious. When you fill or renew a prescription, why not provide cross-department incentives like these?
- For diabetics: A shopping list of lo-carb snack ideas, along with the aisle-address of where to find each item.
- For cardiac or cholesterol prescriptions: A few recipe cards with heart-healthy meal ideas, or a list of benefits associated with various fruits and vegetables (and a map to the produce department).
- With the purchase of cold and flu remedies: A cents-off coupon on a can of chicken soup (the kind mom fed you to make you feel better when you were a kid).
- For osteoporosis patients: Coupons for calcium-rich dairy products that could enhance bone health.
Even for a category as “prescribed” as grocery store pharmacies, opportunities surface when you stop thinking about the products sold, and start thinking about the target consumer who buys, and why. And you’ll create a grocery/pharmacy value proposition that is difficult to match in other drug store channels.
Monday, November 22, 2010
Some of the bad feelings toward select banks were well deserved, but other hostility may have misdirected toward all forms of banks, including some who were impacted by, but not necessarily responsible for, the financial meltdown of 2007-2009.
It seems as if some of those negative emotions could be starting to wane, according to this story from Media Post Marketing Daily. Click here to see it.
Implications: I think that as more time passes, consumers will realize the complexity of the financial crisis that was the great recession. It was not an industry that brought all this hardship on, but certain players within that industry.
Surviving banks—even those who brought no harm to their customers or the economy—must nonetheless realize the importance of explaining their role in the community they serve… or risk being unfairly cast with an industry that some consumers are still slow to forgive.
Few consumers realize that some banks were “encouraged” to take T.A.R.P. money, even thought they did not want it. Fewer still realize that it wasn’t a “bailout,” but a loan, to be paid back with interest. Fewer still realize the many ways their local bank, thrift or credit union serves as a vital cog to business, employment opportunities and prosperity in the community.
If you work in financial services, it might be prudent to educate your customers thus, rather than waiting (or hoping) for your customers to figure it out.
Friday, November 19, 2010
While doing research for another project, I came across this dandy little tool at the New York Times website: It lets participants make choices about how to solve the projected deficits. Click here to give it a spin.
Implications: The challenge of government, these days, is to help its citizenry understand the complex issues of taxation, services rendered, and sacrifices required. This puzzle/tool helps the participant gain fundamental knowledge of a complex issue. (I found myself wishing a form like this could have replaced the one I was offered at the ballot box a couple of weeks ago.)
You know, really good political commentary is hard to find these days, but I did hear a pearl of wisdom one day, just before the election, while flipping through the news channels. Someone said (I’m paraphrasing), “The problem is that we all want to go on the Hot Fudge Sundae Diet. We all know we need to go on a diet, but none of us wants to give up the hot fudge sundae that’s sitting right in front of us.”
Indeed, many folks have a NIMBY approach to tax cuts, not unlike their feelings toward nuclear power plants or hazardous waste facilities: They’re necessary and important to have, but Not In My Back Yard.
I only bring it up because voters are also consumers. And most companies are at risk of eventually facing the same kind of conundrum. It could be related to the battle between products that are cheaper because they are made with less expensive foreign labor… or it might have something to do with a service that is personally enjoyable but environmentally harmful.
Do you have ideas to explain complex consequences in an easy-to-understand way? Doing so might mean the sale or no-sale of a product, service, new store location in a quaint neighborhood... or even just an idea.
Implications: This is a good illustration about the importance of smart targeting (no pun intended).
One could argue that when people had to cut back, Wal-Mart was an attractive alternative. One could further argue that the store was an attractive destination for people who did not “have to” cut back, but wanted to cut back.
Now that the economy is turning, Wal-Mart retains those customers who were forced to cut back, but they might have little to spend. Those who decided to cut back during the depths of the recession might be finding their way back to less price-oriented providers… or to those retailers that might be seen as “balanced” between quality and price.
Implications: While the commentator in this story (Adam Hanft) puts it a bit harshly, he makes a good point. And that is, Wal-Mart enjoyed a windfall of new customers with the onset of the recession, but whether they can hold on to those customers as we move through recovery remains to be seen.
This might just speak to one of the principles we focus on often, in Elm Street Economics workshops: Know your target consumer, know what benefits are sought by that consumer… and realize that both the Target and the Benefits are subject to change at any given moment.
Did you lose customers to competitors with the onset of the recession that might be ready (or may have already started) to return to your business? How can you make that happen faster? Did you gain customers in response to the recession? How can you prevent them from going back to their old ways, if those ways did not include you?
Thursday, November 18, 2010
Implications: This year, I’ve facilitated dozens of workshops we refer to as “Audience DNA” and “Consumer DNA” programs. In the DNA workshops, we mine through volumes of qualitative research to understand the demographics, lifestyle (nature) and affinities of various population segments and industry categories.
One category that is particularly interesting is banking and investments. We typically explore whether a financial institution is wiser to court “blue chip investors” (which I define as having at least a six-figure household income, and who pays for the counsel of a financial planner, accountant or full-service stock broker), or whether it might be wiser to consider reaching “emerging investors” (which I define as having an above-average income, but someone who does NOT yet have a financial planner, accountant, or full-service stock broker).
This challenge raises the perfect conundrum: The blue chip investor has more money, but is already a customer in the category. (To win their business, they’d first have to fire whomever they are using now.) The emerging investor has less money, but has nothing to unlearn, no habits that need breaking, and might therefore represent “a path of less resistance.”
Are your best prospects for the future the same as the best customers from your past?
Two articles of similar nature crossed paths on my laptop yesterday, and I’ve been thinking about the collision ever since. The first was a very simple newsletter from Media Post: Engage Moms. The essence of the story was that when you target “moms,” you shouldn’t focus simply on reaching them as an audience; you should consider everyone they touch as your audience too… and make your message/offer engaging enough for them to pass it along. (Click here to see the complete posting.)
The other piece that captured my thinking was an interview with Chuck Brymer, CEO at DDB, which I found on MeetTheBoss.tv. Watch the edited version below (pre-roll required, and a free membership to MeetTheBoss.tv is required for the full interview version).
Implications: Back in 1980, Reis and Trout authored “Positioning: The Battle for Your Mind,” asserting that marketing does not take place in radio, television or newspaper, but in the mind of the consumer. They were right… and now we can add a plethora of digital tools to the list of media where marketing does not take place. (Positioning still takes place in the consumer’s mind… it’s just that we now access those minds using dozens of tools which did not exist back in 1980.)
So, perhaps the notion that companies own their brands is outdated. If “brands” are nothing more than the identity of a product, perhaps companies own products, but consumers own the brands. That’s important to think about, since many consumers also own their own media companies (including email, blogs, and social networking pages). Is your traditional media messaging designed in a way that inspires adoption, virility, and positive commentary by (consumers) the owners of your brand?
Are you inviting feedback from customers in a way that it can be captured and used? (I’m thinking survey results, and testimony in a wide variety of formats, including email, voice or video.)
Are you rewarding customers who tell a friend? (Not just “liking” you on Facebook, but becoming your product, service or company evangelist!) What kind of rewards might profitably spark that kind of behavior?
This morning’s Media Post Marketing Daily included a story with input from BDO (the accounting firm), which suggests more people doing more gift shopping this year, fewer discounts from retailers, and that email will be one of the main digital tools used by retailers to get customers into their stores (whether that store is composed of bricks or clicks). Click here to see the full story.
Implications: There was a subtle but important observation by Ted Vaughn (BDO) in this story, and I want to make sure you didn’t miss it. He asserted that some people cut back on their spending over the past few years because they had to, and others cut back because they thought they should. For those people who cut back out of caution, rather than necessity, some of that caution is finally starting to wear off.
During the darkest days of the recession, it would have been easy to assume that everyone was unemployed, everyone was being foreclosed on, and that everyone was in dire straits. Of course, that wasn’t the case then, and it isn’t the case now. Some people who decided to cut back on spending (rather than having that decision imposed upon them by debt or income circumstances) are continuing to loosen the purse strings, it seems.
1) The rise of emerging markets
2) The pressure on developed markets to increase productivity
3) Expanding global networks
4) The friction between increased consumption and the need for sustainability
5) The greater role of governments as a business regulator and partner
You are invited to consider these trends in the form of a video from McKinsey (watch it by clicking on the video box below), or, you can read the commentary by downloading a PDF draft (click here). To visit the site where I found these links, just click here.
Implications: The value of trend watching is simple. Awareness of a trend can help you profit from it; lack of awareness can make you a victim of it. The sand is always shifting, and it would be impossible to tune-in to every grain of it… but I enjoy sharing these kinds of overviews, as they can help you notice when the dunes, themselves, are beginning to move.
Wednesday, November 17, 2010
Implications: Do you ever just get tired of being logical, and want to step out and enjoy something that’s fun… even if it makes little sense? That seems to be the point that things have come to for an increasing number of consumers. Enough of practicality—to a point—it’s time to enjoy each other and have a little fun. (But not to the point we go back into the debt we’re digging ourselves out of.)
Implications: If you stop and think about it, wireless devices such as smart phones are relatively new… but that newness will be quite temporary. As mobile digital devices find their way in to more and more veins of society, they will quickly become even more commonplace.
Don’t think of mobile technology as a new advertising medium, alone; think of it as a way of measuring attendance and engagement. Or in the case of a commercial enterprise, perhaps these devices should be used in helping you measure attention, engagement and relevance. After all, you do not enjoy the luxury of a professor who can require kids to show up for your message… you must rely on the consumer’s feedback to determine whether the consumer thought it might be worth their time, interest and money.
Again, a web site or mobile community is a society unto itself.
Implications: When some company principals think about technology, they picture a world that has become more complex. Hyundai has figured out how to use technology… to make life simpler.
Implications: This effort was fascinating to me not because of its relationship to food, clothing, footwear or pet food… but because of the information it extracts from consumers: How satisfied are you, and how has that changed since the last time we talked?
It got me wondering about “degrees of content.” Are you happy to simply be someone’s favorite restaurant (or bank or car dealership or store)? What if consumers rated your operation better than the competition; would that be good enough?
What if the consumer felt most of their usual restaurants were slipping, in terms of service, but yours has slipped less. Would that be good enough for you? Wouldn’t you rather compare the consumer’s opinion of your restaurant this month… to their opinion of you last month?
The danger of competitive comparison is that when the competition is weak, it can make you weaker, too. When you compete with yourself, as well as the competition, you will see their weakness as your opportunity to strike.
Tuesday, November 16, 2010
Implications: Last year, we put an office and a family room into the previously unfinished lower level of our home. Because of the stone fireplace, the flat screen TV, and bold floor tiles, friends started kidding me about having a man cave. But after I moved in, we turned the area that was my office into a place where my wife could do some quiet reading, scrap-booking, or some office work of her own (I often refer to my wife as the CFO of the household). In hindsight, the loft became her Mom Cave. I thought the idea was a bit unique… but it turns our we were just moving with others along a trend line.
What do you sell that might complement that place she calls her very own? Furniture, accessories, an i-Pad or laptop? How about DVD boxed sets, a book, or something tasty?
For every trend, there is a counter-trend… or consequential trends that sprout in all directions. This story was a fun reminder of that.
Implications: For years now, I’ve been using the term psychological entry fee to describe the underlying cost a consumer must pay—beyond price—in making a purchase decision. I might visit a fast food joint not because it is a great dining experience, but because it is familiar (I know it won’t be great, but it won’t be a catastrophe, either). I might switch gasoline brands without a thought… but changing healthcare providers can be a time-consuming task requiring some research homework. The entry fee for buying fast food or gasoline is quite low. The anxiety caused by picking an unfamiliar restaurant or choosing a healthcare provider might be considerably higher.
It seems to me that these researchers have offered empirical evidence of this anecdotal thinking. Everyone has their price, whether that be expressed as a dollar value, level of service, quantity, quality or comfort zone. What is your consumer willing to pay… and in what denomination?
Monday, November 15, 2010
Implications: There’s been a lot of talk over the past few years about how consumer priorities have shifted; among the frequently offered assertions is that people are more focused on saving money than convenience.
I contend that while people are more concerned about saving money, they are no less concerned about saving time. (Indeed, many wage-earners are working much harder for the same pay as they might have received a few years ago.)
Perhaps greater use of online tools is a reflection that both time and cash savings are important. Perhaps the change is because people have grown increasingly comfortable with technology and online shopping. What other motives might be driving this evolution?
Here’s another possibility worth considering: My wife and I started holiday shopping several weeks ago, hoping to spread our gift spending over several pay periods. Based on the traffic I’ve seen at the stores we’ve shopped, we’re not alone. More and more people seem to be shopping early this year, in order to manage the cost of the holidays more effectively. Does this earlier shopping commencement facilitate more online purchasing (as people don’t are less likely to suffer the anxiety of wondering whether an item will show up on time)?
Implications: While this story focuses on grocery stores and packaged goods, it is worth the read for almost anyone who works in a B2C business. Because it might help you consider whether you define quality the same way your customer does… or understand why price becomes a more important factor for some products than others.
Does your customer want the same things you think they want? When was the last time you compared both sets of priorities on a list (your beliefs and their realities), and reconciled the two?
Wednesday, November 10, 2010
Implications: The MD story offered very simple, sound advice. To take it a bit further, I would remind companies that every touch point between a customer and company is a part of the marketing process. How you greet the customer when they when they walk into the store, showroom or lobby. How your staff answers the phone. How the consumer is greeted when they land at your website.
Outside advertising is critically important. But so is the inside job.
Implications: Anytime you suggest that someone “Like” your company on Facebook… assume they will answer your invitation with this response: “Why should I?”
Is it because you’ll send me the “special of the week” as a status update? Or is it because you’ll be posting your monthly (analog, self-serving) newsletter online as a PDF file? Look… a lot of consumers realize that companies are simply using new digital technologies to distribute old analog advertising. And according to this RB story, consumers are reluctant to “like” more advertising from very many companies.
Consumers know that business is likely to see Facebook as a new marketing tool. But the consumer sees social networking as a way of staying in touch, sharing experiences, hearing from friends, and expressing their views. (Is your Facebook page consistent with the motives that drive people to Facebook?)
A church congregation is a social group. Employees in a workplace represent another subset of society. People who are passionate about freshwater fishing represent another collection of people who have something in common.
What aspects exist within your customer base that might reflect common interests, beliefs or passions… that are, in a way, a sort of social group? That might be the basis for a blog or a social networking campaign. But that people simply shop your store or dine in your restaurant is unlikely to be enough, in and of itself.
[Seriously… can you imagine this conversation actually taking place? “You shop at Bunky’s Supermarket? WOW! I SHOP THERE, TOO! We should start hanging out together!” Not likely.)
What are the common denominators exist among your customers? (Hint: What benefits do they seek when they buy what you sell? Or, what problem are they trying to solve with the purchase of your product or service?) In the answers to that question, you may find the basis for a social group.
Some folks think social marketing is entirely new and different from traditional advertising and promotion. But in this way, it is not: If your message is not relevant to the audience you're reaching for, you can't expect those consumers to respond.
Friday, November 5, 2010
Implications: The job market was adding positions through most of the summer, but those numbers were diminished by expected reductions in temporary jobs… like those involved with the Census.
150,000 new jobs is not enough, but it’s better… and a source of confidence to those of us who are focused on consumers, as well as a source of hope, perhaps, for those consumers who are still looking for work. After the campaign of nastiness that ended with this week’s mid-term election, I thought it would be a good idea to share a little good news.
Thursday, November 4, 2010
Implications: People could move to other fabric alternatives in the clothing they choose… when confronted with the prospect of higher prices for cotton garments. That states the obvious. But I’m wondering about other implications…
What impact this might have on clothing as a gift choice this holiday season?
Cotton is one of those rare products that is seldom challenged when referred to as “sustainable.” What other fabrics/clothing could emerge as an environmentally-friendly alternative? (Will people just bite the bullet and pay the higher prices for cotton garments?)
Wednesday, November 3, 2010
Implications: Good economy or not, we live in a mobile society… and I trust that some people have deferred their vehicle purchase to the point where they feel like it can be delayed no longer. Plus, in a world where so much is thought of as “beyond” the consumer’s control, a vehicle purchase can represent that “small indulgence” that makes folks feel better.
Either way, it’s proof that a company—or even an entire category—can do well in a weird economic (or political) environment.
Implications: Many of the observations offered in this trend briefing support the idea that many consumers have taken economic matters into their own hands. Fortifying their savings, planning to work beyond traditional retirement years, making greater use of digital tools, and considering the ROI of their higher education choices are just a few examples.
Always fun to share these trend-watching summaries when they become available. One might not agree with all of the thought… but use these reports to stimulate consumer trend thinking of your own.
Implications: More evidence that the web has matured from novelty to utility. How are consumers using technology tools in their consideration process for the product or service your company offers? Are you meeting them in that space, and speaking that language?
Observation: People remain frustrated and very much in a “trial and error” frame of mind. Two years ago, the Obama administration came in on a platform of change. When solutions were not felt fast enough—and economic matters are still not clear—that same wave of change has washed control of Congress to the conservatism. (But not control of the Senate.)
And we’ll be watching this same process resume again, in about a twelve months from now (when campaigning will likely be underway for 2012 elections.
Implications: Set your political opinions aside, for a moment, and look at this from a consumer's point of view. I’m looking at general numbers for a variety of races across the country, and at a glance, I’m seeing a deeply split and discouraged electorate.
First of all, the campaigning was particularly bitter, given the fact that this was a mid-term election. People feel like they’ve been through a lot with this economy, and we spent a lot of time hearing that all that work, effort and cost has been a waste of time and money. One would think all of these heated campaigns would have brought a majority of voters to the polls.
As of 3:00 a.m. this morning (Eastern), voter turnout was projected to be somewhere around 41.3%. Granted, more western states still had many ballot boxes uncounted at that time. But if it stands, I’d read that number to mean more than half of voters either didn’t like their choices, or they felt like they had something more important to worry about on election night. We'll hear a lot about a mandate (it's a popular word after every election), but at this writing, it's looking like we couldn't even muster-up a quorum.
Is that an inappropriate conclusion? Do people feel like Washington is unlikely to solve these issues, regardless of which party is in power? (That’s a good question: Consider the share of White House and Congressional control over the past decade… or, over the past two decades.) My hunch is that voter strategy right now is trial-and-error… and nothing they’re trying seems to work.
What does all of this lead to? I think voters (consumers) will continue to take financial management issues into their own hands… not waiting for some magical solution to come from Washington.
As a business owner, manager or marketer, that has important implications to you. Continue talking about the value you provide (not just the cost people must put into a product/service, but the enrichment they get out of it). Talk about the fairness of your price. Talk about quality of life. Talk about how you can reduce stress, offer simple truths, and save people time (so they can continue working harder than ever).
The election continues… and people will be voting with their dollars. What do your constituents, in particular, want?
Implications: This is not a new issue. I have written, recently, about the increasing tendency of banks to focus on “products per household,” as a means of retaining their clients; the more products a customer has with their primary bank, the less likely they are to change banks.
But this is different. The JD Power research cited by the article suggests that dissatisfied customers outnumber the incidents of customer attrition (among ISPs). Is that a sustainable situation? Where is the tipping point?
Bundling is supposed to increase sales for a company, and lead to greater convenience for their customers (one provider, one point of contact, etc.) But in this particular category, “bundling” could be leading to customers who stay with a provider in spite of the service or value received, rather than because of it.
Think about your most important customers—regardless of the business you’re in. Is your marketing model designed to simply to make it less convenient for customer to leave you? Or is you strategy founded on delivering value that would make them not want to?
Tuesday, November 2, 2010
Implications: The focus of the MD story is on political parties and on the mid-term elections occurring today, but it has me thinking about other aspects of the consumer’s life. The article hints at a sense of “equanimity” (being at peace with the moment) that might occur on Wednesday (once the elections have been decided).
I don’t think so.
I don’t think voters (consumers) are as dumb as most politicians (or political parties) might think. I’m quite sure consumers realize that both major parties had a hand in creating the current economic mess, and I don’t think voters believe the outcome of a mid-term election will cause a dramatic improvement in the situation. At risk of sounding like a negative Nelly, I’ll even suggest that voters (consumers) don’t expect the people who win today to fix the country’s woes.
But they’ll expect incremental improvement. They’ll expect elected officials to fix something.
When people are considering your product or service, what are they waiting for? What are they hoping for? Are they expecting a life-changing experience, or simply…
… A quiet date night on Thursday when they visit your restaurant?
… A simple explanation about how their cell phone connects to a car when they walk into your dealership?
… A clever meal idea that’s easy to prepare after work tomorrow?
Maybe it’s not necessary to be “all that and a bag of chips.” I think many consumers have dialed-down their expectations, as a by-product of the recent great recession. Perhaps the consumers you’re serving would be happy with simply a product or service provider that under-promises and over delivers in just one small corner of their lives.
Implications: I’m wondering whether this suggests that the first price cut led to signs that consumers would respond to the early sale prices… or whether it means they did not.
Perhaps there is indeed point where the consumer says, “Sorry, friend, but the Christmas season should not start in October.”