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Monday, April 30, 2012

Changes to health care spending

Observation:   Over the weekend, a story from the New York Times explained that health care spending is down… and more dramatically that the economic effects of the recession can be blamed for.  The article strives to explore a number of possible reasons for the decline; read the story by clicking here.

Implications:   If you sell any product or service that is related to health care, this issue impacts you.  We can anticipate that if the number of patients who are spending has declined—or the amounts they are spending have declined—the field of providers that are competing for those patients and dollars is going to be more heated.

So how can health care providers—and health care marketing—effectively capture their unfair share of patients?  Absolutely.  Start by looking at the product or service from the consumer’s (patient’s) point of view.  Follow the money trail, from consideration to admissions to pre-op to discharge.  As a story from NBC Nightly News suggested over the weekend, you might even look at the ceilings of a hospital room, to see what the patients see as they’re lying in bed!  (Click here to link to that video, or watch it in the viewer below.) 

The patient, above all, wants a successful outcome.  But on that journey, they’d also appreciate some empathy, responsiveness and authentic concern from the physician and support staff.  If you can deliver that experience, and explain your unique selling proposition in advertising (on-air, in-print, online), you’ll likely fare better than other providers who are competing for those same patient dollars.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

NBC News footage:

Wednesday, April 25, 2012

Surgeon and hotel collaborate for a package of nip, tuck, and tuck you in

Observation:  Today’s Springwise newsletter included a story about a plastic surgeon in New York that has partnered with a luxury hotel where patients can stay during recovery from their procedure.  Click here to see the story at Springwise.com.

Implications:   This story is a great example of focusing not on the practice (business), but on the patient (consumer).

Who could you partner with to build a package that is bigger than either of the companies, products or services involved?  Don’t start by thinking of your existing business contacts.  Start by thinking about your patient—er, customer—experience.  Ask what could make that experience (before, during and after) even better.  Think outside your company’s walls.  Then make the contacts to make it happen.

By the way… talk to your media and marketing vendors to see if they might be a source of some very smart partnerships.  After all, they’re talking to all kinds of business people every week!

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Healthcare providers get creative about collections

Observation:  Today’s New York Times includes a story about evolving debt collection practices used by various hospitals and healthcare systems.  Specifically, the article focuses on an investigation by Minnesota attorney general Lori Swanson into the practices of a company called Accretive Health.  Click here to see the story.

Implications:   As consumers read this story, surely they will be outraged at some of the tactics that are alleged.  (I must agree that it would be very disheartening to be greeted in an emergency room by someone who looked like a medical care staffer but who was really a credit services employee.)

At the same time, this article might be emblematic of a health care system that has become dysfunctional.  Private hospitals and clinics must do more than attract patients; they must attract patients who can pay.  Even those healthcare providers who are funded or subsidized in some way by the government or non-profit agencies are having a tough time making ends meet.

It is not my intent to start a conversation about the politics of healthcare, only to suggest that the mechanics of it—the business model—needs attention.  If you are a healthcare provider, could your dialogue with prospective patients (marketing) do a better job of explaining the mechanics of healthcare?  Would there be value in explaining the investment that has been made in staff, facilities, and years of training, in the interest of providing state-of-the-art care?  Should more marketing be done to attract “qualified” patients—patients who can pay—to off-set the number of unemployed or uninsured patients that a hospital might service?

There are too many questions to think that there is only one right answer.  But it appears that healthcare providers are prepared to consider just about anything.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Tuesday, April 24, 2012

Retirement planning, investing, likely to become higher profile issues for both young and old

Observation:  There was an interesting contrast in coverage on the topic of money management and planning for the future in this morning’s newspaper.  First, USA Today explained how Gen Y, generally speaking, is lagging a bit when it comes to financial literacy and personal money management.  Click here to see that story.

A few moments later, I came across a story from the Wall Street Journal that “does the math” and considers the implications of Social Security and Medicare funding that could run dry as soon as 2016, or 2033, depending on the benefits on is entitled to.  Click here to see that story.  

Implications:   The politics of this issue are sure to be given a higher profile in the coming months and years, but that’s not why I bring this issue up.  Consider the implications of an aging Boomer population that will soon be (if not already) drawing on Social Security and Medicare benefits… and a younger Millennial and Gen X population that is asked to pay more to fund these benefit programs at a time when they’re focusing on simply getting their own financial act together.  (In the end, I’m guessing that both an increase in funding and a reduction in benefits is in the cards, if and when Washington seriously addresses this issue.)

Ultimately, retirement planning is likely to be embraced as something each individual must worry about for him or herself, unable to anticipate that a government plan or program will be sufficient either for sustenance or healthcare needs.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Friday, April 20, 2012

Using digital to offer the right thing at the right time

Observation:  The Springwise.com newsletter is frequently a source of consumer-focused innovation, and this week’s issue did not disappoint.  It featured a story about one bookseller in Spain, who is offering a free sample—the first chapter of a book—via a QR code on in-train advertising.  Click here to see the story.

Implications:   Effective marketing focuses on a consumer with the motive, the means and the opportunity to commit a purchase.  In this case, the motive might be boredom during a train ride, and because most folks on a train are commuting we can assume they have the means (money) to spend on a book.  And opportunity is facilitated by the use of QR codes, which most smart phones are capable of reading with the download of a simple app. 

Think about your product or service.  What would be the best possible timing for you to deliver your message or invitation to a consumer?  Are you doing it?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Thursday, April 19, 2012

Younger women place more emphasis on careers, incomes

Observation:  A study from Pew Research indicates that younger women are placing more importance than ever on having a high-paying job.  The report got wide coverage today; you can click here to see the Wall Street Journal version of the story, or click here to see it as offered by USA Today.

Implications:   The role of women in the workplace began to evolve, en masse, in the early- and mid-seventies.  These Pew Research findings make the case that that role continues to evolve.

My question is, if she is playing a greater role as breadwinner, is he sharing more of the role as household operator?  How do these changes in employment priorities alter the idea of “consumer” at the grocery store?  Doctor’s office?  Car dealership?  Your company?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

De-leveraging process has made progress

Observation:  A story that will appear in tomorrow’s New York Times (available now at the NYTimes.com website) suggests that U.S. consumers and lenders have made tremendous progress in cutting debt.  A graphic illustrates just how far and fast credit liabilities and fallen, and the main story explains that while consumers deserve much of the credit for their self-imposed austerity, lenders, too, have speeded the process along with the amount debt that has been written off in the form of losses.  Click here to see the full story.

Implications:   During the recession of 12/2007 through 6/2009—or in the several months that followed—many pundits (and perhaps many families) wondered whether the U.S. economy could get out from under its considerable personal debt. 

It would appear that there is light at the end of that tunnel.  And that’s good, since the economy is fueled so heavily by consumer spending; spending that does not happen when consumers feel fear about their employment future or the pressure of outstanding debt.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

A primer on harnessing social media

Observation:  Today’s McKinsey newsletter focuses on social media and marketing, and specifically, taking the mystery out of the medium.  It is a long but worthwhile read, and you can click here to get started.

Implications:   The most important aspect of this article is offered early... That social media might still seem ambiguous to many company owners or CEOs, but it has become too big to ignore.  (As the newsletter puts it, if the population of Facebook were a country unto itself, it would be the third largest country on the planet behind China and India.)

Just as important, McKinsey is working to link the consumer’s behaviors and buying process to illustrate which touch-points might be influenced by social media.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Talking less but communicating more: How are your consumers using their smartphones?

Observation:  An interview with Ewan Duncan from McKinsey appeared in yesterday’s Marketing Daily, exploring the distinct ways that younger consumers are using their smartphone devices.  Duncan refers to the devices as “digital Swiss Army Knives,” and reminds us that talking on the phone is just a small part of the tool’s value.  Click here to see the story.

Implications:   Duncan’s remarks remind us that digital marketing is not a one-size-fits-all-demographics proposition.  The digital divide is alive and well, not just among those consumers who have or do not have access to computers, iPads or smartphones, but also in the way that different cohorts might use those devices.

Considering the way your most important customers (or prospects) are using their digital devices, is your web presence optimized to fit their technological comfort level?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Wednesday, April 18, 2012

A conversation about protecting competition

Observation:  A story from today’s New York Times—or perhaps it would more appropriately be called a near-editorial—explores the complex relationship between innovation, competition, and regulation.  Specifically, the article focuses on price-fixing allegations in the e-book industry.  Click here to see the story.

Implications:   This is a worthwhile read because so few of us are immune to the forces of disruptive technology. 

What companies could step in from the fringe to steal share from your long-secure revenue sources?  Could it be that the best way to protect yourself from that new competition would be… to make that move first?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Cutting the cord… at the legislative level

Observation:  More and more consumers are living in a wireless-only household, with no land-line phone coming into the home.  According to a story in yesterday’s USA Today, many states have passed or are considering bills that relieve phone companies of the requirement to offer land-line service in all residential areas.  Click here to see the story.

Implications:   If not immediately, it looks as if—eventually—the home phone line will join the ranks of the payphone as historical artifacts.  Phone numbers have evolved from residential to personal items.  And why not?  I can do lots of things from my smartphone, including check sports score, do my banking, see if my couch sold on Craig’s List… and even ask my voice-controlled assistant to find a nearby restaurant for me. 

In comparison, my home phone is stupid.  And fired. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Tuesday, April 17, 2012

Spring—and trends—give real estate sector reason to be optimistic

Observation:  An Associated Press story suggests that real estate prices have bottomed-out in many areas, started to climb in others, and that a hint of optimism is in the air for the category.  Click here to see the story as it appeared in the Dallas Morning News website.

Implications:   Housing influences so many things… from home furnishings to home improvements and repairs, and much, much more.  Even just some stability in prices could lead to stronger performance in a lot of categories.  Really glad to see this!

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Lots of folks skipping lunch (or bringing it in a bag)

Observation:   Yesterday, I wrote a story about the idea that some consumers are starting to indulge again; now, I’m sharing an article suggesting that fewer people are going out to lunch.  It appeared recently in USA Today (click to link).

Implications:   The USA Today story isn’t just about people who are cutting back, financially, on their lunch expenditures (although that is one reason that some folks are lunching less).  The stronger focus of the story is that people are feeling time-stressed, and don’t always want to take the time required to sit-down for a decent lunch meal.

I find that ironic in a world where we can get phone calls, emails and documents delivered almost anytime, anywhere.  This issue graphically illustrates just how busy we think we have become.

Whether you’re a restaurant, or any other product or service category, are you doing anything that helps consumers save time?  Do you deliver?  Can I order online?  Using my smartphone?  Lots of people will decide on lots of purchases in the coming year… with the hope that, really, they are buying time.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Monday, April 16, 2012

Millennials: A segment filled with trends and counter-trends

Observation:   Many demographers and trend watchers—me included—have long-held that Baby Boomers are a group too large and diverse to be stereotyped into a single behavioral group.  Likewise, a story in today’s Marketing Daily suggests that there are up to six distinguishable cohorts with the generation we refer to as Millennials.  The article is based on a study by the Boston Consulting Group, and you can click here to see the story.

Implications:   When talking about advertising, some companies will identify their target as Women, Adults 25-54, or some other such over-generalization.  Even narrowing the concept to Boomers, Millennials or another life stage might be too broad.  Often, consumers are defined by a passion, a values system or other criteria.  Putting everyone into a single target group because of the year they were born, exclusively, might not be the best approach.  Age might be coincidental to a group, but it may not always be incidental to a purchase.

What else can you know about the heavy users of the products and services you sell?  Beyond gender, age, or life stage… what matters to them?  What are they worried about?  What gratification would they like to enjoy or what problem would they like to solve through the purchase of what you sell?  Answer those questions, and age will soon become less important. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Frugality fatigue drives some consumers to trade-up

Observation:   A recent story from Bloomberg suggests that consumers have had enough fiscal conservative, and they’re ready to indulge a little bit more.  The story cites research from Britt Beemer’s America’s Research Group and other sources… and you can click here to see it.

Implications:   This article correctly points out that, for most people alive today, the past four to five years have been the longest period of fiscal restraint they have ever had to place on their family budget.  While the recovery seems a bit drawn out and perhaps even still “at risk” on some fronts, some folks have had enough.  They’re ready to choose the car with a few more options, the entrĂ©e that is not on the discount menu, or the mobile phone that’s just a little bit smarter with more options.

Does your company offer a more upscale alternative?  Have you placed that product or service in a higher profile position, lately, and invited the consumer to indulge?  After all, it’s been too long… and some customers might be ready to see and hear the kind of messaging that moves them back to their favorites (instead of the cheaper alternatives they’ve been settling for over the past few years).

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Friday, April 13, 2012

Free sample: The power of product trial in an age of wary consumers

Observation:   In the wake of economic turmoil, many consumers remain more careful about the way they spend money.  So what’s a new product to do, at a time when consumers are not in the mood to “roll the dice” on a product or service they aren’t familiar with?  Some ideas are offered in this story from NRF Store (click to link).

Implications:   While focused on the grocery and packaged goods industry, the tactic of free samples might be a wise thing to consider for almost any product or service.  When a consumer can experience your brand first-hand, a first purchase is less of an experiment and more of a sure thing, which is important at a time when folks are still seeking known value for each dollar spent.

The freebie need not be lavish or extreme... just enough that the consumer can feel confident about committing dollars to your product or service offering.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Thursday, April 12, 2012

How mobile phone owners are using their device in the shopping process

Observation:   Today’s IAB newsletter linked to a worthwhile e-Marketer story about the ways consumers are using their mobile devices, ranging from pre-shopping research to surfing for more information while in-store… ranging from additional product information to competitive pricing.  The article is based on information from Leo Shapiro and Associates, and you can click here to see the full story.

Implications:   This story is strong because it doesn’t just tell us what people are doing (using their mobile device as they shop), it sheds some light on how they are doing it.  That’s important, because I doubt mobile devices will be leaving the shopper’s toolbox anytime soon.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Wednesday, April 11, 2012

UPDATE: Do consumers prefer online or in-store?

Observation:  A Research Brief story this morning asserts that consumers prefer online over in-store shopping.  Click here to see it.

Implications:   I fear that the data cited in the RB story does not go far enough; or perhaps it gives a right answer to the wrong question.  As I’ve been discussing in recent posts, the consumer does not necessarily want to choose between online or in-store.  They want multiple channels available to them, and they want to use the channel that suits them best at any given moment.  If the purchase is a no-brainer, they want to get it done fast.  If the item is one of complexity, they want to hold the product in their hand, and perhaps talk to someone knowledgeable about that product.

Blanket statements can get you into trouble.  Consumers purchase preference are likely to depend on the personality of the buyer, the personality of the product, and the circumstances which bring the two together.

[For more on this matter, see “Target:  Showrooming” from 4/5/12, or “Showrooming” from 3/2/12.]

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

For web consumers, velocity is critical

Observation:   A story from today’s Marketing Daily illustrates just how important speed can be in the mobile or traditional web experience.  Click here to see the story.

Implications:   The temptation for many traditional marketers is to drone on and on about the color, texture, service, selection, horsepower, history… all of which can be nice, but which are often lost on a consumer that is long gone to a faster site.

How quickly can your company communicate value?  How effective are you at focusing precisely on the benefits that a consumer wants to gain? 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Tips on Pinterest

Observation:   I’ve written some posts involving Pinterest before (see “Very Pinteresting” from 4/2/12), but this morning’s Marketing Daily features a story with some tips about how newcomers (including businesses) can become acquainted with it quickly, and share their business via the site.  Click here to see the story.

Implications:   Again, Word-of-Mouth can be an important aspect of your overall messaging.  Marketers need to consider the distinctions between the media resources that are paid, owned and earned.  Your paid media might include television, radio, newspaper, outdoor, digital display, and SEO/SEM.  The media you own might include your corporate report, brochures, point-of-purchase, a direct mail, SMS or email list—and of course, the new granddaddy of them all—your website. 

The media you earn includes the things people say about you, your company, your product or your service.  If you are invited to be a guest on a talk show as an expert in your field, that’s earned media exposure.  If someone talks you up on Facebook, that’s earned media.  If someone “Pins” an image and/or recipe they found on your website, that’s earned media.

A marketing budget should include consideration to each of the three messaging weapons:  Media that is paid, owned, and earned.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Tuesday, April 10, 2012

Teen birthrate lowest in history

Observation:   A story in today’s USA Today explains that the birthrate for U.S. teens is the lowest it has ever been.  Click here to see the story.

Implications:   I’ve been doing some intense study, lately, on the changing look of the American family, so this story naturally caught my eye.  In past writings (see below) and soon-to-be-published material, I’m doing my best to understand how the family as we know it is evolving.

One important aspect of this evolution is that more babies are being born to un-married moms.  But this USA Today story suggests that’s not because of unplanned pregnancies among teens; on the contrary.

Any company that sells to families should be abreast of how families are changing.  Stay tuned.

[To see more on the changing family dynamic, see “Welcome to the (non-traditional) family” from August, 2011, and “More on the changing composition of the American Family” from February, 2012.]

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Food service returns as show- and sports-venue revenue stream

Observation:   According to a story in today’s Marketing Daily, food service has made a comeback at sports facility and other entertainment venues.  In fact, spending on food has returned to pre-recession levels at many facilities (according to the study by Packaged Facts that was cited in the article).  Click here to see the story.

Implications:   During the great recession, many consumers “traded down;” choosing less expensive alternatives to the products or services they were accustomed to.  In some categories, that may have meant going to the show or game, but bringing some snacks from home or stopping for dinner before the game. 

That in-venue food consumption has resumed its role in the entertainment experience is another indicator that consumers have gone back to abnormal.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Degrees of success compel retailers to make changes in self-service checkouts

Observation:   A story from USA Today indicates that several retailers are making changes to their self-service check-out strategy.  Some report significantly higher shop-lifting in the lanes, and are either installing more sophisticated systems to help thwart that shrinkage, and others are removing the lanes entirely.  Click here to see the story.

Implications:   How do you feel about the self-service line?  Some folks are delighted to have a lane that is often faster… but I’ve talked to others that think they’re doing some of the store’s work without being compensated with higher savings for the lower degree of service.

More importantly… how do your customers feel about the balance of service, swiftness and convenience that you offer?

It can be impossible to please everyone all the time, but the more options you offer, the  more people you will please.  And if you must make compromises, focus on pleasing those people who buy lots of what you sell; the heavy-user target consumer that makes or breaks your business.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Gulf seafood regains “comfort food” status

Observation:   Gulf of Mexico seafood producers were among the hardest hit by the effects of the BP oil spill of 2010.  But a story from Supermarket News suggests that many consumers are once again comfortable with eating goods from the waters of the Gulf coast.  Click here to see the story.

Implications:   If you run a restaurant or a grocery store, this story might lead you to add more Gulf products to your menu… or if you’ve already done that, it might lead you to bring more attention to those offerings.

If you run any other kind of business, it should serve as a reminder that trust lost is not easily regained; the BP oil spill happened almost two years ago, and there has been little bad news on that front since the well was successfully capped.  It has taken all of that time—with little or no bad news coming from the Gulf—before some categories could finally show a comeback.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Monday, April 9, 2012

If families don’t look the same, should your research?

Observation:   Quirk’s is a trade publication for the research world, and today they featured a story about the changing decision dynamics that exist in many families.   It’s worth the read, and you can see the full story by clicking here.

Implications:   This is a fascinating article because it invites the reader to consider decision styles.  Once upon a time, decisions were made by the head-of-household (or heads-of-household).  Today, children often collaborate in the decision process at the invitation of their parents.

But it is not just the generational shift that is important here (the article compares War Baby parents (those who gave birth to the Baby Boomer generation) to Baby Boomer parents (those who gave birth to the Millennials).   It is not just a decision style that makes these cohorts different:  It is the composition of the family, itself.  (See “The changing composition of the American family,” February 20, 2012, or “Welcome to the (non-traditional) family,” from August, 2011.)

Advancements in technology should be reason enough to reconsider your approach to consumer research.  But when you add to that issue the fact that there are more single parents, blended families, un-married co-habitant parents, and multi-generational households… updating your consumer insights strategy becomes imperative.  (Is it good enough to talk to just "Mom" when her children might participate in a significant share of the decision?)  It seems to me that it would be difficult to have a decent conversation with families that have evolved... if you are using a research approach that hasn’t. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Consumers accelerate car sales in response to higher gas prices

Observation:   Once upon a time, the high price of gas contributed to a slowdown in vehicle sales.  This time around, it seems, higher gasoline prices are prompting consumers to trade in their older vehicles for something newer and more fuel-efficient.  That’s according to a story in this morning’s USA Today.  Click here to see it.

Implications:   We’ve been anticipating the effects of higher gas prices for a long time, now.  A more expensive commute could cause some consumer to spend less in some discretionary categories (like entertainment, out-of-home dining, etc.), but more in others (automobile sales and service, energy-saving home improvements, etc.) 

How are higher fuel prices impacting consumers when it comes to your product or service?   How will you message to the consumer so that a purchase with you is one of the last things they delay or defer?  Is there a way you can position your offering as a higher priority, when compared to other discretionary purchases?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Friday, April 6, 2012

UPDATE: Emerging adults

Observation:   For quite some time now, we’ve been following a trend that could be classified as multi-generational households, or if you prefer, emerging adulthood (links to some of those stories appear at the bottom of this post).   

Today, another story on the topic was published by Research Brief, and it sheds more light on both the benefits and frustrations associated with adult children who return to their parents’ home, or never left.  Click here to see the story.

Implications:   In a conversation with one of our clients this week, we were talking about the potential that could exist among consumers in this category.  People who have returned home—or never left—might be benefiting from housing at very low rental cost, or at no cost at all.  That means any income they generate is much more discretionary than the money held by someone who rents or owns their own place.

Think about it:  What would you do if you could skip your next five or six mortgage or rental payments?  There would be more money for travel/vacations, restaurants and nightclubs, cars, home and personal electronics (from cell phones to tablets to gaming), and more.  Further, it is likely that this group of twenty-somethings (and some thirty-somethings) will be a part of any future real estate market recovery.

Think twice before you ignore or overlook this potential pool of discretionary income.

[For more on this topic, see “Return-to-nesters” from 11/4/11, “More people under one roof” from 5/5/11, “Multi-generational households” from 4/15/10, and “Emerging adulthood” from 1/5/12.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Thursday, April 5, 2012

Target: Showrooming

Observation:   About a month ago, I published a post on the practice of Showrooming, where consumers shop at a bricks-and-mortar store but then make the purchase online (see “Showrooming,” March 3).

This morning, friend and colleague Matt Sunshine shared an article from the Harvard Business Review blog that explains the position that retailer Target is taking on the practice.  Click here to see that story.

Implications:   The HBR blog post is very good… but I’m thinking the comments section that follow the story are even better, as consumers and business people alike suggest ways that Target might combat online competitors who sell for less (due to lower overhead). 

One suggestion that wasn’t made (until we made it) is blurring the line between a bricks-and-mortar and their online counterpart.  Why not have a set of business card-sized instructions—along with a QR code—that blatantly engages the consumer on the showrooming phenomenon:

“If you need some time to think it over, and you’re considering doing a little online research, please start your search with OurStore.com.  When you enter this promotional code, you’ll get (discount, gift with purchase, free shipping, other incentive).” 

The promotional or QR code would help the company track where the product engagement began, and help them develop an even better bricks-and-mouse relationship.  Versions of the card (or code) could be handed-out by store salespeople, too… so that if the seller is helping drive online sales, they could be rewarded with cash or redeemable points of some kind.  As a retailer, Target should not care whether the purchase is made in-store or online… only that it is made with Target.

Could “showrooming” be impacting your business?  In what ways could you exploit the practice?  (Exploiting can be much more profitable than complaining.) 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Wednesday, April 4, 2012

Ally Bank gets behind financial literacy campaign

Observation:   I was struck by an article in today’s Marketing Daily explaining the elements of a financial literacy effort that’s been launched by Ally Bank.  Click here to see the story.

Implications:   Having had the chance to interview several banking executives over the past few years as part of our Industry Insights initiative, I know that one topic that is forefront to the banking industry is relatively sparse presence of young customers.  Here’s what I mean:

Younger customers, at worst, have learned to live and manage their finances without the (consistent) use of a traditional bank.  Banks are now competing with car dealerships for car loans, home improvement stores for home improvement loans, insurance companies and employers for long-term investment options, and check-cashing services and for those times when folks just want a little cash.  Competition is coming from everywhere.

Many younger customers, at best, have automated their banking relationship to the point where no real “relationship” actually exists.  They use direct deposit to manage their paychecks, automatic or online bill paying instead of writing checks, and ATMs as a place to grab a little cash.   The good news:  Banks have created a very cost-efficient operating model that requires little or no human intervention and overhead.  The bad news:  Banking service has become a commodity, rather than a relationship to be built on.

The reason I bring this up?  The Ally Bank effort must almost certainly be aimed at this millennial- and middle-aged consumer segment.  (At least for now, you’re not targeting seniors if you’re using Twitter.) 

Will the next generation of consumers use your company, products or services in the same way the last generation did?  What adjustments could you start making now, for consumers that have adjusted their habits when buying in your category?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: GM re-thinking their approach to millennials

Back in March, we offered a post about how millennial consumers think differently toward automobile ownership than earlier generations.  It was based on a story in the New York Times (See ESE “Letting younger consumers drive,” March 26.)

Additional coverage on the topic was given by today’s Marketing Daily; click here to see the story.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Tuesday, April 3, 2012

Recovery, now 33 months old, continues to have strong points and soft spots

Observation:   An article in today’s New York Times reminds us that just as the recession did not treat everyone equally, the economic recovery has both favorites and underdogs… driven by employment, geography, and industry category.  Click here to see that story.

Implications:   If you’re a business owner, manager or marketer, it remains critically important to tune-in to the customers you serve and aspire to serve—locally—more so than you focus on the national headlines of the day.  Just as the headlines out of Wall Street and Washington tended to be overly gloomy as we entered recession back in late 2007, the national news can be misleading during the recovery; while the country, as a whole, is gaining economic momentum, there are parts of the U.S. that are not feeling the upswing as much.  Further, because we are approaching an election, candidates are extremely critical of the current economic climate, and incumbents tend to be extremely positive about it.  Reality often lies somewhere in between.

In what ways can you determine how your local customers are feeling about their future prospects?  Could it be as simple as walking around the store, lobby or dealership… and asking folks how they’re doing?  Or might you pay closer attention to products and services you sell that are related—either directly or indirectly—to things like employment, the price of gas, or other household spending influences?  Could it be that a little primary research is in order?

Consumers can be a great source of information.  And they’re a source that’s very close to your cash register.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

From mild distraction to “very Pinteresting”

Observation:   A story from yesterday’s Marketing Daily newsletter explains that Pinterest—a relative newcomer to social sharing—is beginning to play a serious role in the way that consumers are influencing each other… and companies are starting to take notice.  Click here to see the MD story.

Implications:   Word-of-mouth has long been the omnipotent form of endorsement advertising, as one friend tells another about the positive attributes of a product, service or experience.  Through testimonials, many companies have used word-of-mouth even in their paid mass media.  At its root, whether you’re talking about Pinterest, Facebook or any other social site, social marketing is about giving customers something to talk about… in a favorable way.

Also interesting to note:  Pinterest seems to be the most fun when participants are sharing “person-to-person,” rather than when someone pins a business entity to one of their boards.

Pinterest facilitates word-of-mouth.  Have you done the same?  Before you launch a social marketing campaign… ask yourself whether you’ve launched an experience or product that’s worth talking about.  Someone once shared this simple bit of advice on the topic of successful social marketing:  Before it can be marketing, it must be social. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Monday, April 2, 2012

“Hold it… I think my phone has a coupon for that”

Observation:   Today’s Research Brief includes a story suggesting that people who use digital coupons spend both more time and more money when shopping.  Click here to see the story.

Implications:   Couponing used to be thought of as the activity of people who have more time than money.  This Research Brief story—based on findings from GfK and Coupons.com—reminds us that people who have money (enough to buy computers, iPads and smartphones, anyway) still like to save money.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

The problem with pleasing customers

Observation:   According to a recent report by Forrester, when you exceed a consumer’s expectations, that level of satisfaction becomes the new minimum expectation.  That’s according to an article in today’s Marketing Daily newsletter.  Megan Burns of Forrester is quoted as saying, “People get used to a level of service very quickly, so you’re constantly shooting at a moving target.”  Click here to see the story.

Implications:   In this day and age, standing still is the new falling behind.

This story suggests that companies should constantly be asking (consumers) how they can do even better.  And as a collection of service or satisfaction improvements is developed, it might be wise to roll them out incrementally, so that the consumer notices.  If you bring a huge collection of improvements to market all at once, it might leave the consumer asking “what have you done for me, lately” just a few months down the road.

Are you innovating to the point where you have something new to offer and talk about frequently… as the customer expects?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.