Vacations, re-defined (or just re-labeled)

Observation:  Two stories from today’s Marketing Daily suggest that family vacations look different than tradition might suggest.   The first article focuses on the now-cliché stay-cation, caused by higher gas prices and airfares.  The second story gives us a new term to consider, the near-cay. 

Implications:   Whether you call them stay-cations, day-cations, or near-cays, the point is essentially the same; consumers would rather spend money on experiences than on getting to those experiences.  They’d rather find attractions that are close-to-home, and then put their money into activities and entertainment instead of gas pumps and airlines.

No new terminology needed, as the old word works well:  Value.  And this is a great example of where the word “Value” doesn’t necessarily mean “lower cost,” it just means more enjoyment received.

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

Searching for simplicity: Consumers want technology to make life easier

Observation:  Citing a study by Ketchum, a story in today’s Marketing Daily suggests that consumers want technology make their lives easier.  Click here to see the story.

Implications:   It might sound like this report is stating the obvious, but the fact of the matter is many companies have completely overlooked this one simple request of the consumer.  We tend to think of innovation as adding another feature, or more bells and whistles… when the reality is that the best innovation can occur when we take something away.  Think iPod (reducing the many buttons and controls of previous music players to a single button and a dial).  Think Jiffy Lube (reducing the previously complex process of taking your car in for service to a ten-minute, oil-change-only experience).

Is your website filled with bells and whistles?  Or does it simplify the relationship between you and your consumer?  How about the in-store experience?  Would the best innovations mean adding some elements, or taking some away?

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

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.

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.

Generational Economics: The Age of Increased Equity

Marketing Observation:  Draw an arbitrary line around that segment of the population that begins at around age 45 and runs up to around age 59.  This is the Age of Increased Equity.  Why do I make that assertion?

In this life stage, there is a very good chance that the careers in a household are very well established.  People in this age group are often earning at a higher level than at any other time in their lives.  (Of course, some households have had to adjust that relative income due to recession-related job loss.)  Still, many people in this life stage are working in professional occupations (doctor, lawyer, engineer), as upper managers and executives, or have been in a blue-collar job long enough that they could be called, “Blue Chip Blues.”   

Meanwhile, this pinnacle income is happening just as the fixed expenses in their lives are beginning to fall.  Think about this combination of events:  By now you have a solid career, lots of experience, and you’re probably earning more money than ever… and it’s happening just about the time you’ve pared-down your consumer debt, kids are leaving home, and you may even be close to paying off your mortgage. 

True, there is probably college tuition to worry about, and helping young adult children get their feet on the ground… and a lot of folks in this life stage are starting to realize they have some catching-up to do with their investments and retirement savings.  But each of these expenditures is nonetheless, “discretionary.”  That’s the best way to describe the Age of Increased Equity.

Marketing Implications:  Life for many people age 45-59 looks a bit different today that it did just five or six years ago.  Their post-recession realities have them revisiting how much equity they have in their home and other hard-earned investments.  (A lot of us have some catching-up to do!)  They’re helping adult children get on their feet under economic circumstances that seem more difficult than when they themselves were that age.  (I don’t mean to speak for all Baby Boomers, but when I reminisce, I’m more inclined to think of things like the moon landing and rock & roll, rather than the oil embargo of the mid-seventies and the stagflation of the late 70s and other woes.) 

Few people age 45-59 were born into technology… they’ve had to adapt.  They’re competing with a younger labor force that has never known a world without the personal computer.  They’re likely to plan on working longer to compensate for shrunken investments and the fear that social security won’t survive their full lifetime.

In spite of all the challenges they face, the Age of Increased Equity has earned the right to indulge.  Nicer cars.  Nicer homes.  And not just travel… but experiences.

Is this a group you are (or should be) selling to?  Have you stopped to think about—or better yet, talk to them about—what their preferences and priorities are?

Mike Anderson, for The Marketing Mind consumer trends blog, service of The Center for Sales Strategy.  

The science of shopping is changing

Add-on sales were once the name of the game; get people into your store, and then get them to make spontaneous purchases… beyond the item they came in to buy.  But with fewer people looking at shopping as an entertainment alternative, those up-sells are increasingly difficult to create.  That’s the premise of this recent story from Bloomberg, citing input from ShopperTrak.  Click here to see it.

Implications:   In a world where people are doing less casual shopping—and purchasing with greater intention—what can you do to make your store, dealership or lobby a primary destination?  Does your messaging compel the audience to consider you first?  Have you talked with your selling staff about working harder to include accessories, maintenance and other complimentary purchases to the core product or service?  Is your in-store experience so positively memorable that people will make you an exception to the rule as they do less "traditional" shopping?

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

"Me, too!" versus iPad: Why Apple wins.

Former colleague and continuing friend Todd Storch sent me this story from The Business Insider (click to link).  It offers some great thinking about why, even in a stressed economy, so many people will pay a premium for Apple’s original.

Implications:   The iPad is not just a device, it is also a facilitator.  It helps the user accomplish… catching up on the news, playing a game, reading a book, using an app.  And contrary to popular convention, it does it without adding more bells and whistles; their current campaign explains that the iPad is what happens “when technology gets out of the way.”  (See their current ad in the video box below.)

Could your company benefit from some innovation?  Instead of thinking about what to add, ask whether your offering might be improved by taking something away.  Being intuitive—anticipating what the consumer wants—is the path to profitable innovation.  And it’s what can keep any company, product or service from being seen as a commodity.

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

Disney reaches out to kids... on arrival

An interesting story in today’s New York Times cites the company’s maternity-ward marketing efforts in suggesting it’s never too soon to approach a new prospect. Click here to see the story.

Implications: Disney knows moms will greatly influence the formative years of their children. Why not build an alliance with that influence… before channel selection and favorite characters are decided by the infant?

Ironically, in their teenage years, it will be these kids who are more likely to influence the purchase behaviors of their moms! (Mobile phones, video games, places visited, etc.)

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

A new twist on "Experiential Philanthropy?"

Over the past several years, I have noted frequent examples of something we refer to as Experiential Philanthropy: When someone gives of their time or talents, rather than (or in addition to) making a financial donation to a worthy charity.

In this week’s Springwise.com newsletter, I saw what might be another example of this hands-on contact with worthwhile causes: Tours of London… conducted by the homeless. Click here to see the complete article.

Implications: Move over, tourist attractions. People’s move toward authenticity in response to the recent recession could have an impact on destinations from Big Ben to Mickey Mouse.
Consumers are increasingly in touch with reality.

Are you?

Can you contribute to the realism consumers are increasingly after?

Mike Anderson

My opinion: A smart use of email marketing

Last night, I was flying from Atlanta to Minneapolis, and learned of a special “holiday gift” from Delta Airlines, Google Chrome, and GoGo in-flight internet service: Free Wi-Fi on this flight. So I fired-up the laptop and started working… free, except that I had to give GoGo my email address during the registration process.

Today, I received a very simple email from GoGo, with “Receipt” in the subject line of the message. It showed a table like this:

$12.95 for In-flight Internet Service
-12.95 for promotional discount
0.00 Sales Tax
-------------------------------------
$0.00 Total Cost (Happy Holidays!)

Implications: This was a smart way for GoGo to get me (and thousands of others, I will assume) to try in-flight Wi-Fi. Some people will pay to use the service in the future, some people will not. But I loved the way GoGo didn’t just give me value. They reminded me that they gave me value! (No harm in that, is there!?)

Next time I need to get some work done when I'm in the air, will I remember how easy logging-on to the plane's Wi-Fi system was? Absolutely.

Mike Anderson

A healthy future for restaurants?

A lot of restaurant companies are trying to figure out how to re-build their revenue after so many customers cut-back on out-of-home dining in response to the great recession. If you’re among them, this story from Marketing Daily might appeal to you (click here to link).

It suggests that tactics like “bundling” or a more health-conscious strategy could enhance and accelerate the industry’s comeback.

Implications: A lot of family casual and other sit-down restaurants are wondering how they can regain market share they lost to fast food joints during the recession. I was challenged to a debate on the topic last week while working with some marketing executives in west-central Florida. A couple of folks thought that price points might be the way to win customers back from the fast food competition. But I don’t think “cheap,” in and of itself, is a sustainable position for most full-service, sit-down restaurants. Certainly, “cheap” does not make a restaurant distinct… so it does not classify as a unique value proposition.

Service, flavor, ambience… these are things that a more sophisticated or specialized sit-down restaurant can deliver more consistently than a fast food restaurant (my opinion). Perhaps healthy dining (like that explained in the Marketing Daily story) is another way for more complex cafes to regain share that was lost to fast food places.

If you’re a full-service, sit-down restaurant, why should I come back to you? What is it that I (as a former customer) might miss about my visits to your café? Are you seasoning your invitation to me with that kind of flavor?

If you’re a fast food restaurant, how do you defend against the inevitable competition, as your sit-down counterparts decide to romance the customers you gained during the recession?

Mike Anderson

Getting away makes a comeback

As Labor Day weekend approaches, I’ve seen two stories that suggest vacation cutbacks are starting to show signs of relaxing, for a change. The first was in a New York Times story from last week (click here to see it), and another came in yesterday’s Media Post Marketing Daily (here’s the link).

Implications: Whether by cutting the number of attractions, reducing the length of a trip, or by downgrading the hotel a notch or two, consumers are finding ways to get away. In a sense, the consumer seems to be re-considering what’s important about a vacation (what are the essential experiences/outcomes), just as they are re-evaluating many of the other purchases they make. For some, this right-sizing might mean going from foreign to domestic, from a cruise of five days rather than seven (or 3 instead of 5), or from an extravagant adventure to an interesting voyage.

I recently discovered a new canoe shop a few miles from my home, which offers complete outfitting services, including a shuttle to-and-from the beginning or end of your canoeing expedition. They promote the trip as a “day-cation” (a now-popular term for anything that can be used as an alternative to a multi-day vacation).

If your company serves food, fun, or even an hours-long escape… you should consider (and promote) yourself an economic alternative for folks who want fun… and frugality.

Mike Anderson

Taking the social muse out of museums

Once upon a time, it could have been easy to think of museums as a little bit “high-brow”—if not downright snooty—centers of culture. But according to a story in today’s Wall Street Journal, museums are starting to look at themselves the way Mr. and Ms. Middle America might… and it’s leading to some cultural change in the category. Click here to read the WSJ.com version of the story.

Implications: Whether attributable to the advance of Gen X and Gen Y, or perhaps in response to the changing economic climate… it just makes sense that “Cathedrals of Culture” become a little more main-stream in their approach to woo visitors and supporters.

I suspect that museums will not be the last category to benefit from a little down-to-earth self-evaluation.

Mike Anderson

Vacations close-to-home

In today’s Marketing Daily, there was a story about so-called “day-cations” and “stay-cations,” suggesting that a significant number of families still favor day-trips to local attractions, or using their vacation time to stay close-to-home. Click here to see the story.

Implications: This story reminded me of another Media Post article I read back in May, which explained how Macy’s was attempting to position its stores as a “tourist destination” to be explored, not just a department store.

Could you do the same? If you run a restaurant, a theme park, a professional baseball team, a day spa, a night club… you might offer an affordable alternative to a more elaborate get-away. The key, of course, is to be realistic (don't compare a stop at your specialty coffee shop to an exotic voyage to Tahiti). Instead, present your offering as a well-deserved reward; a small indulgence that can be easily justified after a recession-long period of self-denial. “If you can’t have _______ this year, you AT LEAST deserve to enjoy _______.”

Closing thought: Don't focus on the product or service you sell. Focus on the experience or benefit the consumer will enjoy.

Mike Anderson

Simple problem, digital solution

My wife and I were walking through a department store at Mall of America last week. Oddly, if you go in at the main entrance, you have to walk through the cosmetics and fragrance department (primarily aimed at women) to get to the men’s department on the same level.

As is typical on a Saturday afternoon, the store was offering a free make-over, giving consumers a chance to try-before-they-buy, and giving the store greater odds at making a sale. I asked my wife if she wanted to indulge while I shopped for the items I was looking for.

“No way,” she said. “You never know what some of those brushes and applicators have come into contact with.” Being an ignorant male, I hadn’t thought of that. (I don’t use make-up, so how would I know?) Turns out plenty of women have the same concerns. (And many are uncomfortable with having anything to do with make-up done in public.)

Out of sheer coincidence, a cool new product demonstration device was featured in this week’s issue of Springwise. It’s a mirror designed to be used at the cosmetic counter, which takes a digital photo of the customer, which can then be treated—virtually and hygienically—with samples of the make-up the store is selling. (To see the story about EZ Face, click here.) Trendwatching refers to this as a digital form of "Tryvertising."

Implications: Where do people come up with great ideas like this? By listening to people like my wife (or whomever they consider to be their target consumer).

What commonly-available tools could be modified slightly to create an extreme advantage for your company?

Mike Anderson

Dealership experience a critical link in the auto buying equation

For years, manufacturers have tried to differentiate vehicles, financing plans and incentive programs. But when innovation happens, it doesn’t take long for the rest of the industry to follow suit (i.e, “Keep America Rolling” after 9/11, various “Employee Discount for Everyone” gimmicks, and so on).

Well, a recent study but Foresight Research suggests that the dealership experience—at the local level—can be an important distinction in the process of buying a car.

Implications: At our house, the purchase (or shopping) experience has long influenced a final decision about the vehicles we buy… and has certainly influenced whether we return to a dealership after buying one vehicle. Turns out we’re not alone.

This is good news for anyone who competes in a “flattened” industry: When products and prices sometimes offer little help in the way of differentiation, you can still rely on the purchase experience—the quality engagement your company has with its customers—to help distinguish your company, products and services.

Mike Anderson

Momentum (and opportunities) for "healthy lifestyle" habits

Michelle Obama has focused a great deal of attention on the issue of childhood obesity. And a variety of marketers—including soft drink manufacturers—are taking note. As a recent example of the response, see this story from today’s Media Post Marketing Daily.

Implications: The food and beverage manufacturing industries are smart to embrace the obesity issue, not just because of the celebrity and press coverage it is receiving, but because the issue enjoys such wide-spread popular support.

My question is this: Where else could the momentum of “healthy lifestyle habits” be harnessed to help companies do well, while doing good? I’m thinking about restaurants (healthy menu selections) and sporting goods stores (active lifestyle), for starters. But it seems to me that the possibilities are very broad.

Does your product or service facilitate healthy living? In a realistic and marketable way?

Mike Anderson

A new twist on conspicuous consumption

This month’s Trendwatching.com newsletter suggests that status is still the center of the consumer universe, but that status is no longer measured by simply “spending” or “owning.” Now, it is manifest in things like giving, doing well (to others), social responsibility, and more. Click here to read the issue.

Implications: This edition of Trendwatching is not all about luxury goods... but that's a category I'm thinking about right now. Purveyors of upscale or luxury goods had a particularly challenging time during the Great Recession, and they are likely most eager to see the economic recovery gain momentum. But even with apparent stability returning to many household economies, it might be a good idea to study how and why consumers spend on premium products.

For example, have you noticed any instances of “inconspicuous consumption?” That’s when people buy a Gucci or Coach handbag, and then ask the clerk to wrap it in a logo-less shopping bag. They want the nicer item… but they don’t want to be seen as spending too much when many other folks are cutting back. Another example might be the consumer who buys the flat-screen TV, but waits until the garage door closes before taking it out of the car and into their home. (In a previous life, perhaps that same consumer would have been happy to show-off the purchase to the rest of the neighborhood.) Earlier this week, one of my clients referred to this behavior as “Stealth Wealth.”

My personal hunch is that luxury goods will regain popularity as more and more people begin to prosper during the economic recovery. But there are many people who are ready to go upscale now… perhaps motivated by a different set of criteria than they were pre-recession. Which reasons motivate you?

Mike Anderson

The gap between package size and the product inside

We’ve been reading this disclaimer on cereal boxes since we were kids: “Some settling of contents may have occurred during shipping.” Well now, the Center for Science in the Public Interest (CSPI) is asking the Food and Drug Administration—along with state attorneys general—to investigate the difference between package size and the product inside.

Read this story from Media Post for more details.

Implications: When everything seemed “plentiful” for most folks (circa 2002-2006), we were less likely to pay attention to these kinds of things. But now, CSPI is likely to get a sympathetic ear with consumers and a response from the FDA. Between shrinking packages (see this Elm Street blog posting from February, 2009) and volumes that seem to be dramatically smaller than a package implies, consumers are a bit less likely to tolerate a presentation that sets the wrong expectation of what’s inside.

You don't have to be a CPG company to sour consumers by setting the wrong expectations. Does your company live up to the atmosphere implied by the menu? The values promised by your advertising? The selection implied by your massive storefront? Beware that consumers arrive in your place of business with a set of expectations. Are you positioned to delight, or disappoint? (And should your response be to adjust the experience... or the expectation?)

[My thanks to JoAnne Naganawa for suggesting this story.]

Mike Anderson

Changing the way you think about "value-added"

Very often, “value-added” is just a hyphenated way of saying, “giving your product away.” (Gift with purchase, rewards programs, BOGOs, etc.)

Before I go further, let’s clarify the meaning of value. Many people use the words “value” and “price” as if they are interchangeable… and in my opinion, they’re not. A price is what people put into the purchase; the amount they spend. Value is what the consumer gets out of your product or service; the satisfaction, benefit, or payoff they get for having made that purchase.

By “value-added,” I don’t mean slashing your price, reducing your margins, giving two for the price of one, or taking a loss on the sale. I mean increasing the satisfaction that comes with owning the products or using the services that you sell. How does your product or service add value to the consumer’s life?

Implications: This week, I received a particularly strong newsletter from Trendwatching.com, under the title of Brand Butlers. Much of the issue has to do with mobile technology, and that’s fine. But iPhone apps and mobile technology are not the only ways to enrich the way you add value to a customer’s life. Use this article to stimulate your thinking about how you can enhance the benefits and increase the satisfaction you provide when consumer buys whatever you sell.

Price is what the consumer puts into your product or service.

Value is what they get out of it.

You can add value to the consumer's life before the sale (by enhancing the process of shopping or researching the purchase), at the point of sale (by enhancing the transaction experience), or after the sale (by enhancing the ownership experience).

Mike Anderson