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.

This time, it’s different: Wells Fargo to end free checking (for some)

Observation:   Last week, a report from the Associated Press explained that Wells Fargo will roll-out a $7 monthly fee for checking accounts that were previously free… unless customers maintain a $1,500 minimum balance, or direct deposit at least $500 per month.  Click here to see the story as it appeared in Crain’s New York.

The fees will roll-out gradually beginning in May, and beginning with six states, according to this story from KSTP News in Minneapolis. 

Eventually, the rate will be in place in each of the 39 states that Wells Fargo serves.

Implications:   So why has Wells Fargo avoided the outcry of unfairness that was cast on Bank of America a few months back when they tried the same move?  I suspect it’s because Wells Fargo did a better job of explaining that the move would not affect customers across-the-board, but that it would impact folks who don’t do much business with the bank anyway.  It seems to me that Wells Fargo is thinning the customer herd.

In the story, one critic complain that the bank is being unfair to folks who are unemployed or on low fixed incomes, but I’m not sure they’re being any less fair than any business that expects to be paid for products received or services rendered.  (Most companies target consumers with incomes.)  Another critic warns that Wells Fargo will lose much more in the way of customers who walk away than from the income these new fees will generate.  I’m betting the folks at Wells Fargo have calculated that trade-off, and are at peace with their decision.

Many companies focus on customers they wish they could have.  But have you thought about those customers that could actually be costing you more than they are likely to be worth, in terms of economic return?  

In the face of rising energy and commodity costs, is it likely that you will have to raise prices on some products or services in the next few months or years?  What can you learn from the way that Wells Fargo has introduced—essentially—a price hike?

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

Automakers introduce “Gateways to Luxury”

Observation:   An article from USA Today explains how luxury automakers are moving down-market, hoping to lure younger, perhaps less affluent consumers into the upscale car market a little bit sooner… and more gradually.  Click here to see the story.

Implications:   “Luxury brand owners tend to be more loyal,” and therefore, it’s important to “Capture, Land and Expand.”  What a great series of thoughts from people who work in the upscale car market.  Gain attention the market share you hope to (capture) and develop over the next few years, sell (land) them, and then grow (expand) the relationship.

Makes perfect sense to me, provide there are entry-level luxury vehicles worth buying, and provided there are enough buyers to go around in what appears to be an increasingly crowded space.

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

48% of convenience store/gas station customers don’t make it into the store

Observation:   According to a story published this week by Convenience Store News, only about 52% of convenience store/gas stations actually make it into the store for a purchase beyond fuel.  Of that group, about one in four purchases a soft drink.  (Click here to see the story.)

Implications:  The C-Store business has done a fairly good job of taking food dollars from quick service restaurants over the past few years, but this report suggests there is still room for improvement and growth. 

What kinds of things compel a person to walk into the store instead of climbing back into their car after paying at the pump?  Point-of-purchase stickers or video ads played at the pump?  Covering the store structure with posters about cheap corn dogs or ice cream tickets?  How about coupons mailed (or emailed) to commuters that live in the store’s neighborhood?  This is not just a question for the C-Store… but one that anyone who sells lottery tickets or beverages would love to answer.  (And I bet a little research on your customers would provide great clues.)

If you’re in the fast food business, how do you re-take some of the food dollars that the C-Store industry nabbed during the recession?  Dare I say “ambience?”  Freshness?   (There’s a good chance that “cheap” alone won’t do the trick.)

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

Bank loyalty higher than thought, according to survey

Observation:  A survey conducted by TD Bank indicates that more people are loyal to their bank than wide-spread negative press might lead one to believe.  That’s according to a story in today’s Marketing Daily (click here to see it).

Implications:   This is positive news for people in the financial industry… but I bet the satisfaction level varies widely from one institution to another, depending on the extent to which a bank nurtures their relationship and refines their service to customers.

Like many consumers, my wife and I are satisfied with our primary bank due to the fact that we seldom come into contact with it, directly.  With direct deposit, automated bill pay and online services, it is rare that we actually talk with a human or walk into a bank branch. 

If the relationship that your company, product or service has with consumers is similarly automated, in what ways might you maintain an element of contact or communication with customers that is truly valued and appreciated?

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

Consumers less likely to re-locate

Observation:  People are simply less inclined to make a cross-country move during times of economic hardship, and that tendency has been clarified by recently released census data and this recent story from the New York Times.  (Click to here to read it.) 

Implications:   Beyond it’s implications for the housing, moving companies and related industries, this story is a reminder of just how critical it is to know your current customers, and serve their needs remarkably well. 

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

When online connections go from lifeline to leash

An interesting story in yesterday’s New York Times explains how many customers who’d like to fire their bank end up staying… because it’s too complicated or inconvenient to switch around the various automatic payments and deposits that are a part of their account.  Click here to see the story.

Implications:   We often refer to this as a complexity cost... because burden of changing providers is greater than staying with one you’re not happy with.   But the danger of this scenario is relative, and quite subjective; at any time, the consumer (or lots of consumers) could say, “Okay, enough is enough,” and devote a Saturday to tracking down each of those online/automatic relationships, and severing the account.

If you’re the bank, how do you make people stick with you… because they want to?!  Or, if you’re a competitor, how could you make switching easier… and become the destination for unhappy customers?  (Think in terms of the “15 minutes could save you 15%” campaign from Geico, or Progressive’s “We’ll give you our price, and the rates of all our competitors.”) 

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

Restaurant recovery proceeds slowly

Roughly 24% of adults came through the recession relatively unscathed… but the rest are still being very careful about spending their out-of-home dining dollars, according to a story that appeared today in Marketing Daily.   Citing research from NPD Group, the article indicates that a recovery is definitely underway in the restaurant category, but that consumers who are working with lower household incomes or rebuilding wealth are dining out less frequently, trading-down in terms of restaurant type, or even ordering fewer items.  (Click to link.)

Implications:  This article—and the restaurant category—provide a great example of how some attitudes and behaviors learned in response to the recent recession could linger for quite some time.  Many consumers were simply on “auto-pilot” when it came to spending decisions (or non-decisions); now, spending seems to be much more thoughtful and deliberate.

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.

Whose loyalty is it, anyway?

An interesting story in today’s Marketing Daily suggests that many customers are less than impressed by some of the customer rewards programs out there. Click here to read the full story.

Implications: Do you see your company’s reward program first as a direct marketing tool that lets you advertise to current and past customers… or is its primary function to foster loyalty among those consumers?

Don’t get me wrong: A good rewards program could and should do both. But if you’re focused too heavily on the advertising aspect of this tactic, and too little on the customer service component… the company/consumer relationship could be at risk. A great loyalty program doesn’t just reward the consumer for being loyal to you; it should demonstrate that your company is loyal to the consumer.

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

A novel idea: The customer is NOT always right

I’m cleaning out my email in-box, and catching-up on some story ideas that were good but not urgent over the past week. One of the items that caught my eye was this story from the New York Times, explaining that some New York restaurants have taken a hard line on allowing almost any customer input.

Their position, if I may paraphrase, is that “we’re not for everyone; if you don’t like the way we cook the food (without your input), then we’re not a good fit for you and you should go somewhere else.” Click here to see the story for yourself.

Implications: Gutsy move, right? And maybe, just maybe… brilliant.

While riding with a colleague to dinner one night, we passed through the retail neighborhood that almost every city and suburb is familiar with. It had an Office Depot, a Bed Bath and Beyond, Michael’s craft store, a Barnes & Noble, and of course, a Starbucks and an Applebee’s (among other recognizable national franchise joints).

My friend turned and said, “Welcome… to Generica.” It was the perfect, succinct observation, and delivered dead-pan at just the right time.

Do you ever water-down the charm of your company, product or service for the sake of appealing to more people? Does doing so run the risk of making you less appealing to your core? In a world where consumers are so often researched down to their lowest common denominators, perhaps a restaurant that isn’t right for everyone… is just what their most valuable customers are after.

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

The meaning of loyalty has changed

An interesting story in today’s Marketing Daily suggests that consumers aged 25-49 interpret loyalty differently than their parents did. Gen X and Gen Y are more likely to be loyal to attributes than a product, service or company. And they’re using contemporary research tools (computers, smartphones) to do their homework. To see this article, based on an AMP Agency study, click here.

Implications: In your local market research, perhaps you should focus less on taking market share from competitors, and more on the attributes that led to that market share. Another reminder that the purchase decision is fueled by the benefits a consumer seeks when owning/using the product or service.

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

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

Banks regaining *some* customer approval

Few industries took a bigger reputational hit than banks during the great recession. From liberal lending by mortgage banks, to the bundled securities (many involving sub-prime debt and illiquid assets) offered by some investment banks, to the T.A.R.P. “bailout” money offered to many commercial banks… there was plenty of negative press to go around.

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.

Mike Anderson

The importance of (your) Target

In contrast to the story I posted about Wal-Mart earlier this morning (see below), Target stores predict they’ll have their strongest quarter in three years, according to this report from Marketing Daily (click to link).

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.

Mike Anderson

Benevolence is nice (Part Two)

I’ve been reminded of another issue that can be misinterpreted as completely benevolent (I wrote about another earlier today in the posting that appears two stories below). And that is the concept of “Local.” A recent Media Post Marketing Daily story might help you grasp why consumers see “local” as a true benefit worth buying, rather than simply an ideal. (For starters, think about things like the freshness of produce grown close to home, the environmentally responsible act of buying things that weren’t shipped long distances, etc.)

Implications: On a similar note, there was a story in the New York Times early this month which pointed-out that more local products are showing up in stores like Macy’s. (Click here to read the story.)

Sure, Twin Cities shoppers will appreciate seeing a Minnesota Twins cap in their hometown, but is that enough to make Macy’s feel like the hometown department store that Dayton’s once was? I don’t think so. And anyway, that hometown feel, alone, was not enough to keep Dayton’s alive.

Instead of simply touting, “Local,” tell the consumer why a product or service is BETTER when produced locally. After all, while many people prefer to buy local, the going-out-of-business hall of fame is filled with local companies who lost-out because the consumer—while preferring to buy local—decided to compare prices at Walmart or Costco before making a final decision.

Mike Anderson

A more perfect union: Looking at the world through the other side's eyes

Colleague Kim Willoughby shared an article that she had read in the New York Times last week. It had to do with an agreement between General Motors and the United Auto Workers union that included significant wage cuts for a part of the workforce that will help build a new compact/sub-compact car in the U.S. Click here to read the story.

Implications: I’m going to express this as an opinion, but bear with me: Both unions and companies have long thought that for one to win, the other must lose. At times, this prevailing attitude has resulted in harm to the company, the union, or both.

In light of another challenging month for the jobs market (click here to see the Bureau of Labor Statistics report, also from last week), it is not surprising to see unions and companies—finally—look at the world from each others’ point-of-view, and realize that they are mutually dependent entities… not archrivals.

Think about the participants in your own business cycle. Whether product vendors, service suppliers, customers or workers, have you ever looked at a person or company as if they were adversaries to be defeated, rather than partnerships waiting to happen? Review your negotiation/transaction process, and the answer will probably reveal itself to you.

Mike Anderson

Who are your new competitors?

This article is about groceries… but the implications behind it are likely to impact almost every category of business.

Building on the post from last Friday (see immediately below), I saw a Lempert Report newsletter last week that discussed the emerging channels that are competing for food dollars: Including drug stores and dollar stores. Click here to see the story.

Implications: If you run a supermarket, you have competition beyond the similar grocery store down the road. The lines that define a category are becoming blurred… as drug stores get into the grocery business, grocery stores get into the pharmacy business.

The bank on the corner doesn’t just compete with the bank down the street. They are seeing loans and deposits go to the credit union, car loans go to the car dealer, IRAs sold by the insurance company, 401k’s offered by the employer, and home improvement loans taken by the big home improvement retailer.

What business are you in? And who do you compete with… besides your competitors? Have you thought about ways to preserve share, among a diverse set of new competitors? What is driving this proliferation of options the consumer finds available? And how does your marketing message need to change to fit-in to this new landscape?

Mike Anderson

Air fares might seem less fair

In another case of supply and demand economics, the airline industry seems to have turned a corner, in terms of pricing and inventory. That’s according to this recent story in the New York Times. For the past few years, the airlines have collectively cut capacity… which is putting upward pressure on the price of air travel, and pushing profits upward for the industry. Click here to read the story.

Implications: Every product has a tipping point, at which the price takes consumers out of the market. It will be interesting to see if that point is acknowledged first by the airlines, or their passengers. We should know next spring and summer, as the tourism season resumes.

It is not so much the cost of a ticket that matters at this moment... but the cost of a ticket in contrast to their pricing in the depths of the recession, which was not all that long ago. I haven't heard too much about various baggage fees and pillow prices among business travelers... but I've heard a few "non-frequent vacation flyers" that were shocked by the hidden costs of hitting the skies. If that goes on too long (the surprise, I mean), I have to guess people will find alternatives that are closer to home. What do you think?

Mike Anderson

Fearing guilt by association, banks consider environmental impact of loans

A recent New York Times story suggests that some banks are considering the ecological implications of lending money. Click here to see the story.

Implications: My mother used to say, “If you’re hanging around with the people who do bad things, you’re just as guilty as they are.” In the wake of the BP oil spill in the Gulf, all kinds of chief executives might be thinking back to similar warnings they heard from their own moms.

Of course, guilt by association is not a literal offense. But one that is judged in the court of public opinion. (Mom knew that, too.) But the thought might inspire you to consider—from support companies to inventory vendors and service providers—are the companies you rely on to operate your business operating in a responsible manner (environmental or otherwise)? It can be hard to answer that question in times like these. But it becomes much more difficult after a news-worthy event gains momentum (as implied by another recent story in the NY Times; click to link).

Mike Anderson