While it seems that consumer confidence is starting to turn around, reaching its highest level in almost a year and a half, President Obama’s recent State of the Union address, signals that the poor economy and job instability are still priorities to many Americans.
A few weeks ago, we decided to ask our Critical Mass ShopTalk research community who represent a broad demographic of consumers across the United States, what they will be spending more and less on in 2010, including both time and money. What we heard from them was both expected and surprising.
Consumers talked about spending more time on hobbies and interests, with family and friends and of course the resolution favorite, exercising. What’s interesting, though, is that a large number of consumers also talked about spending less time worrying or focusing on things beyond their control, like the economy or the job market. Many seem intent on living in the present and enjoying what they have today. While our community is mindful of the poor economy and the fact that saving and scrimping are ever-present goals and challenges, many want to worry less about the uncertain future and instead concentrate on the present.
The word cloud below captures the key words consumers used when asked what they will spend their time on in 2010.
Other activities that consumers say they won’t be spending as much time on in 2010 include TV and the internet, most notably social networking sites. Consumers talked about devising strategies to limit their time in these arenas so that they can spend more time outdoors or engaging in more active and/or quality pursuits with their families. While these are admirable goals, I’m not sure how much people will be sticking to this. If they really want to stress and worry less, I think TV and Facebook provide great distractions from the everyday pressures of life. I’m looking forward to seeing whether our consumers stick to this goal.
How do they anticipate spending their dollars? Read More
This post was previously posted at iMedia Connection.
Former CMer David Armano wrote a popular post here in early 2008 entitled 10 Ways Digital Can Help You Thrive In A Recession. I encourage you to read it – its lessons remain salient today.
David’s post examined the opportunities offered to brands by a poor economic condition. And some marketers have caught on. But many still believe some common online marketing myths; an especially dangerous practice during a recession.
In the spirit of David’s post, here are 10 marketing myths de-bunked in order to thrive during the recession.
1. Things are stable now – I shouldn’t rock the boat.
The boat is already rocking – you just haven’t noticed yet.
Joseph Jaffe has this to say about marketers and risk:
“Instead of taking bold chances, we have become seduced by the promise of glory and reward that comes from sticking with the status quo. We have failed to manage risk. And in doing so, we have also failed to manage another unavoidable reality of our industry: change.”
Seth Godin adds that managing risk is not only our job as marketers, but part of the natural order of the industry. In his book Tribes, he writes that “[s]tability is an illusion…Today, the market wants change. The market demands change.”
Marketers must expect change – even plan for it. It is often the most exciting part of the job.
2. I’m Afraid.
How is this a marketing myth? Think of everything you hear around the office that translates into “I’m afraid.”
“Has the boss seen this?”
“Nobody’s done that before.”
“It’s risky.”
A lot of businesspeople hunker down during a recession, hoping they can just ride it out without creating too many problems. That’s actually more risky (and scary).
It’s OK to be afraid of new marketing tactics, but it’s not OK to allow that fear to stop you from taking risks. As General Eric Shinseki said: “If you don’t like change, you’re going to like irrelevance even less.”
3. Forget [insert social media initiative] – we just need to sell our client’s stuff.
True, selling is important. It was the focus of my post last week: The Modern Agency Still Sells, Right? But social media marketing can help build trust and gain supporters.
Phil Dunn recommends five ways for you to use social media to increase sales, including prospecting, persuasion, closing, delivering value, and customer service. Keep your focus, but don’t discount the medium’s potential to increase sales, if done correctly.
4. We finished the website – now we’re done.
This is digital – you can go back and make changes. In fact, you should!
Compared to print, digital efforts are astoundingly inexpensive in alter. Armano calls it the Beta Economy (#1 on his list). As a marketer, it’s imperative that you check your web statistics, garner knowledge from them, and make changes based on this data.
Why spend so much on a website and ignore its optimization? We’re always in beta…always.
5. I’d be better off letting my competitors try [insert new marketing initiative] first. Then I can learn from their mistakes.
What you consider mistakes are actually learning opportunities. Sure, some missteps are more seriously, but consider the experience your opponent is gaining while you sit on the digital sidelines.
Expert commentary from Sun Tzu’s The Art of War explains the importance of being ahead of your opponent:
“Once war is declared, [the leader] will not waste precious time…with all great strategists, from Julius Caesar to Napoleon Bonaparte, the value of time – that is, being a little ahead of your opponent – has counted for more than either numerical superiority or the nicest calculations with regard to commissariat.”
Being first allows you to build up what Len Kendall describes as a sort of “giving storehouse.” His “Give/Take Ratio” post illustrates that subsequent market competitors will have to work much, much harder to earn trust than the early adopter.
6. Cutting our marketing and advertising budgets will help us squeak through the recession and end up stronger afterward. [If you're not thinking this, your clients might be.]
Henry Ford said, “A man who stops advertising to save money is like a man who stops a clock to save time.”
Think things have changed so much since Ford’s time? John A. Quelch, Professor of Business Administration at Harvard Business School concurs:
“This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic time.”
‘Nuff said.
7. Focus groups are expensive, but it’s the only way to get customer information.
A recession is a great time to expand your online customer research because focus groups are simply too expensive. You can often garner just as useful information by observing customers and potential customers online.
David’s post discusses this as #7: Trade focus groups for digital ethnography.
“Social networks and search engines can be rich ethnography tools…before you slash that discovery phase, think about how digital can be used to find things about the behavior of your target.”
I would add web analytics to the mix. One of the best indicators of how your audience will respond to a message is to determine how they’ve responded in the past. Test headlines, ads, designs, and copy variations to determine the most effective tactics.
8. We don’t have anything to share with our customers. Besides, they don’t want to talk to us, anyway.
This is sometimes true. Not many people want to chat up the guy who makes their ball bearings.
But there are a lot more brands people want to interact with that aren’t making an effort yet. So what do you have to offer?
First, you’ve got access. If customers are interested in your product, it’s likely they would want to take a peek behind the curtain.
Second, you’ve got an experienced workforce with highly specialized knowledge. Employees frequently have the potential to be amazing brand representatives, given the proper encouragement.
9. I’m in a highly regulated industry…so I can’t do anything remotely risky.
Pew comes out with reports all the time verifying that Americans interested in their health are online (the latest is here); and heck, my health insurance company has a Twitter account. Chase Bank and others have even developed iPhone apps.
Even the stodgiest, most regulated industries – from health care to insurance to banking – are realizing that their customers are online…and they’d better join them or risk being left in the dust.
10. ROI is the only thing that matters.
ROI or “return on investment” is the ultimate metric. I’m not saying we should trash it.
But ROI is different in a web 2.0 world – especially one in a recession. Unlike direct marketing in days of old, customers take a more round-about path to purchase.
If you’re stuck on ROI, consider this slight twist. David Alston calls it the “return on ignoring“. From the post: “Exploring investment return for social media is valid and necessary within a business framework. But equally important is carefully assessing the price for not being involved.”
Can you afford to ignore channels where your customers are already discussing your product? Not likely.
Economic slowdowns are opportunities
I started thinking about this while writing my e-book: Marketing During A Recession: Economic Slowdowns Are Opportunities. It seems to me that this is the time when marketers should be pushing the envelope; yet, it seems like most aren’t.
Do you agree with the marketing myths listed here? How has your marketing changed during the recession? Click the title of this post to add any comments, we welcome them all.
At the annual investors meeting last week, coffee brat Howard Schultz, Starbucks CEO, went on the offensive regarding the perception that his coffee is expensive.
Howie (I feel like I can call him that since Howard is my middle name) made two key points. First, that Starbucks has “…become the poster child for excess…” Man, Ozzy Osbourne might have an argument with that if he could still form a sentence.
The second point he made was that because of the extraordinary taste of his coffee, it is a great value. “Don’t let anyone tell you their coffee is the same as Starbucks because it is not.” Oh, and by the way, they have plenty of coffee under $4.
Finally, Howie announced a forthcoming ad campaign that will convince people Starbucks is not as expensive as they are perceived. He said that recent campaigns have generated strong response. So here is my question – what exactly is a “strong response”?
I’m a believer that all campaigns should be driven by an insight, a consumer truth as one of my colleagues here likes to say (thanks for the line, Roger). So, yes, the fact that we are in a recession/depression/AIG induced spiral and people want to save money is an insight. But is it the right insight for Starbucks to act on?
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