Perusing the Sunday paper, I found an article in Parade magazine by Lee Eisenberg titled “Your Money or Your Life.” The article adds food for thought to the topic of how our economic crisis and lingering non-recovery may have changed the way consumers shop and how their definitions of value are different than they were just a couple years ago.
The current debate centers around whether or not consumers will revert to shopping as a leisure activity once a recovery takes hold, or whether we’ve all had a true wake-up call, shifted our core beliefs and will not consume the way we’ve done in the past.
Eisenberg quotes the consulting firm Strategic Business Insights referring to this sobering (and possibly long-overdue) trend in behavior as “conspicuous conservation.” Eisenberg predicts the change indicates that “we focus less on net worth and more on self-worth.”
As marketers, this trend–if in fact it gains traction and entrenches itself in our economy–will affect the way we market and brand our products and services. Here’s a quick checklist to see if your brand is ready for the new economy:
1. Quality I blogged on this topic (No One Wants a Better Mousetrap) some months ago. If your product is incrementally better than the competition you still might be on thin ice. No one wants a better mousetrap; they want rodent control. Think about how to improve or reinvent your product or brand so that no competitor can take away your points-of-difference. Even for commodity products, customer service or brand value can give your customers strong reasons to remain loyal.
2. Positioning Where does your product fall in the spectrum of alternatives? Is it better than.. cheaper than… different than Brand X? Kmart learned this lesson a few years ago when it’s position as the middle choice held no value for the consumer. Walmart was cheaper, Target better quality and Kmart was what again? Don’t get caught in the middle.
3. Trust Do you rationalize your brand behavior because it makes sense for your company, not your consumer? My former brand, Silk Soymilk, substituted natural soybeans for organic beans to keep costs down and source soybeans domestically. But they decided not to tell their retail customers nor their consumers. Instead, they introduced Organic Silk with glorious fanfare. When the new, more expensive flanker brand appeared in green packaging on grocery shelves, people scratched their heads and said “isn’t Silk organic already?” Breaking trust with customers and consumers precipitated a lawsuit by Target. Currently, they are being thrown off the shelves at Whole Foods Markets. Was it worth it, or has the brand team broken people’s trust irrevocably?
4. Retail Squeeze Retailers are feeling the decline in sales and reducing their inventories by carrying fewer brands for each category. If a product or brand isn’t turning fast enough, it’s getting de-listed. Only the top 1-2 selling brands and a private label or house brand remain on most shelves. Give your retailers or distributors reasons to keep carrying–and promoting–your brand.
5. Brand Advocates What are you doing to turn your buyers into brand advocates? Are you using new media? Are you engaging with your customers to find out why they use your products and what will encourage them to tell others? If not, read the next bullet point…
6. Marketing Traditionally, companies cut their marketing budgets during a downturn. But how are consumers to know what your value proposition is? With reduced competitive spending, a savvy brand can increase it’s share of voice to let its consumers know what it stands for, why consumers should trust the brand and why a retailer must carry your product line. Without an aggressive, continuous marketing campaign, a brand can fall into the brand valley of death: out of sight, out of mind.
If the recovery comes in the form of free-for-all spending caused by a release of pent-up demand, then all brands will win. Instead, if consumers have redefined value and continue practicing “Conspicuous Conservation,” will you be ready?