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I’m amazed at how fast the decline of the U.S. economy has impacted our lifestyles. We are buying far fewer goods and services that we now consider luxuries, and we are slowing the pace of our lives in the process.
While this new frugality is causing great pain for businesses, it also is creating unique opportunities, many which were laughable a few months ago. Here are just a few consumer shifts challenging marketers.
People are buying more private label brands. Until recently, most consumers wouldn’t touch store brands because of their perceived reputation as second-rate. Now, low-cost store brands are flying off the shelves.
Coupon redemption rates are soaring. For years my wife and I have purchased an annual discount coupon book to support the charities that receive commission on each book sold. But this year we’re actually using the coupons, and so are most of our friends.
Many consumers are opting for reconditioned mobile phones, instead of automatically upgrading to the latest model. Buyers are trading bells and whistles for shorter contracts and lower payments.
Kmart is bringing back layaway plans. Imagine that. Some customers are willing to wait until they actually have the money to pay for an item instead of charging it. Or maybe their credit card companies cut them off. Either way, paying in full upfront will be a new experience for many maxed-out spenders.
Vehicles are no longer “disposables.” For much of the last 20 years, cars and trucks were sold down the food chain at the first hint of trouble. Why fix a car when buying a new one was so easy and so much fun? But now, people are keeping – and repairing – their aging vehicles. I even saw a “help wanted” sign in front of a local mechanic’s shop.
Reduced demand is forcing hotels to dramatically lower room rates. Room rates for hotels on the Las Vegas strip can be found in the very low double digits for those using online bidding services and timing it just right. Maybe they’ll make it up in the casino or buffet.
Marketers are responding to our changing habits. One example I’ve observed is Allstate Insurance’s new TV ad campaign, which focuses on its origin as a depression-era company and touts the recession as an opportunity to return to the “simple pleasures” of life.
So what can you, as a construction or service-rendering pro, learn from these trends?
First, rethink your product/service mix. What do you offer that can extend the life of existing products, or make those products more valuable? Buyers are more willing to invest a few dollars in something they own, rather than take on new payments.
Second, tap into the consumer’s hunger for deals. Try using coupons, frequent buyer cards, anniversary specials, family and friends discounts, first-time buyer prices, etc. Make these discounts immediately obvious in your marketing materials.
Third, position yourself as someone who understands what consumers are up against. Kmart’s layaway plan and Allstate’s “simple pleasures” message demonstrate a desire to meet the consumer on his or her terms. How can you brand your company so that fragile buyers believe you are on their side?
Finally, keep it simple. With so many buyers stressed out and shouting “no” to offers of all kinds, you might do well by simplifying your sales approach. Cut the bells and whistles from your pitch and focus on value, dependability and trust.
Ultimately, consumer confidence extends beyond our checkbooks. We buy from people we trust. Make sure you – and your products and services – are trustworthy.
P.S. Speaking of trustworthy marketing, I will miss radio broadcaster Paul Harvey, who died over the weekend. Harvey’s deliberate storytelling style often focused on people’s triumphs over adversity. His thoughtful prose lent credence to the products advertised on his show, a trait sorely missing from today’s frenzied, egocentric media.