All Aboard.

June 29, 2010

Consumer awareness is up and scrutiny is in the driver’s seat.

The old adage still applies: when the going gets tough, businesses need to do more than talk the talk, they need to walk the walk. Otherwise, informed consumers may jump ship.

I hesitate to even mention it, since I know we’re all miffed about The Oil Spill, some of us, depending on our political leanings, more than others. But I don’t want to talk about politics (after all, we are just getting to know each other). I don’t want to talk about the oil spill, either, except to say it’s tragic. While the cleanup has fueled (pardon the pun) some jobs, it’s cost thousands, too: according to The Daily Finance, as of early June more than 12,000 Louisiana residents had filed for unemployment. Then there’s the spill’s implications on the financial market, where BP’s shares have dropped considerably since April 20. There’ve been talks of a take-over. Heck, there’s just been a whole lot of talk. From a lot of different people. And people – consumers – are angry. Which begs the question: Will they forgive?

Maybe I’m just blogging out loud, but don’t companies – whether they be BP, Toyota or the mom and pop that overcharged you on your last visit – have a responsibility to take responsibility? It’s the only way to keep consumers from jumping ship.

The Oil Spill has dominated so much of the news that smaller (although no less important) consumer issues have been lost in the fray. Chrysler’s recent recall of some 25,000-plus vehicles following complaints of sticky gas pedals didn’t garner nearly as much attention as the Toyota recalls of early 2010. One reason, perhaps, is that companies are learning to deal with disaster head-on. Clarence Ditlow, executive director of the Center for Auto Safety, speculated in the LA Times: “Clearly, Chrysler and CTS [the manufacturer of the gas pedals] have taken a look at what happened at Toyota and said they don’t want that happening to them.” They’d be fools not to, as the LA Times continues: “In addition to facing more than 200 federal lawsuits over alleged sudden-acceleration problems, Toyota has also seen its market share slide in the U.S.” What is widely considered a public relations debacle on Toyota’s part – and BP is getting hit with insults far worse – is a lesson: consumer awareness is up and scrutiny is in the driver’s seat (this time, the pun’s intended).

Sometimes, when I’m trolling the supermarket isles or considering the message of a new commercial, I imagine the boardrooms where businesses dream up their images. It might sound funny, but I always think of Dustin Hoffman’s character in Wag the Dog. In the film, Hoffman plays a Hollywood producer hired by the U.S. government to produce a war – “a pageant” replete with theme, song, visuals and celebrity “endorsements” – to distract the American public from a presidential sex scandal. Now, I already said I wasn’t going to get political, and I stand by that. But what’s so humorous about the Wag the Dog concept is this: it’s advertising and marketing. Without a slogan, a catchy jingle and a flashy package, most candy bars look alike. Without cutting-edge design and claims to certain safety features, most cars are the same. And oil, well, I’m pretty sure that for most of us, it’s all the same, too. To make themselves different, businesses give consumers something bigger to believe in, to trust. They make promises and invest in building their brand equity. Those claims should stand the test of time.

Like any relationship, there will be ups and downs; that is a fact of life. What matters more is how businesses deal with those “debacles.” Consumers are like jealous girlfriends – quick to fly off the handle and jump ship. But at the end of the day, whether you’re selling us cough syrup, free-range chicken, cars or something bigger, we simply want to believe – and trust – that you care.

Brought to you by Vertical Marketing Network, a Leading Integrated Marketing Agency.

Generation Q.

June 22, 2010

Coupons once were for clipping. But these days, savvy companies are targeting consumers who readily have access to the Internet.

As we turn from FSIs to the Internet for savings, coupons are getting a much-needed makeover.

Coupons. Does the mere mention conjure images of your mother sitting at the kitchen table on Sunday mornings, coffee in hand and scissors not far behind? It does for me. Later, there would be the inevitable trips to this store and that, stocking up with the added thrill of saving a buck or two. It wasn’t until I was living alone for the first time and playing grown-up that I realized my mother’s coupon habit (and her mother’s before that) wasn’t as thrifty as I thought. Rarely does a single gal like me need the three or five cans of soup that warrant a price break, and as much as I love a bargain, who of us has the time to skim the FSIs, let alone spend an afternoon dashing around town for a deal? Coupons, I thought, were a thing of the past.

Then, the other day, I received email advertising “Martini Week.” Sure the subject caught my eye, but it was the fine print that really got me: for a two-week period, participating restaurants were shaking up premium martinis at a $10 price tag. Imbibers simply needed a code word to seal the deal. Code words, promotion codes, online deals: I’ve been seeing them a lot.

Maybe I’m just blogging out loud here, but are these not the coupons of the 21st century — eco-friendly, more user-friendly and all-around chicer in their new disguise?

A quick Facebook poll of my friends revealed many of my girlfriends use these new coupons on a regular basis, and according to an April 2010 report from The Nielsen Co., “While newspaper inserts are still the primary method of coupon distribution (89 percent) and redemption (53 percent), Internet redemption growth has skyrocketed, rising 263 percent in 2009.” No longer, it seems, are coupons for clipping. Savvy companies are targeting consumers who readily have access to the Internet, be it via home computer or Smartphone. They also seem to be reaching out to consumers with an attractive asset: money to spare.

Sure, web sites such as Groupon and applications such as mobiQpons alert shoppers to deals at Wal-Mart, but they also advertise discounts at Banana Republic and Whole Foods Market (aka Whole Paycheck), hardly bastions of savings. Recently, one New York-area Groupon discount was for sailing lessons (who do they think I am?). While surveys show this paradigm shift isn’t new, it certainly seems appropriate for the current economic outlook. The Nielsen report confirms:

“…One might think that the lowest income households would be among the heaviest users. In fact, more affluent households dominate coupon usage: 38 percent of ‘super heavy’ users and 41 percent of ‘enthusiasts’ come from households with incomes greater than $70,000. Households with income of $100,000 and up were the primary drivers of coupon growth in 2009.”

Quoting another Nielsen finding, the Wall Street Journal reported in March that heavy coupon users, defined as consumers who redeem 104 or more coupons within the span of six months, “tend to be females under the age of 54 with college degrees and household incomes above $70,000.” I know I speak for my peers and myself when I say that even when I don’t feel like I’ve got cash to burn, I’m going to buy what I need. But even with the economy looking up, consumers need additional incentive — beyond the need — to buy luxury items. By giving an old medium a much-needed makeover, companies are targeting a new demographic: “Generation Q.” And this generation — no matter our age — is listening and ready to spend.

Brought to you by Vertical Marketing Network, a Leading Integrated Marketing Agency.
Photo credit: Bramus!

The American Idol Effect.

June 16, 2010

Immortalized at Madame Tussauds, American Idol's Simon Cowell is famous for passing judgement. Could you fill his shoes? Consumers are capable, thanks to the many brands that ask us to shape their image.

No longer are classic brands simply appealing to us on a basic need and/or want level; they’re saying, “We want to hear what you think.”

It’s no secret we live in a fast-paced world, one in which new ideas, products and trends come and go faster than you can say, “You’re fired.” While I used to worry about keeping up, lately I find myself less concerned with passing fads and more interested in what makes it past the censors; what we, as consumers, deem worthy of investing in, literally and figuratively. Catch phrases, product slogans, even jingles have worked their way into the collective consciousness (up there, that was a reference from The Apprentice, but you already knew that), but not all of them make the cut. That’s how I got to thinking about voting. Not for politicians, but for products and their evolving images.

The value of what I like to call “The American Idol Effect” extends beyond entertainment. By asking us to get involved and vote on their latest mascot, packaging and slogans, smart brands such as Brawny, James Hardie, M&Ms and even Microsoft are building a different kind of customer loyalty. They’re also redefining what it means to be a consumer.

Is it just me blogging out loud, or is consumerism no longer solely about purchasing power? It seems it’s also about having our say, and having our say matter. Brand loyalty is not just driven by the brand; suddenly, consumers are co-pilots.

That said, a recent study by comScore reports a steep decline in brand loyalty over the past two years, ultimately concluding that as of March 2010 less than 50 percent of American consumers were purchasing brands they most desired. Says comScore chairman Gian Fulgoni: “A decline in loyalty to consumer goods brands is typically one of the byproducts of a recession as consumers give greater consideration to price.” He goes on, however, to say, “Despite these shifting consumer dynamics, research has repeatedly shown that premium brands which invest in marketing and promotion activities aimed at maintaining buying at ‘preferred’ levels are able to minimize short-term erosion of share to less expensive brands and position themselves for a bounce-back when the economy improves.”

In response to this, a blogger at Mobile Marketing Watch asserts “utilizing mobile concepts to engage an audience on new levels and insert a brand image in contextually relevant and highly targeted content can do wonders for a brand that’s quickly seeing a loss in customer loyalty.” And although we’ve seen this mostly in television, where shows like the aforementioned American Idol and Dancing with the Stars empower audiences to help decide the winners, it is popping up elsewhere, too. In popular music, we’ve seen bands such as Bon Jovi and The Rolling Stones encourage fans to vote for songs to be played live (Bon Jovi did this on the Grammy Awards earlier this year). It’s hard to go online without wandering down the rabbit hole of one sweepstakes or another, asking little more than the voter’s age, gender, zip code, and a simple “yes” or “no.” In this way, it’s fascinating to consider how technology (i.e., cell phones, the Internet) can work to both a brand’s and customer’s advantage. It’s equally fascinating to consider how old-school (nay, classic) brands have made an old trick new. No longer are they simply appealing to us on a basic need and/or want level; they’re saying, “We want to hear what you think.” The louder message though is in the implication — that our voice matters. Do you think it’s working? Dial “1″ for “yes” and “2″ for “no.”

Brought to you by Vertical Marketing Network, a Leading Integrated Marketing Agency.
Photo credit: cliff1066™

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