Getting the bounce back into the economy

Driven by rampant product and service innovation, the proliferation of consumer choice has become the defining feature of our society. Every brand and every service aims to provide us with the maximum number of options, offers and permutations for everything from mobile phones and computers to cars, credit cards, washing powder and shampoo. In the face of sometimes overwhelming choice amid cost-control pressure, we are seeing the re-emergence of what we call maximising behaviour. This means that more consumers are more determined than before to apply an exacting and demanding set of selection criteria in order to, from market to market, make the best and most rational choice. Using appropriate techniques, the number of maximisers in a given product category can be assessed. And the thing is that even for well-off consumers, perhaps not damaged by recession in any direct way, maximising activity becomes the right approach. For, as is well appreciated, the psychological effects of downturn – those that can create an atmosphere in which value-for-money is more intensively scrutinised by all – are as important as any other kind.

In 1999, Future Foundation research found that 40% of Britons were “concerned about what they could personally do to help the environment”. By the time the recession started, this figure had risen to over 70% and we are finding no evidence that this depth of sensitivity is slackening in our much-changed macro-economic prospects. Green considerations are all still present and correct inside the value-for-money equation. Of course, consumers will investigate green claims all the more thoroughly in this environment and not everyone will be able to afford the premium that any ‘ultra-green’ product may want to attract. But no brand, we strongly suspect, will prosper by shaving away any of its eco-credentials or by disestablishing environmental programmes from within its CSR portfolio. The threat posed by global warming still dominates, creating enough headlines, features and reports each day. The British shopper is no more running away from conscious green consumerism than they are running all the way to discount grocery stores to the exclusion of all other, previously preferred options.

Future Foundation figures show that the numbers of people who agree with the general proposition that companies are not fair to consumers has virtually doubled in the last decade. Consumer markets are these days filled with millions of very opinionated Brits who have long since grown suspicious of banks, utility companies and big business in the round. Loyalty – in the form of repeat purchasing of the same brand – is something that has to be won each morning. It is as if the marketing and communications community are living in their own version of Groundhog Day; what you achieved yesterday may not carry you through the next 24 hours (unless, of course, you remorselessly and continuously reappraise the price and quality of what you are bringing to market). Now, in a recession, it is natural for suppliers to compress margins and reduce ticket prices and thus contribute to a further destabilisation of established patterns of consumer loyalty. In the midst of this though, there is surely the opportunity to reconfigure brand identity to suit the feelings and motives of an often rather frightened consuming electorate. For instance, the performance of the major supermarkets in re-positioning themselves as the suppliers of quality-packaged-at-interesting-price-points shows just how the grip on consumer affections can actually be creatively re-tightened even in grim economic conditions.

Recession, we argue, is a redistribution of opportunities as it invites monthto- month scrutiny of prevailing assumptions about how consumers are actually responding to the not-necessarily-negative stimulus that downturn brings in its wake.

This downturn has forced previously loyal customers from a culture of consumption into a culture of thrift, the momentum of which many economists believe will last beyond the inevitable recovery. The key tenets for marketing in a world that has shifted gears from conspicuous to conscious, concerned and considered consumption, will be price, loyalty and (most importantly) service.

Firstly, price. From Urban Intelligence to Suburban Comfort Mosaic types, consumers will emerge from this downturn more aware, knowledgeable, and more tuned-into an understanding of the price/value equation than ever before. Many will have become used to seeking out low prices by shopping at a wider range of on and offline stores, behaviours that might not have occurred to them previously. This ratchet effect – where short-term changes tend to persist into the long-term – will manifest itself in our ongoing examination of all prices in the future. Thrift will not be un-learned suddenly in the face of this intensification of price scrutiny and volatility, it will be even more vital to remind consumers of the multiple value benefits of your brand; to be transparent about all costs and to hide nothing; look at payment plans and terms to build-in flexibility/’easy-pay’ when and where feasible; and reexamine the all-inclusive/package-deal offer to lock consumers in at a great price.

Secondly, loyalty. Even amongst historically brand-loyal groups (like Happy Families and Ties of Community) we are witnessing the growth of increasingly volatile and promiscuous behaviour when it comes to sticking with established brand repertoires. From choice moment to choice moment, we are becoming conditioned to explore whether the very best deal might in fact lie elsewhere and this new mode of behaviour is making us all question our previously unwavering loyalty to many existing brands and services. Although there has to be a presumption that brands which ‘cared’ for us during the recession will be the ones deserving of our ongoing loyalty once the crunch is behind us (the major supermarkets, for example), what are the bounce-back behaviours that drive loyalty? Alongside the ubiquity of all manner of reward points schemes, great price and great customer service (see page 10), ongoing tailored and targeted one-on-one communications are key. Relationship building through bespoke promotional activity – either in the form of discounts or personalised recommendations – show that you are putting your customer at the heart of everything you do. In this new world, relationships are more important than ever and building stronger ones is a solid strategy for achieving success.

Thirdly, service. In the past year, well over half of all consumers have taken their custom to a different shop or company because of poor or indifferent service (rising to nearly 70% of the well-established and well-heeled Symbols of Success and Happy Families classifications). Bounce-back behaviour will be characterised by our willingness and ability to look elsewhere for a better customer service experience as we vote with our feet or click our way to your competitor if we are unsatisfied on any level. Beyond convenience and a brilliantly built brand, best-in-category interaction and being proactive with your customer will ensure continued financial health with established customers coming back for more and happy to recommend you to their friends and family. To outperform the competition, even in the toughest of markets, excellent and sustained customer service will become the hallmark of the successful brand in the post-recession landscape.