Why Consumers May Never Be the Same

The Recession Will Dramatically Change the Way and the Reasons Why Your Target Buys -- in Many Cases, Permanently

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Eric Spahr
Eric Spahr
I've been following Ad Age's coverage of the seemingly inevitable recession, particularly the solutions offered up -- most of which are on point. By all means, take advantage of any quick fixes that will get you through, as long as they support your brand equity. And, yes, innovation is always key to our industry's success, so take the advice offered and get gutsier with your new products and marketing.

But while you focus on strategies to get through the next few months, we all need to understand that our customers' behavior is changing right under our noses. When the economy bounces back, you might find that what motivates consumers to choose or not choose your brand has changed. This is critical learning that needs to be sought now, not after you launch a shiny new post-recession ad campaign.

The life of a consumer can change in an instant, often with just a few words, such as "I do" or "You're fired," or the cry of a newborn baby. These change points -- when almost everything in our lives shifts -- drive us to change our behavior and embrace new brand relationships. For marketers, these change points are opportunities to forge new relationships that could last a lifetime.
Be their choice: In a recession, you may find yourself competing with brands in unrelated categories. Strapped consumers unwilling to give up their TiVos may cut back on VitaminWater or drop their Gold's Gym memberships.
Be their choice: In a recession, you may find yourself competing with brands in unrelated categories. Strapped consumers unwilling to give up their TiVos may cut back on VitaminWater or drop their Gold's Gym memberships.

The recession, which many economists have declared is already here, will be a critical change point for millions of consumers. Yet while today's housing crisis, rising gas prices and volatile stock market may be causing consumers to question their brand relationships, that doesn't necessarily mean they will all turn to cheaper store brands and stop buying clothes from Abercrombie & Fitch for their kids.

It's tempting to give in to the knee-jerk reaction and start shifting advertising to coupons and marking down prices or, worse, freezing the marketing budget entirely. But instead of focusing on cost and pricing, we should turn our attention to better understanding how this major change point is affecting consumers. We need to determine how they are adapting, how their behavior is changing and how we can help shape this behavioral shift.


1. OBSERVE BEHAVIOR

Consumers are notoriously bad at predicting or remembering their behavior, so don't rely on what they say in focus groups or one-on-one interviews. Instead, watch what they do. Last year, people were ready to trade in their SUVs for hybrids at the thought of $3-per-gallon gas. Today, those same SUVs are swerving across three lanes of traffic for the opportunity to fill up for gas that cheap.


2. UNDERSTAND THE NEW COMPETITIVE SET

Reports indicate that half of consumers are reducing their spending to compensate for rising gas prices, but what we don't know is how that remaining spending is changing. It is no longer safe to assume that store brands or other traditional category competition are the biggest threat. Consumers are weighing purchases across categories in ways they haven't done since the mid-1970s.
ABOUT THE AUTHOR
Eric Spahr is VP-general manager of Brandstorm, a division of brand-strategy firm Northlich. He has worked with clients including Procter & Gamble, Starbucks, Ex-Lax, Coca-Cola and Chiquita.
Your brand might be competing against a completely unrelated product or service. Strapped consumers who are not willing to give up their TiVos might start cutting back on their daily VitaminWater or drop the Gold's Gym membership for jogging.

Observe consumer behavior outside of your traditionally defined category or region. A behavior change in some unrelated category or in another country could be affecting your brand.


3. UNCOVER THE EMOTIONS BEHIND THE BEHAVIORS

Behavior is driven by motivation. Motivation is fueled by emotion. And when times are tight, emotions often intensify. Uncertainty, frustration and fear can dominate consumers' emotional caches. Different emotions may drive different behaviors, or they may reinforce existing behaviors. Either way, it is critical that brand stewards understand the changing emotional motivations driving their customers' behavior.


4. CONSISTENTLY BUILD YOUR EQUITY

In dynamic economic times, both positive and negative, marketers need to pay particular attention to the indirect signals their brands transmit while adapting to the new climate. Don't try to change what your brand represents. Price cutting and other price promotions are not consistent with many brands' equity, and such moves might just end up weakening the brand in the long run. Understand how consumer behavior is changing, but don't change your equity to chase the behavior. Determine how your unique collection of functional and emotional benefits can best be leveraged to capitalize on this new behavior or used to create a different behavior.

During the turbulent 1970s, Tag Heuer didn't shy away from its association with racing, despite the somewhat exclusive gas-guzzling reality of Formula 1. In fact, it became the sponsor and official timekeeper of Team Ferrari. Was it tempted to pull back and become another Timex? Perhaps, but fortunately it persevered and is now one of the strongest lifestyle brands in the world. It understood the relationship between its brand and its consumers and leveraged it despite tough economic times.

Keep in mind that not all consumers are going to pass through behavior change points at the same time. We won't all get promoted this year. Less than 4% of U.S. households will add children to their families. A fraction of the population will graduate, buy a home or become a vegetarian. But everyone is affected by the economy. How will your customers react?
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