What Has the Recession Done to Consumers -- and Us?

Our Recent Reliance on Price-Centric Messaging Can't Be Sustained

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Marc Brownstein
Marc Brownstein
I had dinner last week with a small group of CEOs and senior-level marketers of large and midsize companies. We talked about a number of issues from the economy to health-care reform to government intrusion in corporate America. After some good bottles of wine, and even better Italian cooking, the topic of conversation focused on how decision makers have changed -- specifically, how the recession has forced consumers to rethink the way they make decisions. It's not the same old rules anymore. What worked a few years ago may not work today. Since this was a group that wanted to talk about marketing, we had an insightful dialogue about how people in a position to spend are spending.

If you'll jog your memory not too many years ago (like 2007), agencies such as Brownstein Group appealed to the senses of the public with strong brand messages, based on sound strategic foundations. For the most part, it worked. Then the sh*# hit the fan, the near-depression shifted into full gear, and buyers panicked (along with the rest of the world). How did that affect marketers? So many messages changed their tone and focus. It was price, price, price. Smart marketers emphasized value, but with the exception of power brands such as Apple and Tiffany, which just won't discount (and in Apple's case, don't have to), marketers and their agencies were leading with an appeal to consumer's wallets that weren't opening as quickly as they used to.

Our dinner group agreed that two years of price-centric messages is enough. It's time to shift from price, price, price to brand, brand, brand. Developing a discount price positioning is fine if your business model is built around it, like WalMart. If not, you're heading into a game you cannot win. You and your competitors will continue to discount until margins are eroded and consumers no longer value your brand for its other unique attributes.

Business decision makers are no different. They, too, have become price focused, and now prioritize that on the same level as strategy and ideas. I know that is true with the many clients seeking ad agencies. My dinner guests confirmed it is true in their industries as well.

If we are to get this economy rolling again, start creating jobs, moving products off shelves at fair prices, and buy products and services from other companies such as ad agencies based on their unique offerings versus their discounted fees, then we must do a few things:

  • Shift strategies to emphasize differentiated offerings. It's back to basics folks.
  • Spend more time innovating and not figuring out how low you can go.
  • Drive efficiencies in your products/services, so the value is better than ever, but don't lead with price in your marketing strategy, unless you can sustain that strategy. It works for Kia and select discounters -- so think hard about the path you are taking you/your clients' brand.
  • Maintain a long-term vision for your brand. Short-term price strategies can quickly erode brand value.
A more rational approach to marketing, with some adjustments to appeal to the new mindset of consumers/business decision makers, will yield better results. Of course we cannot ignore the cautious mindset that exists out there, but executing knee-jerk reactions that have damaging effects over time on the ability to sell products and services at fair prices only does more harm to the economy. So this is a call to my colleagues both at agencies and client companies to re-think how to most effectively motivate the new consumer. Low-balling price doesn't require much skill. Figuring out a better value proposition does.

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