There’s a new economy in town. And things may never be the same. In fact, they shouldn’t be the same. As God’s creatures, we evolve. Things change, and we either change with them or get absorbed into the mud. I’m choosing change.
You could say the Great Recession - which is rumored to have “ended” last year - was the biggest jolt to the current consumer psyche we’ve ever seen. The lasting generational effects from the Great Depression are obvious. We’d be remarkably shortsighted not to believe our buying patterns haven’t been distinctly altered as well.
In the Great Depression, there were fewer goods, fewer categories, less moving parts to the economy and almost zero two-income families. Frankly - and with full measure of respect to our forefathers’ suffering for our relative prosperity - there were just more ways to “lose” in the current recession. The security of a job and home ownership were shaken to the core.
The wise marketer will take note of this new economic environment and adjust accordingly.
Signs of improvement include an October 2010 job report, which showed 151,000 new jobs and the best hiring pace in six months. There was also more work to be done, resulting in higher take-home wages among the currently employed.
According to CNNMoney.com, “Average weekly wages improved in October by the biggest percentage since the start of the Great Recession.”
So, now that the turn has begun, the question is, who will we meet in this new economy?
How Your Customers Have ChangedThe Associated Press recently examined the American consumer post-recession. This new economy has yielded a more focused, cautious and tactical consumer.
Value vs. prestige.
Although not as exciting as “Alien vs. Predator,” consumers are choosing value
over prestige. Goodbye Hummer, hello Prius. Even those with higher incomes have
developed a taste for frugality as a badge of honor.
Economists think this shift may be here to stay. Store brands are leveling a real battle - for the first time ever - against name brands. Though seemingly at odds, “old values” enter into our “new” economy.
- Layaway vs. credit. Overextended credit and interest have been painful for too many people. Once again, a return to elder thinking has emerged. Easy credit with instant gratification is giving way to the old method of credit called layaway.
To define this for the young people who read this magazine, layaway means you make all the payments before you can take the item home. Two years ago, Toys ’R Us didn’t have a layaway program. This year, it’s up and running for Christmas.
How Will You Adjust Your Marketing?As a plumbing contractor, you meet consumers where they are. There aren’t many catalogs that unstop disposals; hardly any e-mails can install a water heater.
1. Promote value. Your customers are begging for value, which - for the 3,000th time - is not cheap. If the price is justifiable by durability, simplicity or long-term savings, so be it. Consumers want confidence from you that they are making good buying decisions.
2. Return to rational. I applaud this recession for this reason alone. Old values, specifically a more sensible buying rationale, are clearly emerging. Gone are the indulgent public expressions of self-worth by price. In its place are distinguishable values. This means you, my friend.
How is your company different? For the 3,001st time, it’s not price. It’s better service, better trained techs, more stable business, consistent record with warranties, good customer relationships and the positive referrals therefrom.
3. Relationship power. In your marketing, this means demonstrating a provable appreciation for customers. This is done via an “old-fashioned” focus on customer retention marketing with a modern twist. So, “yes” to mailing newsletters and “yes” to posting the new issue’s features on Facebook, Twitter, blogs, etc. This sends them to a link to see a teaser article and to sign up for the mailed version. (I’m a stickler for mailing since homes have plumbing needs; e-mail addresses do not.)
We have written 26 conversation starters for all the above, plus reminder e-mails, referral requests, helpful online articles and a variety of Groupon-like discount certificates for special occasions. Stay in touch, people.
4. Risk reduction. In both acquisition marketing and closing the sale, add in risk reducers that remove call reluctance and sales resistance. These include 10-year warranties (on parts and labor), satisfaction guarantees and guaranteed energy savings.
In recent work with a plumber having a hard time against an aggressive franchise, we instituted some serious firepower:
- If we don’t meet our one-day install promise on your new water heater, we’ll pay to put you in a hotel.
- If this unit/system fails during the warranty, we won’t just fix the part, we’ll give you a new system.
- If you ever run out of hot water during warranty, we’ll come over and wash your armpits. (OK, I made that up to see if you were listening.)
We created five very strong risk reducers and blasted them from the rooftops. Basically, our marketing forced differentiation from this plumber who had “blended in” and began to take large bites out of the aggressor’s sales. Good. That was the point.
And what’s your point? I ask you to proactively adjust to the new economy, not just accept it and continue doing the same things. In the new economy, efficiency reigns - and that goes for your marketing, too.
Make the marketing investments of time and money that keep you connected to customers, their new buying patterns and all their friends who appreciate the same.
A return to value. Hallelujah. Long live the new economy.