In the developed world, until last year we had 15 years of uninterrupted prosperity where growth was a permanent feature. Between 1995 and 2005 disposable incomes increased in the slower economies by 10% and in the highest growth economies by as much as 33%. That economic landscape has had a profound impact on our buying habits. We could afford to be curious about gadgets and new technology, indulge ourselves in premium products and just-for-fun experiences. In the latest Harvard Business Review(1)research shows how the recession has sobered us all up, moving some buying trends forward and slowing or reversing others.
The key dominant and advancing trends are:
- A demand for simplicity
Even before the recession many people were feeling overwhelmed by the proliferation of choices (see the article More Jam Anyone? in this blog) coupled with 24/7 connectivity and were starting to simplify. The recession is accelerating this trend.
The authors say, “Consider the rise of edited retailing (consumers are offered limited collections of coordinated product choices), a growing demand for trusted brands and value, an increasing desire for advisors – ranging from social networks to product ranking web sites – that can simplify choice making, and enthusiasm for less complicated, more user-friendly technologies.”
- A focus on the boardroom
Like the simplicity trend, this issue has been building for years, spurred by major governance failures such as Enron and WorldCom. Misbehaviour in the boardroom is no longer acceptable. The huge tax payer bail-outs of badly managed businesses will accelerate this trend. This also builds on people’s well established reflex to punish companies for unethical labour or customer practices, as Nike and Nestlé have learned the hard way.
- Discretionary thrift
A desire to be more wholesome and less wasteful is prevalent, with people recycling more and buying more used goods. “People are imbuing their children with traditional values – behaviours that dovetail with the growing demand for simplicity and a solid, though currently slowing, interest in green consumerism.” Many post recession purchases will be less extravagant versions of pre-recession ones.
- Mercurial consumption
Buyers are more agile and more fickle due to technology and social networking. They are more likely to shop around and shift allegiances.
So what does this mean for sales and marketing? Here are some of our recommendations.
1) Focus on how to help people realise the true value of your offering. It amazing what great and simple ideas can come out of doing this
2) Be honest. In a world of mistrust, ‘spinning’ your messages is turning people off fast.
3) Don’t start by focusing on price! Price is relative and it’s a bad place to start any sales and marketing efforts. Get your customers talking about what really matters to them and then you can reframe the whole ‘price’ discussion.
4) Network. As buyers are shopping around and using technology and networking as part of their decision-making process, then you need to be part of it. Linked In, Twitter, Blogs are proving to be powerful influencers. If you’re not tweeting, then you need to start!
In what ways are you changing your sales and marketing efforts for this economy? What’s working for you?
(1) Understanding the Post Recession Consumer, P Flatters and M Willmott, Harvard Business Review July-August 2009, pp 106-112