Recession Resets Consumers’ Priorities

What does the customer want? It’s a question retailers ask themselves all the time.

According to a recent study done by the Pew Research Center, consumer needs aren’t the same as they once were. According to the study, just 42 percent of Americans say they consider a television set a necessity, down from 52 percent just last year and 64 percent in 2006. The landline telephone also saw a dip in numbers. Of those polled, 62 percent still consider the landline phone a necessity, down from 68 percent in 2009.

“It’s true that in the digital era, consumers know they can watch a lot of television programming on their computers or smartphones,” Pew said. They also can make calls from their cell phones, a belief young people especially share. Fewer than half of those in the 18-29 age range consider a landline phone a necessity, but almost 60 percent think a cell phone is a must have item.

The report also shows people consider cars, clothes dryers, microwaves, home air conditioners and home PCs as less of a necessity than years prior.

“This suggests that the psyche of the American consumer is in a much different place now than it had been in the heady days before the recession.”

Still, just because more people categorize certain goods as a luxury over a necessity doesn’t mean the products aren’t selling. Retailers can take this information and apply what they know to their future marketing strategies.

The Real Customer Service Story

Upon entering a retail store, the customer knows what’s coming next: it’s the standard greeting, followed by the current sales promotion and then the question, “Anything I can help you with today?” According to recent research published in the Harvard Business Review, that answer is often, “No.”

Corporate leaders dramatically overestimate how much the customer wants to talk to a customer service representative. They believe customers value live service twice as much as self-service. HBR’s data shows customers are significantly indifferent to that claim, and they value self-service just as much as they value using the phone. More interestingly, that indifference doesn’t change across their demographic, issue type or urgency.

It’s an interesting predicament: what should your company do to improve its customer service when the customer prefers self-service? And what’s compelling the customer to repel real-life interaction? It could be argued that with the rise in social networks, people don’t like to engage in as many face-to-face conversations with others. Maybe fascination with technology has won out and the lure of fancy, powerful machines are more attractive than the sales associates. Or, now, everyone considers themselves a control freak and dislikes relying on other people to get something done.

Or maybe, customers haven’t wanted the relationships companies have been pushing all along and this rise in self-service finally gives them the easy way out. That’s not a comforting thought for retailers who build their company on the promises of quality customer service. So, what should those retailers do?

It’s a simple task in the world of automated customer service recordings, information computer stations and high tech self-service cash registers: have customer service reps be real people. Too often, customers blow off the sales associates because they sound like robots reading from a script. If customer service practices create authentic experiences by individualizing how each customer gets served, it’s a good bet that customers will again appreciate that friendly face that greets them right when they walk through the door.

Damage Control: Bad News Travels Fast

The evidence continues to mount that on-line communication and social networking is playing and increasingly important role in the consumer’s decision to buy your brand. It seems a day does not go by without another story about the importance of integrating social networking in your go-to-market strategy. The stark reality is that if you have any business at all, something is bound to go wrong. The key is minimizing service outages and, when something is amiss, pacifying the consumer to a) retain a loyal customer and b) prevent them from using the new mass media to campaign against your brand. Nothing makes an angry consumer happier than to take other people with them.

A story in the New York Times today by Alex Mindlin discusses a study in the Journal of Consumer Research which tracks 172 angry consumers who made their complaints known on ConsumerAffairs.com and the Ripoff Report.

Does time heal all wounds? Yes and no. The report says that over time the desire for revenge on the part of loyal consumers does decrease. But that revenge factor is replaced by the desire to not do business with the offending party. If the customer considers the brand relationship to be more casual, they are less inclined.

The research also tracked a scenario where people where told to imagine being mistreated in there favorite restaurant. Loyal customers were 25 percent less likely to crave revenge if offered a $50 gift certificate. The casual customers, perhaps sensing a battle for their loyalty, required $100.

Bad news has always traveled fast, and it’s faster than ever now. This case study makes a clear and concise point about the customer experience. Service outages have to be dealt with quickly and substantially. The problem will not go away, the customer probably will, and they will take their friends and whoever else will listen along with them.

More Consumers Opting to Buy Groceries from Deep Discounters

More Americans are buying food at Wal-Mart and other deep-discount store such as Aldi. How are mid-sized chains such as SupreValu and Delhaize Group reacting? They are promoting more private label brands, reducing costs on staple items such as milk and eggs, and offering gas cards. These are all great ways to promote customer loyalty. Is it enough though?

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Consumer Habit Research Helps Public Health Initiatives in Ghana

A few years ago Dr. Val Curtis, an anthropologist then living in the African nation of Burkina Faso, contacted some of the largest multinational corporations to teach her how to manipulate consumer habits worldwide. Dr. Val Curtis then used this knowledge to persuade Ghanaians to wash their hands habitually with soap. Diseases and disorders such caused by dirty hands, such as diarrhea, could be prevented with regular soap use but only about 4 percent of Ghanaians were using soap after going to the bathroom.

Dr. Curtis wanted to know find out how she could sell hand-washing the same way multinational corporations sell Speed stick deodorant and Pringles potato chips. Many companies had perfected the art of creating automatic behaviors and habits among consumers which have helped earn billions of dollars. Could the same habit trigger approach help save lives in third world countries?

Studies revealed that Ghanaians used soap when they felt their hands were dirty such as after cooking with grease or after traveling into the city. These hand-washing habits were prompted by feelings of disgust. Dr. Curtis and her colleagues realized that they had to craft a habit where people felt a sense of disgust cued by the toilet. The queasiness then can trigger the need for soap.

Ads started running showing mothers and children walking out of bathrooms with a glowing purple pigment on their hands that contaminated everything they touched. The ads worked. There was a 13% increase in the use of soap after the toilet.

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Convenience Store Gasoline Shopper Base Decreasing

A recent TNS Retail Forward ShopperScape survey indicates that one-third of shoppers are buying most of their gasoline at alternative outlets, up from 22 percent just three years ago.
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Connecting With Consumers Though Text Messages

A growing number of retailers and big brands are connecting with consumers primarily
in their teens, twenties, and thirties through texting, also known as short message service or SMS.

Text messaging is a simple concept. Retailers place an ad either in a newspaper, magazine, TV, or radio. The ad highlights the special promotion and a shopper participates by sending a text message with a specific word or abbreviation to the short code in the ad.

Online testing and research firm Keynote Systems found that the average for a text response from a short code was approximately 9 seconds. The fastest response was less than 6 seconds. This study was based on SMS messages sent to 24 popular short codes.

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