Which are You?

My parents and grandparents lived through the Great Depression and their experiences during those turbulent and troubling years greatly influenced how they managed the rest of their lives. Hearing stories about how they coped – moving in with family, living off savings that had been put aside for a rainy day, stretching every food dollar, taking whatever work was available no matter how dangerous or difficult – also profoundly affected me. I am who I am partly because of what I heard.

Today, we are in the midst of what might be termed the Great Recession. I got to thinking about how these times will influence all of us in the years ahead. Apparently many others – particularly marketers – are also wondering what the long-lasting effects might be. Will frivolity and the good-times return or will many remain cautious and frugal?

A segmentation study recently completed by Decitica Marketing Strategy & Research, a New Jersey research company (http://decitica.com/) concludes that:

1. The effects of the this recession on consumer behavior are so profound that many of the assumptions underpinning consumer segmentation are no longer valid; and

2. Marketing strategies that do not fully recognize the diversity of consumers’ recession experiences won’t have the desired potency in the post-recession world.

The study identified four consumer types that they believe will emerge from the recession, each posing its own challenges for marketers.

Steadfast Frugalists – comprising 20% of the population, this group (of whom I am a member) are committed to self-restraint, engaging in prudence with unequivocal enthusiasm (Wow! Look how much I saved in coupons today!) Six in ten (60%) are women, and while the group is comprised of individuals from all age groups, fewer are from Gen X and Gen Y.

Involuntary Penny-Pinchers – for the 29% in this group, the recession has been especially challenging. Over-represented by people in their 30s and 40s, frugality for the most part has been forced upon them. Half have not saved any money for emergencies and 87% are more worried about the future than other groups.

Pragmatic Spenders – also 29% of the population, these consumers have blunted the effects of the recession. Over-represented by people in their 60s, and from the Northeast and West, more than a third of the people with greater than $75,000 household income are in this group.

Apathetic Materialists – this group (22% of respondents) seem least changed by the recession. Over-represented by Gen Yers, they are the least changed in terms of their spending habits and future intentions. Only about 6% of this group find price comparison satisfying, compared to 85% of the steadfast frugalists.

Do you see yourself in any of these types? What about your customers? Are you prepared to confront the new reality of the marketplace?

www.thecapstonegrp.com

Lessons from the Budworm

Several years ago when strolling through my local nursery, I noticed a Martha Washington geranium. With its large brightly colored purplish-pink ruffled flowers, it was a sight to behold.  I had to have it. This purchase was followed in short order with a Pillar Pink, a Harlequin Ivy, and several others.

Since adding these varieties to my container garden, I’ve observed a very interesting phenomenon. No, it’s not that tobacco budworms, the larvas of a brown moth, consider my plants their own special salad bar. It’s that the very same worm will change color to match the material it is feeding on. A worm on a white flower is a pale, almost yellowish color, while its brother, sister or cousin on a red blossom is…well… red. My favorite, although a voracious diner, is the striped pink and white creature that is so perfectly concealed on its matching bloom.

This miracle of nature isn’t all that unusual. There are many examples of plants and animals that can “change their stripes” to fit in with their surroundings. As humans, can we do the same? It seems with the current economic environment, many of us are being asked to transform – to adopt different behaviors, learn additional skills and define a “new normal” for ourselves, our families and, perhaps, our employees.

Large numbers of laid-off workers are returning to school and pursing training in occupations with critical shortages, such as health care and adult education. Others are using severance to become entrepreneurs. History has shown that when times are the worst, innovation peaks. Companies like IBM, AT&T and Eli Lilly were all started when economic indicators were bleak. After all, who wants to change or try something new when everything is going well? Who would grab and discharge a fire extinguisher unless the building is burning?

As with the worms in my garden, it’s about transforming ourselves to survive.  What ideas do you have? 

www.thecapstonegrp.com

50 Handy Excuses

Jack be nimble, Jack be quick. Like the old nursery rhyme, business success today requires speed, agility and the will to reinvent oneself over and over. Change is the operative word. Yet it’s so much easier to “do what we’ve always done,” isn’t it? Do you see your company… or yourself… in any of the following?  We’ve never done it before.  Nobody else has ever done it.  It has never been tried before.  We tried it before.  Another company (person) tried it before.  We’ve been doing it this way for 25 years.  It won’t work in a small company.  It won’t work in a large company.  It won’t work in our company.  Why change – it’s working ok.  The boss will never buy it.  It needs further investigation.  Our competitors are not doing it.  It’s too much trouble to change.  Our company is different.  Marketing says it can’t be done.  Sales says it can’t be sold.  The service department won’t like it.  The janitor says it can’t be done.  It can’t be done.  We don’t have the money.  We don’t have the employees.  We don’t have the equipment.  The union will scream.  It’s too visionary.  You can’t teach an old dog new tricks.  It’s too radical a change.  It’s beyond my responsibility.  It’s not my job.  We don’t have the time.  It will obsolete other procedures.  Customers won’t buy it.  It’s contrary to policy.  It will increase overhead.  The employees will never buy it.  It’s not our problem.  I don’t like it.  You’re right, but…  We’re not ready for it.  It needs more thought.  Management won’t accept it.  We can’t take the chance.  We’d lose money on it.  It takes too long to pay out.  We’re doing all right as it is.  It needs committee study.  The competition won’t like it.  It needs sleeping on.  It won’t work in this department.  It’s impossible. Isn’t it time to toss out these well-used excuses and just jump over the candlestick? Again…and again…as often as needed? Thanks to Paul Dickson who first published this handy list nearly 30 years ago in The 1982 Official Rules Calendar,

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Tips for the Turnaround

Things will get better. Really! History has proven time and again that no matter how bad the economy gets, ultimately it turns around. Will you be ready? 

Jason Boles, CEO of Fans Created, a consulting firm specializing in speaking, training and consulting services, writing about credit unions (with a message applicable across the board), notes “My biggest fear is that credit unions won’t be ready for [the turnaround.] It’s the guest we invited for dinner but didn’t think would actually show. We want a recovery to happen, and we know one will happen, but we get caught up spending most of our time and energy focusing on the pains of today versus the joys of tomorrow… what concerns me most are the decisions we are making (or failing to make) today will have a huge impact on our business in the future.”   

Here’s a few ideas for what you can be doing while waiting for the economy to regain its footing:  

1. Train yourself and your people. There’s no better time than a slow down.. or slow period… to cross train your employees.. and yourself.  Companies that rely on a group of “specialists” – each doing his or her own unique thing – are just not ready to compete in today’s global economy. Train Assembler A to do the work of Assembler B. Train your accounting clerk how to do payroll. Ask the buyer of office supplies to learn about shipping and logistics. Perhaps your employees will balk at first, ”It’s not my job.” Ultimately they’ll thank you for giving them the opportunity to learn new skills that will position them for the next job – either at your company or another.

2. Learn how to use news releases, blogs, podcasting, viral marketing and online media to reach buyers directly. Get a copy of David Meerman Scott’s book, The New Rules of Marketing & PR.  He’ll explain how to leverage the potential of Web-based communication to build a personal link with your market. No matter what business you’re in, you must harness the power of the net.

3. Become more efficient. What are you doing right now that adds no value to your business? Still producing that report that no one reads (just because you’ve always done so)? Are manufacturing employees having to walk clear across the floor for a part that they need a dozen times a day? Are you ordering (and then having to store) supplies weeks before you need them? This is the time for re-thinking and re-engineering any process that isn’t as efficient as it could be.

When will the recession end? No one knows for sure. But by using the time wisely now, you’ll be ready to cash in when it does.

www.thecapstonegrp.com