By Terry Corbell
Think 1930s for Business Success…Consumer Attitudes are Changing
Hyper-consumerism is history. Traditional values with a purpose are in vogue.
Traditional values – old-fashioned, if you prefer – describe the new mindset of consumers and what they expect from business. That’s according to a white paper, “The Power of the Post-Recession Consumer,” republished by strategy+business in June, 2011.
Authors John Gerzema and Michael D’Antonio explained a shift in consumers who are now adamant about affordability, connection and quality. It’s similar to the attitudes of any person who survived the Great Depression.
The shift has implications for every ambitious company, manager and employee – from human resources and marketing to finance. Many business cultures must change for survival.
“People are returning to old-fashioned values to build new lives of purpose and connection,” the authors wrote. “They also realize that how they spend their money is a form of power, and are moving from mindless consumption to mindful consumption, increasingly taking care topurchase goods and services from sellers that meet their standards and reflect their values.”
Messrs. Gerzema and D’Antonio maintain this consumer shift about business started before the Great Recession. It accelerated during the downturn. It’s a worldwide philosophy, not just in the United States.
It’s related to disenchantment with the behavior and policies of political leaders. It’s a shift to a new attitude of values and environmentalism.
Traditional values – old-fashioned, if you prefer – describe the new mindset of consumers and what they expect from business.
They call it a “spend shift movement.”
“It will create opportunities for businesses that heed its message, and penalize those that do not,” assert the authors.
As a launching pad for their research, they started with Young & Rubicam’s BrandAsset Valuator (BAV), which is comprised of 20 years in the research of consumer habits, and in more than 40,000 companies in 50+ nations. It’s complemented by the opinions of more than 1 million respondents worldwide, including 16,000 Americans.
Some 70 brand measurements are also included.
“As a factor in decision making, sheer desire or the goods themselves has been declining sharply for the past decade,” the uthors wrote. “More recently, the BAV surveys show sharp increases in the number of consumers who want positive relationships with marketplace vendors and who focus more on corporate behavior.”
The authors report consumers now resist buying brands/products associated with these adjectives:
- “Exclusive” (down 60 percent)
- “Arrogant” (down 41 percent)
- “Sensuous” (down 30 percent)
- “Daring” (down 20 percent)
Consumers now prefer these brand images:
- “Kindness and empathy” (up 391 percent)
- “Friendly” (up 148 percent)
- “High quality” (up 124 percent)
- “Socially responsible” (up 63 percent)
The authors state these attitudes represent the biggest change in the two decades of BAV’s research, and they cite personal-savings data from the U.S. Bureau of Economic Analysis.
“Even as unemployment surged past 10 percent, U.S. consumers socked away more money every month,” the authors explained. “By the middle of 2009, people were saving about 7 percent of their disposable income — a figure that hadn’t been seen since 1995.”
To illustrate the spend shift movement, the authors divided their findings into four tenets:
- “United by Change” – the shift includes 55 percent of Americans, 53 percent of the French, and 45 percent of the Germans and Italians.
- “The New Thrift – more than 66 percent of Americans are down-sizing. Among the millennials, 77 percent are cutting back. Companies that deliver according to the expectations of these consumers have a 249 percent better
- “Transparency breeds trust” – The digital age has prompted a new awareness. Consumer trust has dropped by almost 50 percent in companies and governments that fail to adhere to the new expectations. “In today’s marketplace, successful companies will practice complete transparency, letting customers see their supply chains, management strategies, and values,” the authors assert.
- Companies that Care” – empathy should be a top priority. “The ability of a company to identify with its customers is now a prerequisite for any brand in the post-crisis age,” the authors added. “Today, openness, humility, and understanding are critical. Generosity binds a company to its community and its stakeholders.”
As the authors suggest, think “helpful, reliable, educational and durable.”
For new and existing entrepreneurs, the authors provide this advice: “If you have an idea for helping people learn new skills and connect with others, your business has a good chance of success.”
From the Coach’s Corner, here’s a related article: Cause-Related Marketing Can Increase Sales by Double Digits
“One of the biggest responsibilities of management is to look after the corporate DNA.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.