What is a real recession response?
Understanding the true meaning of value to your customers
As brands struggle to come to terms with a recession like no other, Roz Calder
rejects the generic knee-jerk reaction on price and product and calls for a return to the essence of marketing: understanding and meeting consumers’ real emotive needs.
We’ve all become used to so many brands offering us a generic recession response: everyone is suffering, so it makes sense to focus on price and product and offer us all a better deal. Nobody complains at being offered a better deal.
But, as far as the brands themselves are concerned, is it really working? Are people buying? If they are, is it necessarily good for the brand? If not, what does this say about how they are responding?
In our midst, journalists and the media paint a confused picture. They do not necessarily have the answers. They may be asking the wrong questions.
No universal consumer response
TNS has completed a NeedScope qualitative study of consumer response to the recession. Our research has enabled us to provide an intriguing framework for evaluating consumer response and, in turn, helping brands respond across a number of parameters, including value.
As marketers strive to align every bit of the marketing mix in a general atmosphere of depression, we have found that the way they talk about ‘value’, for example, could make a big difference with existing and potential consumers. The findings show that a generic response around price is a very blunt tool indeed. They point to the need for brands to find their own, more subtle understanding of how their customers ‘value’ their products and services.
First, not everyone is suffering in this recession. There is no universal response. Second, consumers are driven by far more than rational needs. When it comes to understanding value or any other factor of the customer relationship, the big question any brand should be asking itself is: How is the current situation affecting our consumers emotionally
and how can we respond to understand and meet these psychological
needs?Six core consumer strategies
Within this framework we’ve identified six core consumer recession strategies. Taking ‘value’ as a particular example, the responses might look as follows:
The multi-modal consumer
- Fight and Exploit – you’re looking for something extremely cheap that allows you to exploit the recession rather than fall victim to it; if you can beat the odds by taking advantage of a ‘50% off’, you feel that you’ve got one over on the situation.
- Compete and Win – you’re seeking enduring value; quality remains the most important thing, so it’s not about deals but something that is going to last over time.
- Strategise and Plan – you want to make a smart choice and so take a long-term focus; the initial cost may be lower, but long-term value is higher.
- Retreat and Defend – you have to see it as saving money; you like to feel a company is sacrificing something, so even small discounts are OK; and you want your loyalty rewarded with discounts.
- Collaborate and Accept – you’re not going to buy it just because it’s cheap; you’re happy to get a discount on something that really demonstrates its practical value.
- Avoid and Indulge – you’re looking for something for nothing; it might be the chance to win something or just a fun experience; as long as it gives you the opportunity to indulge.
One of the first things our research revealed is that individual consumers can embrace several of these responses at different times and across different categories. It is possible to Strategise and Plan when it’s time to replace a car, perhaps taking longer to do so and being wary of ‘deals’. The same person might want to Avoid and Indulge when it comes to buying a mobile phone, opting for a pricing plan that allows them to call their ‘best mates’ as much as they like for a low price and offers a free trial on a new social networking application. Yet, with weekly food shopping, the Collaborate and Accept strategy might emerge, with a tendency to make small cutbacks across the whole range. There may be less eating out, but the Compete and Win principle will drive value judgements on the best restaurant around and they’ll stick with that, instead of experimenting.The role for brands
The lesson for any brand on value and other aspects would appear to be: know your customer and what connects them to your brand, recession or no recession; tune into their emotional needs from your brand at this time; adapt your promotional and marketing communications to suit. All easier said than done. But it helps when you work from a position of insight and develop your marketing activities accordingly.
The TNS NeedScope framework points to a range of archetypal brand responses that align with the different consumer strategies.
These multi-modal consumer responses demand particular strategies from brands. Consumers adopting a Fight and Exploit approach will respond well to a Rebel brand enabling them to make the most of the recession. A brand like Virgin has reported good results in the recession because it has understood its position as a Rebel, appealing to those who are prepared to take advantage of good deals.
On the other hand, the Collaborate and Accept strategy will resonate with a Helper brand, which recognises it must overtly demonstrate its practical value to consumers who won’t buy just because the product is cheap.
Strong brands understand the language of archetypes. Finding and working with the right archetypes lets you connect emotionally with your customers and provides a powerful platform for brand building.Download the full report