By Robert Wheatley

It Feels Right to Trade Down?

In a November story by Ellen Byron the Wall Street Journal tracks what they characterize as the triumph of frugality over brand loyalty. And there’s plenty of evidence that indeed consumers are swapping out popular brands for equivalent private labels. The Journal profiled a recent Mintel survey of 3,000 consumers that found 40 percent of household shoppers saying they’ve started to purchase store brands, “because they’re cheaper.” Mintel indicated on average store brands cost about 46 percent less than their national brand brethren.

And not just among middle income households: Information Resources’ “Shopper In Crisis” report determined households with incomes above $100,000 are not immune: 41 percent are cutting back on their spending for non-essential groceries and nearly a third saying they’re buying more private label products while foregoing some of their “favorite” brands. According to Nielsen Co. store brand sales of soap and bath products are up 23 percent and skin care items rose 16 percent through early September.

Habit on Hold

Habit has been a mainstay defense for brands in this era of over-choice and too many products chasing pocketbooks. Consumers have shown a remarkable ability to resist change once a brand is selected and, assuming it meets the buyer’s expectations for performance, the relationship can go on undisturbed for many years (assuming nothing dramatic comes along to dilute and marginalize the brand’s value proposition). We simply don’t want to invest the brain time to assess if a replacement is warranted. Yet the economy has quite clearly ridden roughshod over entrenched habit

The Mental Economy

Certainly there are real and justified fears over job losses, credit squeeze, the drop in home values and the tanking of retirement and 401k accounts. Regardless of how close these events get to individuals in various walks of life, what is becoming patently clear is the power and pervasiveness of uneasiness and fear that is impacting behavior in remarkable ways. We are collectively on notice that all is not well in the economy and we have internalized this point of view. The lack of confidence is now showing up in purchase decisions — even among those who can continue to afford more expensive options. We are emotional creatures and our emotions, at the core of brand selection decisions, are now telling us to stop, reassess and cut down. We feel better through frugal acts.

The Branded Pathway Ahead…

Here are some observations about the way forward.

Can your brand align itself with the consumer’s overwhelming desire for home, family and social interaction that acts as a buffer to the uneasiness around us?

Can your brand acquire a mission or purpose that transcends the functional conversation and creates new meaning and depth in your relationship with consumers?

The action is increasingly at the store shelf. What can you do to better tell your story at retail?

Have you given your brand a “compelling value proposition” review to determine if the functional, financial, intangible and emotional values are strong enough to keep your best users in the fold?

Can you segment your product portfolio to cover the price pressures coming from retailer’s increased emphasis and investment in their store brand programs? Are you in a position to help them with their private label needs?

Are you participating in social media platforms where you can a) start a two-way conversation with your consumers and b) listen to them about their needs and concerns?

For that matter talking “at” consumers is dead or dying. How can you build a better relationship based on authenticity, honesty and reciprocity?

What do you think the solutions look like?

By Robert Wheatley

Insight Not Demographics Drives Communication

One of our favorite blog sites, WonderBranding: Marketing to Women has a remarkably insightful post about how culture and behavior drivers can impact purchase decisions for female consumers. The analogy is embedded in what’s termed a “neighborhood concept” - the metaphor related to cultural cues or “microcosms” that distinguish and separate the flavor, ambiance and point of view of one neighborhood to another.

Her thesis: energy source + time horizon = purchasing process. The four neighborhoods are characterized in the graphic below:

In the end her point is this: sources of a woman’s energy (internal vs. external) have an effect on how decisions are made as well as her personal time horizons, described as “in the moment” or legacy related, meaning more “other” focused than “me.” One size indeed does not fit all nor one communications strategy.

Much of the time we’re looking at female or male consumers for that matter from a demographic angle. Yet insight like this can be tremendously important to helping us dial in communications that will resonate because the messaging is honed more closely to the targets needs and behaviors.

What do you think?

By Robert Wheatley

Fractured trust upends power of communications

Perhaps at no other time in the history of modern marketing have we been faced with such an incredible accumulation of contiguous scandals, recalls, startling revelations, bankruptcies, forced marriages, mistruths, half-truths, malfeasance, behavioral inconsistencies and general evidence of bad business behavior.

From miscreant members of the Clergy to chemical leaching plastic water bottles, lead-covered toys, and fallen sports legends, consumers have been bombarded with evidence that leaders, corporations, brands, institutions and communications cannot be trusted. People are learning rapidly that corporate messaging is suspect at best as buoyant reports of happy trails ahead may be masking an impending fall from grace. We discover even the most storied of conservative business icons in banking and insurance can fall under the spell of temptation to play fast and loose. Awesome out-sized basketfuls of assets are gambled away through investments in flimsy financial products constructed on a floor of actuarial quicksand.
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Used to be awareness and implied endorsement

By Robert Wheatley

In the good old days, PR was too-often viewed within the brand marketing mix as a below-the-line bit part player that delivered relatively inexpensive audience impressions with a lovely parting gift: implied endorsement of an outside and respected third party – the editorial media.

While “earned media placement” as its called continues to be a centerpiece of client expectations from their agencies and PR staffs, the substantive contribution of PR has transitioned. Today it is most certainly an above the line strategic leader and thus is integral to generating brand growth and new product trial.

Why? The consumer mindset has changed. Dramatically. How they make buying decisions has changed. Emotionally. How, when and where they consume media has shifted. Radically. It is no longer possible to force and dictate consumer behavior through sheer tonnage in conventional ad media spending.

The incredible volume of new products (over-choice) chasing consumers in ever more narrow and specialized categories, combined with the awesome number of media and mediums (inundation) clamoring for everyone’s attention, has precipitated a near total shut-down of what was once thought to be rational buying behavior. Consumers no longer simply absorb and act on the facts arrayed near them through marketing campaigns, packaging, retail displays and other touch points. Instead they go with their gut and perceptions.

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Can “Value Attribution” Confound Brand Communications?

Note: forgive the long post, but this stuff was too interesting not to pass along…

For the most part we operate as marketers and communicators day-in and day-out with a built in assumption that consumers listen to us, understand us and act accordingly. Of course, there’s ongoing debate about the real level of listening. Well, it also seems there’s the possibility that our messages are misconstrued or misunderstood or misinterpreted due to some funny ways humans operate to process information.

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New world order for brand building

By Robert Wheatley

We really appreciate and enjoy reading Patrick Scanlon’s think pieces and articles. His latest published in AdAge entitled ‘Winning in the Pick Economy’ charts the changes in dynamics between marketer and consumer in an age of the latter’s over-arching control.

Says Scanlon: “In today’s world, media are fragmented, markets are fragmented. Skews of race, sexual orientation, work life, digital experience, marriage and child status, plus other sociological forces crosscut markets even further. We have micro-trends, micro-markets and micro-meals. Only in rare cases can products, like oil and toilet paper, claim to be (both) ubiquitous and necessary. These days’ consumers choose from miles of aisles of cars, clothing, electronic equipment, food, beverages and other staples. To push is dangerous. To pull is difficult. We are engaged in a revolutionary new marketing model not driven by manufacturers or their marketing partners.”
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Understanding the interplay of value components vital to sound strategy
By Robert Wheatley

In his excellent book entitled “The Momentum Effect,” author J.C. Larreche describes the unique characteristics of momentum driven businesses that seem to grow more rapidly at the top line because consumers flock to their value proposition. He says: “Momentum powered firms don’t just offer good customer value, they offer compelling value - a value so intense and personal that it resonates with their needs in a gripping and powerful way.”

But value isn’t just a quick summation of benefits, features, price and the rational evaluation of those pieces. Read More»

Mapping The Distance Between Meaningful Ideas and ‘PR Stuff’

The headline above expresses more sentiment about this post than a quote lifted from anyone in particular. Of late we have run into business opportunities that remind us of the distinct paths businesses like ours can and must choose. And as we consider this what-are-you-on-the-planet-to-accomplish fork in the road, it bears mentioning that choice can (should) be just a meaningful to the agency as it is to the prospective client. Read More»

Why PR is so vital to building business and brands…

At a recent PR Agency Management Conference in New York, keynote speaker Aedhmar (pronounced Aim-er) Hynes, CEO of tech PR firm Text 100, offered a lucid and compelling portrayal of why PR strategy is now the load bearing wall of effective marketing communication. Her powerful point: trustworthiness is the primary characteristic that defines what forms of communication people will respond to. Trust — or its absence — is at the center of what drives consumer affection towards or away from businesses and brands.

The Internet and its many publishing and media platforms has put corporations, brands, products, technologies, formulas, recipes, ingredients, reputations, events, behaviors and outcomes up for review. It has helped expose deceit, failures and misrepresentations — while parading product mistruths, half-truths, white lies, the bold-faced variety and other charades for all to see. These events have worked hard to dismember the fragile eco-system between consumers and their confidence in certain forms of talking-at-you communication. Advertising’s prowess diminished, the aforementioned predictable, reliable path to impacting consumer behavior is being recast as an arrow equal among others in the marketing arsenal, no longer the bankable secret weapon.

The Glass House
At once the Internet is an empowering medium, a great playing field leveler that works in multiple directions to bring truth to the fore while layering on top an extraordinary depth of insider knowledge as sweet icing on the information-is-power cake. The opt-in nature of the Web phenomenon and its content rich menu offers us a hard to resist elixir of engagement, exploration, adventure and control. Couple this with TIVO-ing, out-of-control media clutter and a host of spamm-ish interruptions that has sent consumers running for cover and what do you get? Change. A complete re-stage is in the making of what constitutes the rules of successful consumer communication strategy. Consumers, solidly in the driver seat of brand relationships, are asking tough questions about trust, authenticity, even poking around reliability and safety of supply chain sources — let alone the relevance of brands and messages to their lifestyles.

We are reminded daily about the overwhelming evidence that word of mouth is the credible consumer medium for acquiring information about products and services. What’s going on here? What happened to take the old command an control marketing ship of state and turn it upside down — if not sinking it entirely?

The Great Un-Masking
The rise of citizen journalism, social media, web-based communication has helped fuel the outing and emperors-new-clothes-ization of marginal or deceptive products, commoditized categories, irrelevant businesses and soggy brand reputations.

We know more now about how and why some products are just minimally different from one another or even private label. The result: categories right and left are experiencing the pressures of price as the primary decision point on purchase. Quality is no longer a differentiator.

We now know…
The truth about punitive auto pricing/financing policies.
The truth about predatory mortgage lending practices.
The truth about fad diets.
The truth about smoking.
The truth about airline disclosure policies during delays and cancellations.
The truth about drug efficacy.
The truth about pet food and who makes it.
The truth about FDA oversight of our food supply.
The truth about why oversight of the food supply is needed.
The truth about lettuce production.
The truth about lead paint in toys.
The truth about __________.

Trust and faith go hand in hand. As credibility rises in importance to people its cachet grows in proportion to the diminishing sense of truthfulness from other sources. Trust is earned. Trust is at the core of authenticity, honesty and respect.

PR’s Role in Trust Building
Hollywood portrayals of morally bankrupt spin doctors aside, the fundamentals of public relations thinking and strategy is founded on cultivating trust. The forms of communication we work within are by definition content driven, information-centric and must be based on a foundation of credibility. The paradigm of the PR-to-editorial media relationship is built on providing reliable, defensible evidence to back up our assertions about technology or formula features and benefits. Our role historically is in forging lines of communication with environmental stakeholders, creating communities of trust between a corporation and its many constituencies. This is an outgrowth of a strategic mindset focused on earning trust and building credibility.

Sure there are corruptions of all this in business and public policy, too. What if trust is a key feature of what brings consumers towards a brand reputation? Or if the fracturing of trust has submerged the allure of a brand and rendered certain forms of communication suspect, then it stands to reason that communications strategy forged on trust creation should be the tip of the spear in building business today. Trust is earned through authentic performances and a fundamental desire to be demonstrably better. Public relations strategy is central to earning the respect of consumers. And trust is the tissue that connects brand reputations to those who buy them. PR is not just a source of cost-effective exposure, it’s key to growth and ROI.

Or are we really about to drop the ball…again
Profitable. Revenue. Growth. Business organizations exist to get and keep customers in their respective categories. The acquisition and retention of customers, assuming business model, market and product strategies are right, should support successful achievement of the primary mission. Looking at this from the outside in, all other imperatives and objectives would be secondary.

Ironically we find ourselves more often than not focused on other issues. Delivering media impressions. Securing specific media targets. Nailing key messages. Not that these things aren’t important. In terms of mission and strategy the company itself can also be ethical. You can be innovative. You can be environmentally conscious. You can offer a great place to work. You can have top-notch research and development capability. You can have precision-like processes and procedures. You can have technological prowess. You can have your fingers exactly on the pulse of consumer preferences. But in the end the sum of all these parts must lead to what? Profitable. Revenue. Growth.

Alignment…

Therefore it only makes sense that marketing and PR objectives are in sync with the organization’s business goals. In his book “The New Rules of Marketing and PR” author David Meerman Scott says: “Many marketers and PR people focus on the wrong measures of success like we want ten mentions in the trade press and three national magazine hits each month. What we need to do is align marketing and PR objectives with those of the organization. For most corporations that most important goal is profitable revenue growth.”

Scott’s example of the phenomenon at work is interesting. “This lack of clear goals and measurement reminds me of seven-year-olds playing soccer. If you’ve ever seen little children on the soccer field, you know that they operate as one huge organism packed together, chasing the ball around the field. On the sidelines are helpful coaches yelling, “Pass!” or “Go to the goal!” yet as the coaches and parents know, this effort is futile: No matter what the coach says or how many times the kids practice, they still focus on the wrong thing – the ball – instead of the goal.”

Start the strategic planning conversation about objectives on the business side first. This will help keep all minds and strategies focused on point. And will help drive investments in marketing and communications down the right pipe.

It’s amazing what can happen when the conversation about what you’re trying to accomplish centers on the business agenda first.