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Frugal Is the New Black

palau-joshua
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It seems as though you can't pick up a magazine or listen to a news report without someone chiming in on how there are "signs of hope" for the economy. And these economic conversations seemingly break into two camps.

The first believes we'll recapture the pre-recession glory days where both consumers and advertisers will return to spending. People will go back to buying houses, cars, and clothes without any concern. Those in this camp point to history. We're Americans; we have short memories. Only one month after 9/11, travelers were complaining about the lack of curbside check-in and the need to remove their shoes when going through airport security.

The other camp (which is where I side) believes that this economic period has changed us as a society. This wasn't the dot-com bubble of the '90s, affecting only one segment while others thrived. The recession impacted everyone. There is no discrimination by age, industry, or profession. We've had sequential growth in the unemployment rate, and Americans who had planned to retire within 10 years are remaining in the work force.

The New Normal

This recession has caused us to hit the reset button. A large majority will change their behavior. Even those of us not tremendously affected are still thinking twice about taking on expenses.

In my house, Santa will bring fewer items this year -- not because my kids made outlandish requests, but because my wife and I feel the money we've spent in the past would be best kept in our reserves. Consumers believe that the economic changes are the "new normal" and not just a short-term blip.

Those of us in the advertising space have been waiting for the consumers to return so that our clients will start spending again. But the recession has caused a sociological change in consumer behavior that may impact how companies market to us.

Keeping Your Base

Sometimes people look at search as only an acquisition model. In this day of comparison shopping and consumer fragmentation, however, there is money in keeping your base of existing customers

Instead of focusing on the acquisition side of your business, let's spend some time keeping the people who are here. According to an April 2009 BancVue survey, 67 percent of Americans would be willing to switch banks in the next year. Isn't this a big deal for banks?

There are plenty of "switch" trigger words, such as "best" and "compare," which should signal to a brand that customers are looking. Target those folks with comparison tools and content so they know you have the best checking interest rates or the most "no fee" ATMs. You'll gain some new customers and also keep a portion of that 67 percent.

Changing the Message

When the economy returns, you can't assume that what worked before will continue to work. If we've truly changed, search queries will show this.

We've already seen that people are more frequently inputting search terms with keyword qualifiers like "value," "low cost," and "deals." Search marketers need to focus their strategies around these consumer needs.

Even if your brand hasn't always been known as affordable, now is the time to play up money-saving items. As much as BMW wants to push the 5 Series, they need to acknowledge that people may be looking for more affordable or hybrid vehicles.

Again, offer incentives to current customers while reaching out to new customers. Yes, building out copy and landing pages that speak to new trigger words is different, but businesses need to adapt to survive.

Bundled Services

We must find ways to sell existing customers more while pulling in new customers through incentives. Targeting messages around bundled services or a "third night free" or "10 percent off oil changes" can all reach this new, more frugal consumer. Consumers are looking for ways to stretch their dollars (just like marketers are), and playing to that will be more effective than previous triggers such as luxury or convenience.

As a good marketer, you've also (hopefully) spent a good deal of time learning about your customers. Depending on your industry, you should have the opportunity to look at frugal consumers and target them with the other services you offer. Again, this keeps them in your network and increases the chances that they will remain loyal over time.

Embracing the New Landscape

Despite the far-reaching effects of the recession, people's needs remain constant. Consumers still need cars, clothing, and health care. People still desire entertainment and information.

What has changed is their motivators. People may no longer want your cars, your clothing, or your health care options. People may choose a short camping trip over an all-inclusive getaway -- or look for career retention advice instead of how to get rich quick.

Service the needs and desires of your target audience, and appeal to their motivations. You may need to adjust your messaging and your offerings, but by staying attune to the needs of your customer base, you can ensure your success in any climate.


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