Much has been both said and written about the decline in consumer spending during the recession; much less is said about the opportunity that lies in a highly disrupted marketplace. While it’s true that customers are more knowledgeable (and often skeptical) than ever, this recession has done what generations of marketers and market research companies have tried and failed to accomplish – opening consumers’ minds to new brands and new options.
Kelton Research’s consumer tracking study “The Changing American Consumer” demonstrates an increasing willingness to try new products even as spending declines; it’s our belief this indicates tremendous opportunity to position brands to steal considerable market share in the next year, allowing for tremendous growth once the recession ends. Using research to understanding the touchpoints that appeal to this “new consumer mindset” is vital in positioning your brand for future success.
The State of the Consumer Market
As the markets crash, people panic. We believe that panic creates an “inverse bubble” –one that has precisely the opposite effect of the recent tech or real estate bubbles. Instead of artificially driving profits and prices up, the inverse bubble artificially pushes them down. But as with any other bubble, it will “pop” –and how your brand is positioned when it bursts is vital. A few questions every company needs to ask themselves:
- Did reactive pricing decisions damage the brand?
- Will you have taken advantage of disrupted purchase behaviors to win new customers?
- Do you understand what changes are temporary, and which are permanent?
- How are customer mindsets continuing to evolve?
The Opportunity: don’t believe an opportunity exists during these dark economic times? A few data points should convince you:
- People Are Reconsidering: Nearly half (48%) of Americans report considering brands they haven’t considered before.
- People Are Noticing: 44% of Americans report paying more attention to advertisements than they used to.
- People’s Mindsets Are Changing: While eventually the recession will end and purchase attitudes will settle, some attitudes may stay; 56% of Americans see the recession as an opportunity to start living a less materialistic life.
Necessity of Market Research
New “Brand Bonding”
For many brands, this is a chance of a lifetime to grab market share - media is cheap and minds are open. In order to ensure that you are part of this new “brand bonding,” market research is needed to understand precisely how the new consumer mindsets affect your brand and your category specifically, and the new communications strategy you’ll need to reach them. While price is important, it doesn’t –and can’t –define most brands over the long term.
Relevant Studies to Consider
While the best use of research and correct methodology is highly individualized for each brand, a few studies all marketers and market research firms should consider:
- Key Assumptions and Mindset Test: Every brand works off key internal assumptions about your customer. Many of those no longer hold true. Are the attributes you base your communications on still relevant? Is a different approach to similar services needed?
- Concept Tests: As more people consider your brand, it’s crucial to understand how new products and services could make your brand appealing to a broader audience. What can be developed to grab as much new share as possible without alienating core consumers?
- Communications Testing: With people paying more attention than ever to communications and media available at discounted rates, now is the time to test and then invest. Whether conducting ad or communications testing, developing new stated claims or other stats that can be pitched to the media, or coming up with the precise positioning and words that appeal to a wider audience, research is a fundamental building block that ensures your media spend will be effective.
- Ethnographies and Qualitative Deep Dives: Mini ethnographies or qualitative deep dives are an excellent way to move beyond the functional and uncover emotional touchpoints that can set your brand apart. How do consumers talk about and think about your brand? How has this changed? What needs are going unmet and how can your brand capitalize on this?