Something has happened to the way potential customers and clients respond to marketing and advertising — and it’s happened so rapidly most people are still scratching their heads and wondering what to do about it. It’s occurring across the board throughout all industries. Consumer advertising, trade advertising, product announcements and application stories are all drawing fewer leads. What’s going on?
There are a lot of reasons, and I think we’re in kind of a perfect storm that’s been brewing for some time. The first step to getting a handle on the solution is to understand the three most important factors:
Factor #1: It’s the economy, stupid.
Everybody remembers James Carville’s quote about the last recession in 1992 and it really still holds true today. Especially when the National Bureau of Economic Research (NBER), made the announcement about the obvious this past Monday. We are in a recession. And that’s not a surprise to anyone. People are holding onto their wallets tighter and waiting. Even people who have job security and plenty of liquidity are waiting. We all seem to be waiting. Waiting to see how the economy pans out. Waiting for prices to drop on the items we need and want.
Factor #2: This doesn’t look like 2006 anymore, Toto.
I was culling through data yesterday when I found a survey on Consumer Spending Attitudes for the 2008 Holiday Season. These figures are released every year and they are very important to retailers and other advertisers who need to forecast earnings for the year-end. The research was done by The American Research Group (ARG), a very well-respected research firm that has been conducting surveys and gathering poling data for over 30 years. The ARG said that consumer spending on the Internet had dropped for the third straight year. 30% of the people surveyed said they planned to buy gifts online, down from 36% in 2007 and 44% in 2006. That’s insane. That figure can not be correct. Who is being surveyed? People who answer the phone. I’m not sure about you, but I don’t answer my home phone anymore. I don’t know anyone who does without checking caller ID. For that matter, I know plenty of people who don’t even have a land-line anymore. How can a company publish significant and accurate data based on information collected from people who still choose to answer their home phone? It can’t be done. They’re still collecting data like it’s 2006.
It’s not just survey firms who seem to be slow to change and operating like it’s still 2006. Most companies are still marketing in the same ways they always have been and being unsatisfied with the results. In their defense, the marketing landscape has changed so rapidly even the smartest people have some degree of whiplash.
Factor #3: People’s buying approaches have changed
Today’s buyers are anonymous, smarter and generally don’t want to talk to you. Technology and the Internet has affected the traditional pre-purchase information gathering process. The Internet has given more choices and control to the buyer. It allows people to search for products or services they need and get detailed information without leaving a trace behind. Buyers want to remain anonymous in the initial stages of the information gathering process. They want information now, not in weeks, days or even hours. They often know a lot about your company, your products and services and competitive options by the time they contact you. In other words, by the time today’s prospect contacts you he or she has done their homework. Buyers generally will have a good idea of what they need and have figured out what they are willing to pay. Potential customers used to complain, “why can’t I get someone on the phone.” Now they may complain, “I can’t believe I can’t find any information about this online.” That means companies need more than a website to help potential customers make up their minds. They need dozens of information access points: blogs, social media interaction and comments on articles, wikis and more.
Blaming the messengers. If you listen to the news today, it seems that not only do people not read newspapers, but they also don’t read books or magazines, look at billboards, watch TV, movies or even listen to the radio. All of the mediums that deliver messages are offering fewer sales leads. Even web ads are down. But let’s really think about this. Does everyone really no longer read magazines and newspapers? Does everyone really no longer have any interest in new products or services? If sales are down don’t necessarily blame the messengers. Maybe it is that people are responding in ways that confound the tracking process, just like the survey example you just read about above.
The amazing vanishing customer! Like I said before, research is a much more important part of the buying process than it used to be. Buyers may start at an ad, a direct mail piece, a web banner ad, e-blast, personal recommendation, posting on a web article, blog or even Twitter. Buyers now gather as much information as possible about a product or service — and then seem to vanish for a while. They may finally contact you later via a variety of ways — leaving you wondering where they first learned about your product. And even when you ask people how they learned about your product, they may not really remember. Of course special web addresses, links, cookies and tracking codes are all great ways to track lead but in some ways they act like Black Boxes in airplanes — only tracking the last few moments of the customer’s purchasing approach. It also skews the data to make it look like the Internet is the only medium worth dealing with.
Be there for your potential customers when they begin to research.
Offline media isn’t going to go away. It will change dramatically over the next several years but it’s not going away. People will still listen to the radio, read books and pay attention to billboards and well designed direct mail and web ads. Businesses will still need to tell people about their products. The best thing you can do for your company is provide as many resources for your potential customers for when they start researching. After all, they are going to research and if they can’t find you they will find your competitor.