Chapter 1

Understanding Consumer Values and Mind-sets

IN THIS CHAPTER

Understanding (and embracing) a new culture of consumerism

Reaching across and connecting generations

Creating trust equity in a low-trust society

Building relationships around a common purpose

Changing customer behavior with fun experiences

Consumer behavior, attitudes and loyalty constantly change, and more rapidly so in a dynamic market and society. Business owners, managers, and marketing professionals all must pay close attention to these changes and learn to adapt to meet new needs and demands.

The 2020s started out with more change than most of us could ever imagine. The way we shop was not excluded. Loyalty to brands shifted and so did the tendency to buy just for the sake of buying. Consumers starting rethinking what they value most in life and how they purchase. Research firms like Deloitte, EY, McKinsey, and Nielsen have dug deep into how consumers have evolved in recent years and what to expect in the future.

This chapter presents some of those firms' key insights as well as tips for applying them to your marketing programs. I let you in on what you need to know to keep up in all industries and with businesses of all sizes. In this chapter, you get started on a successful marketing journey.

Assessing the New Consumer Culture

A study by NielsenIQ showed the COVID-19 pandemic and its economic repercussions changed how 67 percent of consumers shop. Most said their purchases became centered around necessity more than frivolous wants, and they don't really see that changing anytime soon.

EY's report US Future Consumer Index 8: Do consumers drive the market or does the market drive consumers? (covering May 2021-October 2021) showed substantial bumps in the importance of service, quality, price, and, not coincidentally, product availability. These priorities are also not expected to change soon. Add these to the expectations consumers have that brands operate with high environmental, social, and governance (ESG) standards, and it's a whole new world of consumerism for brands across all business sectors.

Kathy Gramling, EY Americas' consumer industry markets leader, summed up the firm's research with the statement that perhaps we are in an environment where the consumer doesn't always decide what matters most, but rather the market forces consumers to make new choices about what's important.

As we explore how markets and consumers have changed, businesses small and large must find ways to adapt.

Following are examples of change in purchasing behavior sparked by the onset of the COVID-19 pandemic:

• 50 percent say their values and the way they look at life have changed.
• 45 percent don't want to go back to living exactly like before the pandemic.
• 57 percent say they try to save more money than in the past.
• 60 percent expect to save more in the long term and to be more aware/cautious about spending.
• 48 percent buy less to save money.
• 58 percent will continue to focus more on value for money spent in the future.

The dichotomy of the growing emphasis on spending less is that consumers have been conditioned to expect greater levels of convenience, including both online and in-store shopping options, home delivery, and curbside pickup, without paying for these extras.

Another very telling trend that no business can ignore is the sharp rise in e-commerce since 2020. According to the United Nations Conference on Trade and Development, the e-commerce sector of the global economy grew from 16-19 percent in 2020, which was considered a dramatic rise. Online business-to-consumer (B2C) sales for the world's top 13 companies generated $2.9 trillion in 2020, according to the United Nations report. Global brands you'll recognize from the top 13 that grew substantially while small businesses struggled during the pandemic include Walmart at #1 followed by Amazon, Schwarz Group, Aldi, and Alibaba, rounding out the top 5.

In the U.S. alone, from 2018 to 2020, online retail sales rose from $519 billion to more than $791 billion. The online share of total retail sales grew from 10-14 percent in just those two years. Walmart's sales were up 72.4 percent during this period.

For businesses of any size, the new consumer culture and economic reality can be daunting and invigorating at the same time, especially when you consider that market conditions and consumer priorities have changed, but human nature has not. We are still governed by emotions and attitudes that influence how we think, what we buy, and how we assign loyalty. The availability of affordable technology for crafting and sending messaging personalized to the emotions that trigger behavior among various consumer segments continues to level the playing field.

No matter the nature or size of your business, opportunities are abundant to learn more about your customers and what matters most to them. Staying on top of consumers' preferences and trends is key to success. The more knowledge you have, the faster you'll reach your destination.

Understanding the current marketing environment

With all the channels of communication and technology available today, you can discover just about anything you need to know about your customers' wants, needs, expectations, and much more.

You can also monitor consumers' attitudes, political preferences, and lifestyles on social media and insert your messages into their personal pages and sites they browse. And you have the ability to analyze their past behavior and scientifically predict their future behavior using real-time data and artificial intelligence that knows few bounds. As a result, consumers expect you to know their specific needs, and engage with them accordingly, if you want their business.

Beyond understanding and communicating with them on an individual level, today's consumers expect you to align with their social, environmental, and even political values. If you don't, many will find a brand that does, no matter how much you've done for them. With all the options available across all business categories, loyalty is becoming harder to secure.

As a marketer today, you don't just have to up your game; you have to play a whole new one if you want to attract and keep customers for the long term, the only way to succeed in a market where barriers to entry are low in many business categories and competitive pressures increase almost daily. You have to change the way you distribute your products and services, how you reach and communicate with your customers and prospects, and how you engage them emotionally, and how to enable them to interact with you. Additionally, you have to offer much more than a great product and value point; you have to offer consumers a fulfilling experience that adds value, happiness, or excitement to their lives.

This book is about doing all the above and more, effectively and affordably, in an up or down economy, for any business in either the B2C or the business-to-business space. It's also for entrepreneurs starting a new business and marketing managers at regional or national businesses wanting to have a big impact on their brand's revenue and competitiveness, and their own careers.

Beyond going through the essentials of building marketing and sales plans, digital engagement, e-commerce programs, promotions, distribution channels, pricing, and many more strategies, this book provides guidance on how to develop emotionally relevant, creative experiences, online and off-line. You discover the power of emotional selling propositions for capturing trial and lifetime value in an increasingly complex consumer culture. I tell you how to analyze marketing campaign data beyond open and click-through rates, measure results, and identify the best ways to spend valuable resources.

Before we get into the how-tos and guidelines for doing these things, you need to focus on the mind-sets and behaviors inherent in a new era of consumerism largely influenced by recent world events, societies divided by misinformation and political agendas, and a volatile economy. No easy task.

Addressing a complex consumer mind-set

Today's consumer mind-set can be summed up in just two words: distracted and demanding.

Distracted: Levels of distraction from being "present" at any given moment, place, or time just keep growing. A few years ago, adults in the U.S. spent around 11 hours a day looking at a screen. That number is now more than 17 hours a day, according to a study by Vision Direct that projects the average U.S. adult will spend around 44 years of their life staring at a screen. While many of us use screens in our daily work routine, we are relying on screens more and more for our recreational needs, which have gone up substantially since 2020, according to a report by the National Institutes of Health. Other reports show that we can't be without our phone at our side for more than 2 hours a day. We use our phones to play games, check emails, look for validation on social media, text with friends and even strangers, shop, browse customer reviews, check out locations, and so much more.

Demanding: Consumers are demanding more and more that brands cater to their individual needs and offer multiple options for doing business with them, reward them for their business,...