85% of leading brands are going to lose their dominant market share position because they followed the wrong path to improve business metrics. Consumer behavior has changed forever.
2. Economists fear that the recovery will leave
more people behind than in past recessions.
Large companies are increasingly owned by
institutional investors who crave swift profits, a
feat often achieved by cutting payroll.
Consumers remain reluctant to open their
wallets with unemployment stubbornly high
and home prices falling.
The consumer-confidence index fell to 46.0 in
February, from 56.5 a month earlier, its lowest
point in 10 months.
In terms of consumer spending, it's not really
a strong recovery," said Brian Bethune, an
IHS Global Insight economist, adding, "We
continue to set ourselves up for
disappointment."
3.
4.
5. 1. The economic outlook will improve slightly
but the consumer economy will remain
weak.
2. Rebuilding brand and company reputations
is going to be a critical component to new
business models.
3. Brands need to change the mind shift from
“market share” to “profitable market share”.
(Smaller markets that are more profitable).
4. Pricing will put more pressure on brands to
clearly communicate their value to frugal
consumers.
6.
7. Six in 10 Americans (62%) now say they more enjoy saving than
spending.
Nearly six in 10 Americans (57%) now say they are spending less
money in recent months than they used to, up from 50% last July
and 53% last April.
Thirty-eight percent of all Americans say this reduced spending will
be their new, normal spending pattern.
8. Almost half (45%) say they are brown
bagging lunch instead of purchasing it.
Two in five (39%) are going to the
hairdresser/barber/stylist less often and 8%
have considered doing so.
One-third of Americans (34%) have
switched to refillable water bottles instead of
purchasing bottles of water while 10% have
considered doing so.
The media is also taking a hit as 33% of
U.S. adults have cancelled one of more
magazine subscriptions, one in five (19%)
have cancelled a newspaper subscription
and 22% have cancelled or cut back on
cable television service with an additional
one in five (20%) having considered doing
so.
Results of The Harris Poll of 2,576 adults surveyed online between
January 18 and 25, 2010 by Harris Interactive
9. Consumers can instantly find a
profusion of brands or products to
meet their needs but would just as
quickly abandon any choices that
somehow fell short.
The recession has increased and
spotlighted this behavior leading to
a challenge for traditional branding
elements. Starbucks
found
regular
customers,
fatigued
by
$4
coffees,
began
defecting
to
cheaper,
good-‐
enough
competitors
like
Dunkin’
Donuts.
10. Essential to the "go forward" economic outlook is whether consumer
spending will return to pre-recession levels or reflect a "new normal"
spending pattern.
The significant shift to saving in American preferences, as opposed
to spending, suggests an important change in consumer
psychology.
More than half of the nation's consumers across socioeconomic
groups say they are continuing to spend less, despite the claims of
many economic observers that things are getting better and
recovery is underway.
Two-thirds of consumers who are spending less -- and 38% of all
Americans -- say their current reduced level of spending is their
new, normal spending pattern. And significant percentages of
Americans across all major demographic groups say this is their
new normal.
11. Increasingly even affluent consumers are
economizing;
Research among more affluent consumers has
revealed mounting dissatisfaction with
excessive consumption.
Many desire a more wholesome and less
wasteful life.
They’re recycling more, buying used goods,
and imbuing their children with traditional
values—behaviors that dovetail with the
growing demand for simplicity and a solid,
though currently slowing, interest in green
consumerism.
12. Recent research from Nielsen on top
CPG trends for 2010;
Consumers are seeking value for the
dollar and brand differentiation.
Consumer
constraint will become the
“new normal”
Consumers will also focus on value, with
widespread discounting forcing brands to
differentiate themselves beyond simple
low price.
13.
14. While the new normal means the
economy will have a financially firmer
consumer base to build on going forward,
it also suggests American business will
need to make some significant
adjustments.
That is, businesses will have to join their
consumer counterparts in adopting a new
normal -- not only in terms of spending,
borrowing, investing, and fortifying their
balance sheets, but also in terms of
product design, strategic positioning,
and customer/employee engagement,
as well as organic and acquisition
growth.
15. 1. Reduce costs by focusing on operational
efficiency.
2. Use real-time data to spot new opportunities.
3. Translate corporate objectives into aligned
actions by employees.
4. Reward top performers
5. Ensure core values have meaning
6. Employee ambitious, flexible and adventurous
managers in key positions throughout the
organization.
7. Measure, optimize and improve all business
metrics continually.
16. Companies that attend to improving
operational efficiencies fare better than
those that focus on reducing the number
of employees.
Employees feel management is
committed to them and they are more
creative in reducing costs.
They don’t spend their time worrying
about job security.
As companies try to rehire, costs tend
to increase and quality suffers.
17. Executives and employees start
approaching every decision through a
loss-minimizing lens.
The organization tries to do more with
less which results in lower customer
satisfaction and thus loss in customers.
Cost-cutting becomes centralized with
finance cutting costs across the board
without regard to initiatives that may
spur growth.
Pessimism permeates the organization
and employees feel disempowered.
18.
19. Many companies continue to miss
market shifts that rivals exploit.
To indentify gaps in the market you
need real-time data and a process
to distribute it through the
organization.
Supplement with feedback from
employees who are in contact with
consumers/customers.
One of the best sources of real-
time data is social media but too
many companies are using social
media as a push channel and not
listening to what consumers are
saying.
20. Ensure that every executive
within the organization
understands the corporate
objectives.
Ask how executives are
translating corporate objectives
to the rank and file ?
How are you going to measure
each departments alignment
with corporate objectives ?
21. A passionate employee is worth 3
mediocre employees.
Reward calculated risk.
Learn what incentives work best for
your employees.
Get rid of people who are always
saying the “sky is falling”.
Get feedback on your key
managers, ensure they are in the
right positions.
22. Rather than print posters listing company values and them put them
up in conference rooms and the lobby executives should breathe life
into the corporate values by hiring and promoting individuals who
demonstrate adherence to those values.
23. One big inning does not mean that you are
going to win the game. The business
environment is changing too rapidly.
Your competitors are always going to be in
your review mirror. You need to keep one
step ahead of them.
Technology can help you become more
responsive but don’t discount the “human
connection” of determining what data
means and making the right assumptions to
leverage business objectives.
24. Hard Realities
Companies waiting for a
return to normality following
the recession may be
disappointed. Their
customers have tried
cheaper products—and
actually like them.
85% of market leaders get
dislodged during a recession.
Buzz means nothing today,
engagement means Progressive
companies
stay
closely
connected
to
customer
needs
and
use
customer
needs
as
everything.
a
filter
to
make
investment
decisions.
25. Things executives can do to achieve self-awareness and personal
mastery in leadership;
Monitor your performance. Note areas in which you excel and need
improvement.
Realize that failures and mistakes are just one step on the road to
success.
Recognize that being aware of the impact that your behavior has on
other people is a critical leadership skill.
Remember that when criticism is difficult to accept, there is
probably some truth to it.
And, finally, learn to give yourself and others credit for improving.
26. The economy has changed consumer behavior.
Even consumers with good jobs are stressed about the future and
one way to eliminate that stress is to save more and spend less.
The elements of branding and marketing have also changed.
Operational efficiency coupled with cautious cost cutting can
improve business metrics but a careful balance must be weighed.
Executives need to examine their leadership principles and guide
employees with actionable priorities.
Reward passionate employees who are willing to take risks to
benefit your customers.
Real-time data is invaluable to your company find a way to listen to
the market, competitors and consumers.
Measure, optimize and improve all business processes.
27. Richard Meyer
My CV http://www.richardameyer.com
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