Frugality is chic
Signs that conspicuous consumption is passé abound, even as business sees an upturn in consumer spending. Savvy businesses will seize the opportunity of an economic rally dovetailing with price-sensitivity to build brand loyalty.
The Wall Street Journal reported April 26 that first-quarter sales show a second consecutive period of gains with consumer-oriented companies, retailers and restaurants enjoying increased sales. By some measures, these trends indicate the economy is pulling out of recession.
However, amid upward economic trend reports, value remains a top priority and thriftiness is a virtue.
The frugality is chic and evident in everyday conversations when pricey vacations are discussed in apologetic tones and a compliment on a designer bag is quickly dismissed with “got it at the outlet store with a coupon.”
Business names reflect the thriftiness trend. A closeout boutique in Tucson calls itself “Frugalista.” Upscale Loews Ventana Canyon has dropped “resort” from its name to keep the corporate and government clients.
Anecdotal evidence is supported by the 2009 Shopping Habits Report, a survey published by the International Council of Shopping Centers. Eighty percent of consumers have cut back purchases in past 12 months and only 40 percent expect to increase their shopping behavior when economy improves.
The report’s overarching conclusions — that buying, having luxuries can be embarrassing and that recession-spurred changes in buying behavior unlikely to be short term are an opportunity for consumer-centric businesses to build brand identity and loyalty.
At Caliber, we recognize that brand loyalty is an asset for any business — customer loyalty drives profitable business growth. This unique period of consumer spending trending cautiously upward is the ideal time to develop a strategic brand-marketing program that builds awareness, preference and customer loyalty for your product or service.
A few tips and tactics to consider:
• Giving price-cautious clients and consumers added value helps generate that coveted brand loyalty. Customer loyalty programs that reward frequent purchases with a free item or steep discounts is a proven, successful tactic.
• Being the host of an event or sending emails and notices to clients that provide them useful, first-to-know information establishes your company as an expert.
• Improving the quality of your products or service to always be fresh, new and better than the rest differentiates your business.
• Putting the customers’ needs at the top of your priority list and ensuring customer service — especially for a new client or first-time buyer — is exactly what builds trust and loyalty.
• Recognizing that perception of value may not be grounded in reality, be nimble enough to adjust your strategy.
Loews Ventana Canyon dropped “resort” from its name as part of a national, post-AIG-bailout trend in the luxury-hotel business, said Brian Johnson, the hotel’s managing director, in the Arizona Daily Star.
“Nothing else has changed. We haven’t changed our service. We haven’t changed our staffing. All we’ve done is take ‘resort’ out of the name, because if you don’t, you don’t even get to bid on the business,” Johnson said in the Star.
This economic crossroads, where consumer spending is trending upward but is prudent, is the ideal circumstance to build brand loyalty.
This article is the first in a series of six articles we will be publishing during the next months on long-term recession realities likely to affect your business.
(Thanks to Dystopos for the photo.)