A new Pew Research survey shows a majority of consumers have cut back on their spending.  But at the same time, the survey shows more optimism than it has found since before the recession started: 62% of adults say they expect their financial situation to improve in the coming year, compared with just 19% who say they expect it to get worse.

In order to obtain more depth on this topic, Bureau West conducted qualitative research with consumers from a range of socio-economic groups.  We asked if they’ve cut back on spending and if so, how.  Similar to the Pew survey, we found a “new frugality” attitude.  Consumers are placing much more emphasis on obtaining value for money.  They’re looking for deals and using coupons much more than they used to.  Many are paying closer attention to the difference between “wants” and “needs.”

• “When buying, I’m thinking more about whether I really need what I’m considering buying, and if so, whether there’s an opportunity to save money by waiting or finding a deal.”
• “The best thing to do is stop spending on stuff you don’t need. If it isn’t an immediate need don’t spend the money especially if you don’t have it. I looked in my closet and realized I really don’t need any more clothes or shoes.”

At the same time, many participants are also splurging from time to time.  These may be small luxuries, but may indicate some pent-up demand.  For example, while many participants said they eat out less, eating at a restaurant is still a favorite way for people to treat themselves.  Consumers also mentioned home improvement projects and trips (both local and international) in the “splurge” category.

• “Instead of eating lunch from home, I’d go out to a nice restaurant or if it’s been awhile, I would buy myself a new pair of shoes.”

For marketers, all of the above may indicate an opportunity: consumers are willing to spend if they’re convinced they’re receiving value for money. Of course, when we conduct research to learn how consumers define value for a specific product, we need to be careful not to ask leading questions.  Rather, we like to give them choices, perhaps comparing different combinations of features and costs.  In some cases, we may use a mix of individual and group research methods in order to learn about consumers’ independent opinions but to also see the influence of group dynamics, which of course play an important role in consumers’ perceptions of value.

To find out how your prospects and customers define value, give us a call at (818) 752-7210.

Sources: “How the Great Recession Has Changed Life in America,” Pew Research Center, July 23, 2010; Bureau West consumer research, July, 2010