Bureau West

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

Advertisers are looking for ways to make direct mail more effective; here are two new approaches that combine direct mail with the power of the internet:

• A company called Dukky has an approach to turn the coupon in the mailbox into a viral-marketing phenomenon.  They use a personalized web address that is pre-populated with a target customer’s data. The individualized URL leads each customer to a microsite created exclusively for that individual customer. It mirrors the direct-mail campaign and provides the customers with the “payoff:” a coupon they can print out, for example. But before the payoff, they are required to share more information about themselves, which is then collected and tracked. Finally, the customer is offered a quick way to share the offer with friends through social media: If she likes the offer, she can post it to her Facebook page.

• Interpublic Group’s Mediabrands is teaming up with AOL to improve upon circulars and Sunday newspaper inserts.  They are working to create smarter online pamphlets that will prompt consumers to answer questions about their shopping preferences, such as their favorite brands or designers, and then serve up a catalogue of relevant products, retail locations and sales on related items. Consumers will also have one-click access to instructional videos and manuals. They aim to increase consumption by making shopping easier for people, seamlessly equipping them with Internet information they would otherwise hunt and peck to find.

To learn how to best engage your prospects and customers, give us a call at (818) 752-7210.

Sources: “The Future Has Been Delivered to Your Mailbox,” Entrepreneur Magazine, July 2010; “AOL, IPG Race To Keep Up With Consumer Habits Online,” Forbes, 6/17/10; “Meet the next generation of retail shopping,” IPG Emerging Media Lab Blog, 6/18/10

My colleague Lauren Isaacson just wrote an interesting white paper about the state of the iPhone in North America.  Among the highlights:

• The strongest growth for iPhone users is coming from people making between $25K and $75K. That bracket is growing at three times the rate of those making over $100K.

• 32% of mobile internet users are open to seeing ads on their phone as long as it is in exchange for something of value. Examples can take the form of free applications, access to information, or discounts on wireless bills.

• Tweens and teens are voracious app downloaders. Last Christmas application downloads for iPod Touches far surpassed (172% greater) those for the iPhone as kids raced to populate the screens of their brand new gadgets. This is great way to engage the youth market.

Source: “2010 State of the iPhone in North America,” Curio Consulting, July 2010

I recently returned from attending the Worldwide Conference on Qualitative Research in Prague.  There was a great presentation given by fellow researcher Wendy Gordon on the topic of behavioral economics, a field that looks into how people make choices.  Numerous experiments have shown that logic is not the only factor in making choices.  Rather, people’s choices are strongly influenced by:

• The context (i.e., the comparison set, the other choices available)
• Other people (what our friends and colleague choose)
• The person’s mood at that moment

An important implication of the above: when we conduct research and ask people why they made a choice, respondents look for logical reasons even though the choice may not be completely rational.  That’s why we should consider asking questions such as “how,” “where,” “when” and “who” before asking “why.”  In other words, learn as much as we can about the decision-making process without respondents’ logical analysis of the process.

For example, let’s say we wanted to learn more about how people go about deciding to purchase exercise equipment.  We could ask people who recently purchased why they made that choice.  But we might obtain even more valuable results by asking potential purchasers questions about what else they might consider buying when considering the possibility of purchasing exercise equipment.  Or how many of their friends use exercise equipment, or go to the gym, or do nothing at all.  Or conduct an exercise asking respondents to describe the typical exercise equipment purchaser, then the typical gym-goer, then themselves.  We look for ways to get people to tell us how they decide without going into “rational mode” and telling us how they think they should be making the decision.

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

Sources: “Making inspiring big theories into real chunks that have value,” Wendy Gordon, Worldwide Conference on Qualitative Research, May, 2010; Bureau West research