How to Engage the 2009 Customer Mindset

The U.S. economy shed 2.5 million jobs in 2008 – 1.9 million in the last four months of the year alone. That makes 2008 the worst year for employment since 1945. Simply put that means consumers' have stopped their usual practice of spending tomorrow's money today, and are now looking for ways to scale back. How many of you were in a marketing leadership role in 1945? Me either, in fact my father was only 10 years old at the time. With that in mind it's safe to say most of us are leveraging strategies and working from a marketing mindset that has never been truly tested under such extreme financial conditions. And no matter how many - "How to Thrive in a Down Economy" – type white papers and case studies you read you know in your heart that those papers were not written with a historic downturn as the backdrop.

So what is a marketing leader to do? Well, first let’s quickly review the evolution of marketing as reflected in the American Marketing Association’s (AMA) definition, and then see what we can apply to the current situation.

The Definition and Role of Marketing Has Changed Over Time

· The pre 60s rise of brand products and advertising agencies with a focus on mass communication.

“The performance of business activities that direct the flow of goods and services from producers to consumers.” AMA, 1948 & 1960

· The 70s and 80s beginning of direct marketing with a focus on the identification of target groups.

“The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” AMA, 1985

· The 90s rise of loyalty programs with a focus on databases and analysis systems.

· The 2000s evolution of marketing with a focus on creating value for the customer as well as the organization.

“Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” AMA, 2004

“Marketing is the activity, conducted by organizations and individuals, that operates through a set of institutions and processes for creating, communicating, delivering, and exchanging market offerings that have value for customers, clients, marketers, and society at large.” AMA, 2007

Ok, that was interesting as you can almost imagine the marketing strategy conversations changing as the definition evolved. A few sound bites from those meetings might go something like this:

• "Consumers don’t know what they want until we tell them."

• "Let's launch campaigns and bombard our target markets with messages."

• "If we listen to our customers they'll tell us what they want. And if we listen hard, we can create better products for them."

• "Let's engage our customers via dialogue and personalized communications and invite them to actively participate with our brands via blogs, viral video and other social media sites.”

Customer Engagement and the 2009 Customer Mindset

Will the current focus on customer engagement alone be enough to survive in 2009? Not if you can't make quick adjustments to the feedback your customers and prospects give you in the form of their redefined ideas of "value." The conditions we are experiencing today have heightened consumer awareness regarding the way they spend money and have deeply affected their behavior. Now more than ever marketing will need to work and collaborate with all functional areas, including; R&D, Sales, Customer Service and Finance to make timely decisions around product bundling, pricing, distribution, and service that reflect the redefined customer value mindset. I don't know about you, but here are just a few 2009 customer mindsets I've noticed:

• Sensitivity to total price ... not total savings.

o Possible application: Unbundle your products and services and stop trying to force the customer to buy the complete package. Based on your P&L offer the best possible deal you can on the service or product they are requesting. Yes, that means you may need to turn down the cross-sell / up-sell mentality for awhile.

• Intolerance of poor customer service responses.

o Possible application: Move decision making closer to the front line and let your employees listen to the customer first. Your customer is trying to fix an immediate pain point – like a serious decrease in cash flow due to a job loss. They didn't call to be sold on why they should keep all their current services – or to be lectured on the financial penalties of discontinuing the contract early. If you are still interested in maintaining the relationship and at least keeping part of their business - it's time to quickly put that deal on the table.

• Focus on quality and trust.

o Possible application: Yes, they know you have a quota and are trying to close the deal now. But their confidence in the economy has been shaken down to its roots. That means it is going to take them longer to make a decision, so don't try and close the sale after the first date. In fact, they are probably not looking for a long-term commitment with a new "business partner." So, if you have processes or methods that will help reduce their risk (and build trust) that are more than just high-level business speak, now is the time to present it. By the way, tell your “hunters” to tone down the pressure ... no amount of arm twisting is going to make the deal go faster.

How do you see marketing leadership in 2009 and what new customer mindsets are you addressing?