The rising levels of uncertainty about personal fortunes will lead consumers to reflect upon priorities and some of their key brand relationships.
While personal expectations about financial wellbeing will fall, consumer cynicism and demands on business could increase.
The temptation for many brands will be to compete solely on price, which will work for some, but not all, because the world has moved on in two important ways.
First, the consumer interest in how products are made and services delivered – driven by the media and brands themselves – may not disappear as quickly as some of our financial institutions. It could prove to be a social trend with deeper roots.
Second, some consumers can be wary of low cost, because they believe in the concept of ‘you get what you pay for’. Taking the low-cost road involves challenging that notion.
Brand managers need to know two basic things: ‘who they are’ and ‘who their audience is’, but they also need to know what to obsess about.
It is important to obsess about the values that drive consumption and reputation, as well as micro-targeting lifestyles and trends. It is also important to obsess about how to motivate behavioural change, as well as media relations. The PR industry has a tendency to be inward-looking and obsess about the wrong things.
At TLG we focus on generating ‘core values connections’ between brands and their stakeholders through ‘Thought Leadership’ campaigns. According to our definition, these are campaigns that raise brand awareness, create attitudinal change and deliver behavioural change.
Two trends are emerging as defining consumption behaviours among the next generation and creating a massive opportunity for business. First, consumers want brands to help them make ‘guilt-free’ purchases. Second, they’re less trusting of business and demand more information than their parents’ generation.
A new consumer proposition has emerged, best described as ‘value plus values’. Evidence indicates that where price is comparable, the values of a brand are, and will continue to be, the discriminatory factor.
This would suggest that PR, now more than ever, should concentrate on demonstrating what we call ‘values alignment’ between consumer and corporate, especially to lock in brand loyalty during this downturn.
Genuine Thought Leadership campaigns can deliver competitive advantages and build brands in which consumers believe. What do we mean by Thought Leadership? For example, if a car manufacturer designs a faster or cleaner engine, that is an example of innovation. But if they influen-ce the way in which people drive – or how competitors build cars – that is Thought Leadership in action. When brands influence behavioural change it is a good indication that they’ve successfully made a ‘core values connection’ with the consumer.
New product development – both business-to-consumer and business-to-business – reflects a growing instinct that consumers are interested in making ‘conse-quence-neutral’ purchasing decisions, hence an abundance of ‘green’ products.
Business needs to create a coherent values-based story for all goods and services and to think beyond ‘green’ (corporate responsibility can have other manifestations across goods and services). There is not a small bunch of consumers who buy ‘ethical’ products, and the rest of us. The so-called fault lines will shift, not least as a result of social and economic changes.
This era demands more of PR and marketing agencies, many of whom are still dominated by old thinking and specialise in selling celebrity, surveys and stunts.
As consumers increasingly ask whether a brand represents their values, it is the companies that can successfully align their values with those of consumers that will win brand loyalty in the 21st century.
This demands a closer relation-ship with consumer trends and a willingness to be bold and engage in Thought Leadership campaigning and forge values-based connections.
Malcolm Gooderham is a director of TLG Communications