Needs you may not know your customers have

One-to-one marketers have traditionally focused on satisfying the functional and emotional needs of their customers. A bank knows that a customer who has just taken out a home loan will soon have a need for home insurance. This is a functional need that it quickly moves to serve.

The same bank also knows that all customers are not created equal. Some are worth more than others – and have an emotional need to be recognised as so. The bank caters to this emotional need through loyalty programmes, reward and recognition initiatives and exclusive service privileges.

But consumer needs are not just physical and emotional. They also cover ground that is increasingly social, moral and environmental.


No man is an island – the social needs of consumers
We all feel the need to belong. Be it to a family, country or tribe. When marketers tap into this innate need, they are able to create greater affinity for their products.

The Harley Owners Group (H.O.G) – if everyone could join it, they would
Harley-Davidson is not a motorcycle – it’s a way of life. The company’s focus on the social needs of its customers is one of the reasons why this is the case.

H.O.G. or Harley Owners Group was introduced in the nineties with a simple purpose – ‘to bring Harley owners together – to ride and have fun.’

The more than one million H.O.G members spread across 1200 H.O.G chapters across the world meet monthly and organise events that include dinner rides, parades, toy runs, parties and social get-togethers.

A key objective of Harley’s relationship management strategy is to bring members together to create a sense of kinship and community. It is this kinship and community that has contributed to the fervent loyalty its customers have to their brand.

We all want to sleep at night – the moral and ethical needs of consumers
In the past, we cared less about where and how products were made and profits distributed.

Not any more.

Now, increasingly, we want to know that the money we spend on coffee is reaching the guy who grows it. That the pair of sneakers we wear weren’t made by children the age of our own. And that the money we spend on goods and services funds more than just the lifestyles of an astute few in business.

Project Red – all things being equal they are not
Of 33 million people living with HIV/AIDS across the world, 22 million (or 69%) are from Africa. Worse, the number is growing at the rate of a thousand new infections every day.

Enter Project Red – an initiative of rock-star Bono and social activist Bobby Shriver. The aim of Project Red is very simple – use consumers and the power of choice they wield to make change in the places that need it most.

Brands that sign on to Project Red pledge to donate up to 50% of their profits to AIDS-related projects in Africa; brands that have signed on include American Express (the Red Card), Apple, Motorola, Armani Exchange and Dell.

Think about two credit card mailings you receive. One offers you the chance to win a million rewards points. The other offers you the opportunity to help people afflicted by one of the most terrible diseases of our time.

Which card would you choose?

Again, understanding how customers’ needs are starting to go beyond themselves can help an organisation develop relationship management strategy that is less transactional and more transformational in terms of impact on its business.

What good is progress if we will ultimately have no place to enjoy it?
The environmental needs of consumers
In 2007, the Stern Report and Al Gore’s inconvenient truths made ordinary people – and Governments across the world – sit up and take a closer look at damage being caused to the environment.

The result has been a level of awareness and concern that corporations can no longer ignore. A few have responded positively – strengthening existing customer relationships - and building new ones.

Off to a flying start – the Qantas ‘fly carbon neutral’ programme.
In September this year, Qantas launched a unique new programme that positions it as one of the most progressive airlines in the world.

The programme sees Qantas make serious investments in its business to reduce carbon emissions. It also allows its customers to make a contribution to offset their individual share of emissions. The contribution is as low as $8.40 for a flight from Sydney to Singapore which goes towards carbon abatement projects in Australia.

In 2006/7, Qantas claims to have saved 280,000 tonnes of carbon dioxide emissions through its programme; the target is 870,000 tonnes annually by 2011. To further demonstrate its commitment, the airline earmarked September 19 (2007) as ‘world carbon neutral day’ – funding the carbon emissions of all passengers on all its flights across the world.

Qantas is an airline in touch with reality - and good customer relationship management strategy. Its investment in the programme is likely to be modest compared to the brand and customer equity it is likely to generate for itself through its operations across the world.

Relationship marketing is moving on
You can’t build relationships any more by focusing solely on the functional and emotional needs of your customers. You can’t rely only on loyalty programmes, contact programmes, freebies, offers, price offs, and other exclusive service privileges. To build strong and enduring relationships, organisations need to go beyond the strategies of the past - understand the changing mental and social mindsets of consumers, and tailor their approach accordingly.

Marketing in a Recession

Singapore is in a recession, as are most of the top twenty developed nations of the world. In most organisations, the reaction is predictable. Cut marketing budgets - every one else is. Yet, doing so could be one of the most myopic decisions a business could make.

Why?

When a market is down, prices are too
Marketing any product or service involves a cost. When times are good and economies are booming, this cost is higher than normal. The reason is simple. There are a far greater number of firms competing for the attention of the customer. For a marketer to stand out - or simply be heard - they must put a lot more weight behind their media spend.

In a market that's down, however, many competitors withdraw completely from the market or significantly lower their media spend. This presents the astute marketer with a priceless opportunity to buy media impact at a fraction of what it would normally cost.

Let's illustrate the point with a simple mathematical example.

Let's assume the the total media spend in the banking industry in Singapore in 2008 was 50 million dollars. Bank A's budget was 10 million dollars. What this means is that its category share of voice is 20%.

Let's assume in 2009, all the major banks cut their media spend which drops the total category spend to 40 million dollars. If Bank A maintains its budget of 10 million dollars, its share of voice has increased. It has moved from 20% to 25% - without any additional expense or outlay of funds.

In this situation, the marketer has gained at least in media terms.

The next question though is how to use these gains for strategic impact and advantage
Sure you have an opportunity to buy media (or more specifically the opportunity to be heard) at a lower price. But the real question is what are you going to do with your buy, what are you going to invest it in?

The choices are many. You could use your low cost media space for promotional purposes - to try and sell more products during the recession and stimulate short term demand - or you could use it to build your brand and create equity for the long term.

Many marketers will go for the short term solution and try and stimulate sales demand during the recession itself through incentives and price-off's. Changing market sentiment is difficult enough for Governments though, leave alone a single brand. In all likelihood - you will find it proves an uphill task depending on the product category that you're in.

Then more appropriate solution in my view is to focus on the long term and use your media investment to build your brand. To take the time to understand what it means (if you haven't done that already), what makes it unique, different and compelling to your audience and then convey this difference to them in the most impactful manner possible.

What this approach will do is prepare you and your brand for success when the market turns. When the ice of the recession shows its first signs of retreat giving way to the first buds of recovery and growth.

If you have used the recession to build your brand, then you will have gained during this period of uncharateristically low marketing activity a strong lead over your competitors in terms of your brand's awareness, knowledge and preference - factors that ultimately lead to higher sales, growth and profit.

Recession. Crisis or opportunity?
The recession is here. And it's both a crisis and opportunity. The question is how you are going to use it to build your brand's future benefit, advantage and success.