Saturday, February 07, 2009

Segmentation fit for the recession

It was the best of days it was the worst of days for it to be National Stress Down Day. The day when the Samaritans try to raise money to continue its excellent work.

Yesterday the UK froze. There was traffic chaos and what started the week as beautiful landscapes and a cheap way of practising your skiing techniques ended in being a pain in the rump.

National Stress Down Day also marked the news of a massive jump in the insolvency rate of UK companies and new forecasts of record falls in economic growth.

How the hell is Jo Public reacting to the wrath of the financial and meteorological gods?

One of the good things about yesterday was an article in the FT by John Quelch and Katherine Jocz (Keeping a keen eye on consumer behaviour) about the importance of understanding how customers are reacting to the new reality and how their attitudes and behaviours are changing.

It is the first bit of thinking I have seen about the permanent effects of the recession on the consumer psyche. I am sure it will not be the last.

This is a statement worth remembering.
What is certain is that the market segmentation scheme you were using to plan your marketing budget and programmes this time last year is obsolete. You need to listen to your customers and possibly develop a new segmentation approach.
The writers propose six recession segments that are definitely worth considering. Of course they are stereotypes but they are a starting point for you to think about your own customers.

Naysayers are frightened consumers who have stopped buying any discretionary purchases and are trimming their daily purchases.

Short termers are younger, urban consumers with few savings who have, therefore, lost little in the financial meltdown

Long termers are consumers who see the reduction in their retirement accounts as an unfortunate bump in the road. They are worried but not panicked.

Simplifiers are baby boomers who have lost a significant percentage of their savings, and, as a result, have become more risk averse and are reassessing their values. Some will conclude that they must postpone retirement to recover their net worth. Others will decide that they can make do with less, reduce their consumption and simplify their lives.

Sympathisers are savvy consumers who switched into cash ahead of the crash but who know others who did not. They could afford to buy a new car but they do not want to appear ostentatious. They are continuing to spend at near-normal levels but more discreetly.

Permabulls are relentlessly optimistic. Their “here today, gone tomorrow” attitude has them looking for opportunities to make up for lost ground and find the next million dollar idea or stock pick

Which one of these are you? How do you reckon you customers map onto these groupings? If you are marketing to the 50-plus you will find lots of them in the Long termers and Simplifiers categories. Dick Stroud

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