There is hope and lots of opportunity, even during a recession; you just have to know where to look for it.

Recessions have a strange habit of changing rational behavior into frenzies of desperation. While markets adjust, the fundamental tools of economics “supply and demand” remain busy making amends for prior excess and greed. Many marketers have never been exposed to a market that does not conform to conventional wisdom. Now they have to re-adapt in order to succeed.

The recent hike in oil prices is a clear demonstration of the effects of market manipulation. As oil prices dropped OPEC reduced production in the hope of increasing prices. However the market did the complete opposite and prices fell further, contrary to OPEC’s intent. 

 

The point I am making is that customers are like markets; they cannot be controlled or manipulated over a sustainable period.  The panic and fear that the current recession is producing is ravishing the reasoning faculty of many brands marketers. Why you might ask? Because many of them believe slashing prices in order to maintain share is the best strategy in a downturn. Just as the Black Knight in Monty Python’s Holy Grail believed he was invisible, he was unrepentant even with the loss of all his limbs.

The same type of reckless behavior is also prevalent with panicked discounters slashing prices, believing that what worked in the past is sure to produce improved results in the future. If you want to see how fast the world is changing check out these stats.

Continuous discounting is not fiscally maintainable, even brands with the deepest pockets use it sparingly as a short term tactical event. So what’s the alternative, a loyalty program that has been designed to engage customers at a much lower cost when compared to discounting. Besides from choosing their individual reward (which is a key motivation factor) customers now tell most of their close network just how cool the reward program is and become WOM (word of mouth/mouse) brand advocates.

 

The rich and relevant data produced from an interactive loyalty structure contextual offers which can be specifically targeted at select customers. This strategy maximizes benefits and efficiencies for both members and the marketer. We refer to highly engaged customers as “Alpha” customers, engaged consumes as “Beta” and active customers as “Omegas”. Alpha customers spend 20 times more than a regular customers,  Beta 10 times and Omegas 5 times.

So if you are looking to increase sales in the near future, identify your most profitable customers and then maximize your share of their purse by offering meaningful rewards that build lasting relationships.

What is Schadenfreude? Perhaps the greatest word in any language, Schadenfreude has become the defining emotion of the 20th Century. From the German, Schaden (damage), and Freude (joy), it means the enjoyment obtained from the troubles of others. It is the easiest, and often the most fulfilling, enjoyment available. http://www.bbc.co.uk/dna/h2g2/A287255  It is commonly referred to as “Happiness at the misfortune of others”Here is an example of all the sexy beautiful people taking a fall.

Here is an example of all the sexy beautiful people taking a fall.

The animal kingdom is less forgiving, make a slip and your dead. The same is true in business, competitors are merciless and will devour your customer base without hesitation. The recent meltdown in the capital markets have caused many smart and often prudent investors to make rash decisions based on fear. Why is this so? Because predictability brings security, removing one’s ability (or at least the perception) to predict  future events, makes one insecure. The winners in these markets not only delight in the losses of others, but often depend on them to survive. Predictability brings security, however the only thing we can secure is our ability to control our attitude in any given situation. Everything counts, especially during challenging times. So keep your customers excited and delighted, otherwise your competitors will indulge in a schadenfreude feast at your expense.  Marketers should focus on understating the wants, desires and needs of their customers. Technology (blogs, forums and digital communities for example) has enabled two- way communication channels that create an interactive dialog between customers and brand stakeholders. However some brands are petrified about unbridled open conversation. Remember, you’re best friends tell you the truth even when its hurts, because they love you. The same is true of your best customers. Engage them and you will create a host of loyal brand evangelists. A marketers dream.