Economists are seldom right.
It is a recurring theme and reality. Put simply, economics is not an exact science.
There are too many variables for one to be definitive on any one issue or projection. Moreover, there is little scope for or recognition of the importance and nature of human perceptions and sentiments in economic equations.
For example, take the recent public statement by the Governor of the Reserve Bank of Australia, who has a doctorate in economics no less, when he pleaded with Australians to dispel their “gloom and doom” and to accept that nationally the “glass is half-full, not half-empty”.
Wrong! In reality there are two glasses. One is overflowing and the other is half-empty.
However, the physical reality of an overflowing cup is being tempered by the prevailing, pervading and apprehensive consumer sentiments. It is a classic case of the consuming public's perceptions becoming the economists' reality, if not nightmare. They just don't add up.
Long established, supposedly immutable economic principles need to be set aside. Consumers, like economists, need to be re-educated. The appropriate steps are recognised, sequential, basic and effective.
An overwhelming majority of consumers are now aware, alert, discerning and constantly exposed to multiple news sources and headlines which highlight the challenges being confronted by Greece, Spain, the Eurozone, the United States of America, as well as the Australian retail, tourism and construction sectors.
The “hard” news of the mass media, which centres on facts, statistics and other “concrete” aspects of news, holds little appeal to consumers at large. Those that do bear relevance and influence are largely negative in nature and character.
Whilst a significant percentage of people may be innumerate and financially incompetent they do tend to have an intuitive feel about things “that do not add-up”.
Therefore, consumer sentiments must necessarily be recognised, accepted and respected as a filter through which most, if not all communication is received and processed.
Countless businesses around the world are reporting marginal responses to advertising campaigns, notwithstanding unprecedented discounts and offers.
Some have questioned the creativity of the advertising messages. Others have doubted the effectiveness of the various media channels. Both are justified, but for reasons related to the use of creativity and of the respective media, rather than to those two factors in isolation.
Few, it seems, have recognised the role and importance of consumers' sentiments.
There are 3 generally widespread realities in the marketplace. The first two explain, in part, the reasons why consumer demand and reactions are so sparse. They are:
• Consumers are not listening• Consumers are not responding
Individually and collectively these two considerations define the challenge and the specifics of a brief which needs to address the need to “meet the market realities”.
Little wonder, those advertising campaigns which spruik, or better put, scream “save, save, save” or “sale, sale, sale” are ineffective.
A reorientation of focus from product, price and promotion to consumers, individuals and sentiments will generate interest, urgency and demand.
No consumer segment is immune to this spreading virus of disconnect. Most advertising is dismissed as just “noise”. A recent major study revealed that brand recall in the past 2 years has declined from 27% to 15%. Good marketing communication evokes emotional responses by projecting images or the promise of positive experience. Look no further than the communications of the brand Coca-Cola for a great example.
Case studies of consumer inertia and disinterest abound in electrical appliances, housing, real estate, financial planning and the same circumstances exist in numerous business-to-business scenarios.
A better and detailed understanding of prevailing consumer/corporate sentiments will be an effective first step in generating sales.
Repackaging the headline, the message, the offer and the very sentiment of the ‘advertising' is needed.
Significantly, for those entities which embrace these principles and address the challenges, enhanced performance standards are in the offing, regardless of overall volume of a sector or region. Redirection of existing demand is readily achievable.
FIRST THINGS FIRST
For most things in life there is a logical sequence. For marketers at present a new adage has evolved.
“Open the consumers' minds
Before you open their pockets”
This may and probably will involve the re-education, refocus, reassurance and reaffirmation. In short, the mind needs to be settled before the deal is settled.
Attention and priority needs to settle on the prospective, existing and past clients rather than the antiquated sales philosophy of the price, place and promotion.