Speaking to consumers who are keeping their cars longer

Below is a recent article from AutoPacific that discusses how Americans are keeping their cars longer than ever before. I don't think that this is a surprising fact to anyone, but how do businesses that touch the auto industry take advantage of it? Here are a few ideas:

• Sell New Cars? - You better be talking about the long life and value!
• Sell Pre-Owned Cars? - Discuss value for the money vs. new.
• Do you do repair? - We extend the life of your car, no need for a car payment when we can get it back up and running for less than you would expect!
• Sell Auto Parts? - You are golden these days! Why get a new car when you have the parts to get going again, discuss how relatively easy it is to do most of the work yourself. If you have the knowledge to give the customer advice - shout it from the mountaintops!

The consumer knows what is going on in with the economy and the auto industry these days, so speak to them about things they care about. Have fun & go make some money!

Jeff

Americans Keeping Their Cars Longer
An annual survey of new vehicle buyers shows a significant increase in the number of people planning to hold on to their cars and trucks. In 2005, just over 46 percent of new car acquirers indicated they would not be shopping for a new vehicle for four years or more; in the just completed survey that number has risen to about 59 percent -- an increase of almost 13 percent. At the same time, the number of people intending to replace their vehicle within the next two years has fallen.

In April, automotive research firm AutoPacific conducted a national Internet survey which revealed that the general public was very hesitant to invest in a new vehicle; with 72 percent of those surveyed saying it would be more than a year before they would be in the market to buy a new car.

That finding supports other surveys which indicate that the public is wary about the current condition of the American automobile industry and the U.S. economy as a whole. It also confirms that not only are consumers wary, but those that did make the investment intend to hold on to their vehicles longer.

"Rapid replacers don't seem to be changing their pattern, but people who previously bought a new car every one or two years have significantly scaled back their purchasing, and those who before bought every three to four years are now waiting at least an additional year," said George Peterson, president of Tustin, California-based AutoPacific.

"We'll not be seeing the frequent replacement pattern brought about by strong incentives and financing programs that made it easy and financially reasonable over the last decade for consumers to get into a new car frequently. This may also tell us that consumers will be putting a higher priority on vehicles with a reputation for quality and durability that meets not only their short-term needs, but also their long-term expected needs."
(Source: AutoPacific, 07/14/09)

Do you have time suck?

Twitter? Facebook? YouTube? Blogs? Streaming? Video games?

Sure, we all need to keep up on digital, but not at the expense of getting our most important daily activities done. However, rarely will you or your team make much money letting the time bandit of Twitter or other internet temptations get in the way. Know what the top 3 important activities are for your business, then reinforce those activities regularly with your staff.

The Number One Factor

Customers rely on their emotional experiences with salespeople more than any of the traditional factors, according to research by the Peppers & Rogers Group.

The research showed that:
* 60 percent of all customers stop dealing with a company because of indifference on the part of salespeople.
* 70 percent of customers leave a company because of poor service, which is usually attributed to a salesperson.
* 80 percent of defecting customers describe themselves as "satisfied" or "very satisfied" just before they leave.
* Customers who feel their salespeople are exceptional are 10 to 15 times more likely to remain loyal.

Source: Don Peppers, founding partner of the Peppers & Rogers Group (from The Selling Advantage, 07/28/09)

What Happens If You Cut Media Spending?

Predictive Modeling by ThinkVine Indicates One Brand Would Never Close Sales Gap

In the short term, marketers can get away with cutting media spending without much real harm. But that term is as short as a quarter, and the harm, once it begins, can last long after the media switch gets turned back on.

Those are recent findings of ThinkVine, a Cincinnati analytics firm that does predictive media modeling for marketers such as PepsiCo, MillerCoors and Colgate-Palmolive Co. ThinkVine CEO Damon Ragusa said lately he's been getting a lot of inquiries about the potential impact of going dark altogether for a quarter or more.

An analysis the firm did for one unnamed brand looked at the impact of turning off media entirely for a year, then turning it back on the next year at prior levels. For about 16 weeks, sales volume was about the same. By the end of year one, however, sales volume was about 20 percent lower without media than with it.

Turning media back on in year two reversed the sales decline as the brand began growing again at the same rate it would have otherwise. But it never closed the gap in sales results compared with what it would have achieved had it maintained media spending both years.

Different brands respond differently to media cuts, Mr. Ragusa said, and some brands with dominant positions or in less advertising-responsive categories may get away with cutting budgets unscathed. But for many, possibly most, getting back sales and share lost from cutting budgets can be a lengthy and expensive process.

"There is a downside risk," he said. "The cost of getting back what you lose is often greater than the savings."

A brand that is on a downward trajectory anyway because of the economy is much more at risk from a temporary withdrawal of media support than one with flat or rising sales growth, he added.

ThinkVine uses correlation and regression analysis and sales data. But it bases its predictions on the makeup of each brand's consumers, including detailed data on the media and spending habits of various consumer segments. It then crunches as many as a trillion data points for each forecast.

The results aren't perfect but tend to come within 2.4 percent of the real-world sales data in ThinkVine's validation work, Mr. Ragusa said.
(Source: Advertising Age, 06/29/09)

What Will Be Your Customer's Memory Of You?

“It [the Cheshire Cat] vanished quite slowly, beginning with the end of the tail, and ending with the grin, which remained some time after the rest of it had gone.” – Alice's Adventures in Wonderland (1865)

I never ask the graduates of Wizard Academy, "What could we have done differently? How might we improve?" To do so would be to ask them to search their memories for disappointing moments. These are not the images I want to cement in their minds.

Instead, I ask, "What was your favorite moment during your time with us?" This causes the students to recall each of the high-impact moments during of their time on campus and relive those moments in their mind. It doesn’t matter what they choose as their favorite, I just want to flood their minds with happy memories.
The grin will remain after the rest of it is gone.

It is important to control the Last Mental Image (LMI.) What procedures do you employ to make sure your customer has a positive LMI of their experience with you?

Today the world is forming its LMI of Michael Jackson. So far, the stories and comments have centered on his impact as a performer and his contributions to music. The foibles and flaws that interested us yesterday no longer seem important. Michael Jackson is dead and the world seems a tiny bit smaller.

(source: Roy H. Williams, mondaymorningmemo.com)

Millions Of TV Viewers Go Dark, Few Complain

Suppose someone pulled the plug and a couple of million people didn't care. That may be what the TV industry is discovering nearly a week after the U.S. broadcast industry converted from analog to digital broadcasting. Days after their analog TV signals went dark, 2.2% of U.S. households still haven't bothered to hook up to digital reception, according to estimates released Wednesday by Nielsen Co.

Even more troubling, the estimates are based on households in Nielsen's national and local TV ratings panels, which means that more than 2% of Nielsen's panel is reporting zero TV usage in the days following the conversion.

The broadcast industry had expected that the vast majority of analog hold-outs would scramble to convert to digital at the 11th hour, or after their TV sets went dark, but that does not appear to be the case, as a survey of the nation's TV stations by the National Association of Broadcasters reports only "moderate" call volume from viewers to local stations seeking help of information about receiving their digital broadcast signals.

"The call volume is considerably low given that the transition impacts an estimated 14 million over-the-air households in markets with at least one station going all-digital," the NAB said in late Friday, the day analog broadcast signals ceased to transmit.

Moreover, most of the calls received by local broadcasters were among those that had already prepared for the digital transition, but simply needed assistance in scanning digital channels with their new equipment.

"A relatively small percentage of viewers so far have needed assistance given the large number of broadcast-only households affected during the today's transition," noted Jonathan Collegio, vice president for digital television at NAB. "Importantly, much of the assistance sought by viewers has been on the relatively minor issue of scanning and re-scanning converter boxes and digital TV sets."

The NAB has not released new data on the number of households that have gone dark, but the new Nielsen data suggests millions of TV viewers either don't care, or are still perplexed about how to hook up to digital broadcast despite billions of dollars invested by the broadcast TV industry and the U.S. government to help educate them.
(source: Mediapost.com, Joe Mandese)

Establish Permanence In Changing Times

During the Great Depression, an entire entertainment genre was created by a forward-thinking advertising team. While no obvious one-stop solution exists for the current recession, marketers do have an opportunity to successfully tap into the zeitgeist.

Gone are the days of flash, glitz and punching monkeys. Consumers today value sustainability, social responsibility and fiscal prudence. If marketers can align with consumers, they can come out of the recession with a more loyal audience than they went in with.

Permanence Establishing a sense of permanence is particularly important during economic downturns. It's not a time a brand can afford to pull back on its marketing efforts, or they will lose the potential to endear valuable customers. Proctor & Gamble wrote the script during the Great Depression. P&G had a strong marketing philosophy: don't cut advertising budgets during recessions.

While many were cutting back on advertising during the Depression, P&G reinvented the wheel with its first soap story -- "Oxydol's Own Ma Perkins" radio show" -- which launched in 1933. It proved so successful that P&G doubled its marketing budget and launched 21 serial radio dramas by 1939, thus creating an entertainment institution: the Soap Opera.

Not only did P&G remain relevant during these times, but it remained a constant in consumers' lives by connecting in a unique way. It successfully engaged its core audience, allowing P&G to come out of the Depression stronger than it had started.

Responsibility
What message can build brand equity during this economic downturn? Economic, social, and particularly environmental responsibility. There is a call-to-action for brands to lead the charge in finding solutions for climate change. Consumers need to know their brands are working towards a common goal.

It's not an easy time for a brand; consumers are more educated and more demanding than ever. They stand behind brands that make them feel conscious and informed. A recent Havas Media study by IPSOS found that 79% of consumers said they would rather buy from companies doing their best to reduce their impact on the environment.

And 89% are likely to buy more "green" goods in the next 12 months, with a third willing to pay a premium for those goods. While it's not an easy time, the returns are high. A bond driving a customer to pay a premium for a similar good during an economic crisis is a bond worth establishing.

Resorting to sustainable claims isn't enough for a brand on its own. The Millennium Generation is particularly vigilant about weak or unfounded responsibility and sustainability claims. A Hartman study found that "consumers are thinking much more broadly than marketers about what words like 'organic', 'green' and 'sustainable' mean. They use more positive words to describe these products, like hope, connection, simple living, authenticity, and control."

The first step in establishing this "connection" and "hope" is to create an authentic story. And if you don't have a sustainable message to tell today, start establishing trust through other channels while working towards sustainability. Take MARS for example. As one of the world's largest cocoa purchasers, it is making great strides to support sustainable rainforests. But even before they had the opportunity to speak to this story, MARS had established consumer trust with transparency and a commitment to their five sustainable principals: Quality, Responsibility, Mutuality, Efficiency and Freedom.

Context
With ad budgets tighter, how can marketers efficiently and effectively tell their sustainable story? First, don't waste dollars on deaf ears. Identify engaged and influential audiences and tell your story in credible environments. Reaching fewer passionate consumers will go further than blanketing your message across a larger, less engaged audience.

If these change agents believe in your message, they'll do the heavy lifting for you and stretch your marketing dollars. In addition, identify contextually relevant advertising opportunities and media outlets with a similar ideology to your message. You'll find the setting in which the story is told can be as important as the story itself: The medium is the message.

Modern Day Soaps
We are starting to see some great soap opera stories unfold today, from large CPG companies to small start-ups. Jeremy Moon, founder of Icebreaker, offers outdoor clothing created from sustainable materials. Moon faced a significant challenge: He needed to charge consumers a premium price for a premium fabric.

By creatively giving transparency to the source of the material -- you can see pictures of the sheep that grew your merino wool sweater and email the farmer -- Moon's message resonates with change agents. These influencers quickly turned Icebreaker from an unknown shop to the largest outdoor clothing brand in Australasia.

It's not just niche brands that are able to capitalize on sustainability and change. Even behemoths like Wal-Mart are finding sustainable stories of their own and bringing them to life through advertising. Wal-Mart recently announced an initiative to cut its supply chain's packaging by 5%.

This opens up Wal-Mart's doors to a new and influential type of consumer. What they care about is that Wal-Mart is saving millions of pounds of garbage from landfills and taking the equivalent of 213,000 trucks off the road every year. The fact that Wal-Mart stands to directly save $3.4 billion doesn't hurt its bottom line either.

In this economy consumers are feeling vulnerable. Now, more than ever, people want to feel a part of a responsible and sustainable culture, and they are spending their dollars accordingly. Go tell your story. People are listening.
Source (mediapost Colton Dirksen Wednesday, June 17, 2009)