Brand Relevancy in the Age of Frugality by Greg Sieck

Change makes things different. And if you don't think things are changing for consumers in America and all around the world, lift your nose out of your sales data for a second, and take a whiff. At first it smells like fear, "What happened to my 401k, 529, home, job?" But there's an underlying smell, and it's one of practicality, frugality and the will to survive.

American consumers have been hit with an unprecedented quadruple whammy of factors – the dive in home prices, tumbling stock values, soaring energy and food costs, the credit crunch – which is changing the way consumers think... and behave. Given the reduction in the value of retirement accounts and the inability of homes to provide a windfall for the future, many Americans have set their minds to a commitment to work until their 70s... there's just no other way to catch up.

Five Rules for Brands in the Age of Frugality

1) Believe in your brand: Whether your brand has been in the market for years, or is relatively new, you have equity with your customers. If you lose faith and break with your brand values now, you'll need to give your customers another, more compelling reason to stay with you. Building new products and offers, fresh messages and innovative promotions that leverage the promises you have made to your customers in the past will bear fruit, even in these tough times.

2) Know your customers and speak to them: In this new Age of Frugality, old values are coming to fore. What's important: Health? Security? Education? Family? These values will drive your customers' decision-making. Make sure your salesforce, retail salespeople and customer service personnel have the training they need to empathize with your customers. Help them consider alternatives, including doing nothing. Help them evaluate the purchase by touting benefits, both rational and emotional.

3) Try something new: Speak to a new customer segment, use a new media or promotion vehicle, develop new packaging, launch a new distribution channel, or make an acquisition that helps your growth. Even though money is tight, doing new things is less expensive as the entire marketing eco-system looks for ways to survive.

4) Focus on value, not simply price: Lowering price to attract new customers is a viable strategy. But if it is the only way you can compete, you are committing to being the low-priced brand in your category. Your brand has value (see rule #1), therefore you must exploit that value to be more competitive and make sales without giving away all your margin. If you understand your category and your competition, you can find ways to create value... without being on sale every day.

5) Have a strategy for permanent frugality: There is no reason to believe that this is going to be a one-year-and-out downturn with consumers returning to their free-spending ways. The net worth of Americans has been dramatically reduced and it will take many years for your customers (and you) to rebuild financial well-being. In many cases, whole new thrift behaviors are being learned, which will preclude a rapid rebound of consumer spending. Put long-term brand strategies in place now that comprehend a frugal consumer for years to come.

Change is Good (for Brand Relevancy) In understanding how to keep your brand relevant in the Age of Frugality, perhaps the most important thing to come to grips with is that we are experiencing a fundamental, permanent shift in values and buying behavior. It is a change that will be good for your customers, the country and the global economy. To be successful, your brand must take in account the challenges your customers face and become empathetic with their emerging values.

Now, building brand value is wholly dependent upon understanding how your customers values have evolved. Getting it right is essential for both short-term survival and long-term growth.

This article has been provided by Greg Sieck and reprinted with permission from Sieck Growth. For more information, please visit http://www.sieckgrowth.com. Read the full article at http://www.sieckgrowth.com/SieckGrowth_Frugality.pdf