Think back four years.
Your boss, your client or your agency was on the “Value” bandwagon, or asking you to climb aboard. Typical trade press headline: “How Your Value Message Can Be Heard Above the Din”.
Well, get ready, because inflation is coming back, and value messages won’t be far behind.
U.S. Inflation: Delayed, Not Denied
This occurred to me while reading an insightful economic analysis explaining how easy money policies at central banks will eventually lead to 2% inflation in 2014 and 3% in 2015. True, those are single-digit numbers but they will make a difference to consumers struggling with reduced take-home pay and rising transportation and housing costs.
Put differently: Your $5 air freshener is going to be a much tougher sell.
What is Value?
Too many marketers think Value = Price. In QSR, for example, most “value” campaigns are about 59-, 69- and 99-cent items. In reality, Value = Price + Benefit. What do I get for what I paid? That equation is in consumers’ minds no matter what the economy. (Here are a couple of smart posts on this topic from Bob Gilbreath.) Our job as marketers is to figure out how we make that $5 air freshener worth it to the consumer.
Your task gets even tougher when prices in general are rising, even if you offer a discount, which is why we should worry about 3% inflation.
Dust off those recommendations from 2009
Rather than just cut prices, which admittedly may be a part of your strategy, think longer term. The trick is not just to survive tough times, but position your business for better times. If your competition isn’t ready when consumers start pulling back, you can aggressively steal market share, making you stronger when the economy improves.
|Now THAT'S added value!|
For example, if you have been looking for a way to claim ownership in the consumer’s mind of a particular category benefit, this is the time to seek it, when your competitor is more worried about short-term survival. Perhaps it’s time to introduce a new benefit – that is, improve value by offering something new or something more at the same price.
Back in 2009, Hyundai made a brilliant offer: Buy a Hyundai, and simply return it if you lose your job. That wasn’t just “value”; they were telling consumers that they understood how uncertain things were, and made a bet that built longer-term brand equity. (Unfortunately, they blew a lot of brand equity this year via a U.K. ad depicting a failed suicide attempt.)
Think ahead to 2015
The point is, think about the long-term opportunities in a short-term crisis. And start thinking about them now, before the crisis hits.