Dr. Tom McDonald, a Ph.D. in psychology, speaks on “People Skills” needed for “Business Results.” Reach him in San Diego, CA, at (858) 523-0883, tom@drtommcdonald.com, or visit www.drtommcdonald.com.

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T R E N D S

The changing face of the U.S. consumer 

Marketers are facing a new reality. The face of the American consumer is changing dramatically, according to a new analysis of U.S. Census data. Here are some of the most prominent trends along with ideas for reaching these changing consumers:

1. Generation AARP: The average age for a U.S. head of household is now 49.5 — just six months shy of getting a sign-up pitch from AARP. The first boomers will turn 65 in less than three years. More than 80% of the growth in the number of new households in the next five years will be among those headed by people 55 and older. And they are big spenders — the Bureau of Labor Statistics reports that households led by people 55 to 64 increased their total spending at almost twice the rate of all other households (60% vs. 32%) in the past five years.

Older consumers tend to be more risk-averse and less open to new ideas. To reach them, don’t pander (“60 is the new 40”). Play up messages suggesting advantages such as guarantees, safety and experience.

2. Consumer chasm: The gulf is widening among consumers when it comes to attitudes and behavior. The online- and wireless-centric consumer lives in a different world from the older newspaper reader. The college-educated consumer with a white-collar job in a wired office has less in common and much less interaction with the high-school-educated blue-collar worker than in the past. Consumers’ product preferences can vary as much as their political and social views. Rethink strategies for target marketing. Put more emphasis on ethnographic research into the cultures, beliefs and activities of target consumer groups.

3. Regional disconnect: One nation, but hardly united or homogeneous. The Northeast is older, largely white with fewer children; the West is younger and more diverse. Two-thirds of recent immigrants have settled in the South or West. For products aimed at older consumers, consider looking north and east. If you want younger consumers, pick your regions and then make sure the message resonates with a multicultural audience.

4. Growing ethnic diversity of youth: The median age of U.S. Hispanic women is about 28 — 14 years younger than the median age for white, non-Hispanic women. Two in five consumers under 45 are Hispanic, Black or Asian (vs. one in five for 65-plus). More than half of household heads in California and Texas are Hispanic, Black, Asian or multiracial. If you want to be the choice of a new generation, embrace the cultures and voices of that generation.

5. Immigration imperative: In the past seven years, 40% of U.S. population growth has come from immigration. States such as New York, New Jersey, Michigan, Illinois and Connecticut would have seen their work forces and populations shrink were it not for new immigrants. Immigrants are a prime source of new consumers, so it pays to learn more about their needs as consumers. 

Source: Advertising Age, July 7, 2008  

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N E W S

Categories help us make happier choices 

Most of us have stood in a supermarket aisle, overwhelmed with the array of choices. Making those choices is easier if the options are categorized, according to new research conducted by Cassie Mogilner (Stanford University), Tamar Rudnick and Sheena S. Iyengar (both of Columbia University).

The study demonstrates a surprising phenomenon called the “mere categorization effect,” where consumers are happier with their choices if their options are categorized, even if the categories are meaningless.

In one study, participants chose magazines from different displays, some that were categorized and some that were not. Those who were asked to choose a magazine they weren’t familiar with tended to be more satisfied with their choices if they came from categorized selections.

In another study, people at a food court were randomly selected to choose coffee from several menus. The coffee options were either categorized or uncategorized. “Consumers who chose a coffee flavor from a menu divided into seemingly meaningless categories such as categories A, B and C were just as happy as those who chose from meaningful categories such as ‘Mild,’ ‘Dark Roast’ and ‘Nutty,’” write the authors.

“Although it is assumed the size of a selection is more important to the consumer than the number of categories, the findings of this investigation reveal the opposite to be true,” write the authors. “Categorization can benefit retailers by providing them with an alternative to stocking additional volumes of goods.”  

Source: Journal of Consumer Research, August 2008

Help employees give away bonuses 

When companies hand out bonuses, one intention is to make the rewarded workers happy. But new research at Harvard Business School shows that how employees spend bonus money is what really affects their happiness.

Researchers discovered that people get no meaningful boost in happiness by spending money on things like new clothes, TVs and iPods. They do tend to feel better, however, if they spend even a small portion of a windfall on others for gifts or charitable donations. But other aspects of the research show that most people are unaware of the benefits of “prosocial spending” and believe that spending on themselves is the path to happiness.

Managers should consider providing employees with opportunities to help others with their bonus dollars. Companies might also want to think about forgoing their large donations to charities in favor of divvying up the money among employees and allowing them to choose where to donate it.  

Source: Harvard Business Review, July-August 2008

Online strategy a must for offline retailers 

The Internet’s role is becoming integral for brick-and-mortar retailers, even for in-store purchases, according to a recent Nielsen Online survey. The survey found that of those who recently made consumer electronics purchases in a store, 80% visited the store’s website first. Moreover, 53% purchased from the retailer on whose website they had spent the most time, Nielsen said.

Among consumer electronics purchasers, 58% indicated that if they had only one channel in which to do product research prior to purchase, they would choose the Internet, compared with only 25% that would choose to be able to do research in a physical store.

Even in product categories that involve less research before purchase, the Web plays an important part in the information-gathering process. For example, some 44% of pet food consumers went online to learn more about the product.  

Source: MarketingVox.com, July 23, 2008

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T I P S

• Minutes count when responding to a lead from your website? According to a recent study by MIT and Insidesales.com, a salesperson is 100 times more likely to reach a prospect immediately after getting an online lead compared to waiting just 30 minutes later. Companies with long lead times may not see the need for urgency in calling back prospects who won’t buy for months. However, the study also found that, regardless of lead times, swift handling vastly improves the odds of making a sale. What’s more, managers who know how quickly their leads are handled get far better results than those who don’t.

Source: The Marketing Report, 370 Technology Drive, Malvern, PA 19355

• The Avis tagline “We Try Harder” might be more than just a clever advertising slogan. Research at the University of Southern California has proven that customers favor companies that are seen to go the extra mile — even if they don’t personally benefit from that effort. In fact, customers are willing to pay more for a product, frequent one store rather than another and, in general, have a more positive impression of a company that is perceived to go the extra mile.

Source: www.marketingprofs.com

• Now may be a good time to shop around for telecom services. Phone and cable firms are duking it out for small business customers as markets for big businesses and consumers mature. Deals for small firms will mix desk phone, Internet and mobile phone coverage with tools such as email, Web hosting, document collaboration and more. They’ll increase Internet speeds to the standards of bigger firms — up to 30 times the rate of traditional T-1 lines — at a lower cost per month.

Source: www.kiplinger.com

• The slumping economy may cause employees to request raises. But what if you can’t afford it? Just saying “no” is unwise if you want to hold on to employees. By being creative, you can give employees something of value, even if it’s not a bigger paycheck. Try saying “You deserve a raise, but I just can’t do it right now. Tell me what else would work. What would make things better for you?” Then brainstorm for several perks or benefits that would make the employee feel better, such as a company cell phone, extra vacation days, a later arrival or early departure on Fridays.

Source: www.USAToday.com

• Optimizing your website to attract local searchers really isn’t that hard to do. First, use the names of cities and suburbs on your pages and add your address. Offer fresh content by talking about local and community events in your blog posts and titles. Link out to local sites using town and neighborhood names in the anchor text. Next, try to get incoming links from local business directories, local school alumni directories, local strategic partners and your blog network. Finally, use local words in your title tags of pages, anchor text for internal and external links, H1 tags, bold and italics tags, URLs of page names, and alt and title description of images. Make sure anything you do that highlights content makes sense to eyeballs as well. Don’t overuse this technique — use it just enough to help point to your site.

Source: www.ducttapemarketing.com

• When checking references on potential employees, are your standard questions resulting in less-than-illuminating answers? Sometimes unexpected questions can produce surprising insights. Try these questions and see what kind of answers you get: Were you asked to be a reference by (candidate name)? What did he learn during his time with your company? If you could give him a single career suggestion, what would it be? How did the candidate respond to your management style? Would you rehire him?

• A powerful sales technique is to mimic your prospect’s mannerisms. How powerful? A study in France explored the effect of mimicry between buyers and sellers. Based on student role-playing experiments, 67% of sellers who mimicked their target secured a sale, as opposed to 12.5% of those who did not. Another study at Duke University asked students to discuss a new soft drink with sales reps. The reps that were instructed to mimic the physical and verbal behavior of the students they spoke to elicited more positive ratings of the drink, and volunteers they mimicked consumed more of it during the chat. But be warned, overt mimicry can backfire if detected. Be subtle, leave a delay (about 2 to 4 seconds) and stop if you think you’ve been discovered.

• If you eat a frog first thing in the morning, the rest of your day will be easy. This adage urges us to complete our most important project or activity at the start of each day. Pick the project that will yield the most benefit in reaching your goals or is the item on which you keep procrastinating.

Source: www.productivitytoday.com

• Boost word-of-mouth marketing with these low-cost ideas: 1) If your product or service is a one-time or infrequent purchase, consider creating an alumni club. Reward past customers with a gift card when they send you a new client, and reward the new client with a gift, too. 2) Give customers a referral form when they leave your office. The time to tap into a customer’s personal network is immediately after you’ve solved their problem. 3) Give referrals to prospects who turn you down. Lawyers, accountants, insurance agents and others sometimes meet with a prospect and the chemistry just isn’t right. The smart thing to do is to refer that prospect to a competitor, who may return the favor later.