When consumers are frightened, they save more. The wild oscillations in the financial media between forecasting recovery and doom has left the Personal Savings Rate published by the Bureau of Economic Statistics hovering over 5% since the onset of the financial crisis that began in 2008.
High unemployment and other factors have also changed the requirements of communications. But just because there’s been an economic slowdown doesn’t mean that the “economy” has halted. People are always working and trading, everywhere and under all circumstances. Different times require different products and forms of communication.
When times are frothy and people are taking on more credit, their time frames are short. They want products that will give them pleasure in the moment. Because the purchase is financed by credit, they’re expressing that their time preference is short.
When the same people buy products from savings, they’re expressing a longer time preference.
Here are several points to emphasize about your products to people with a longer time horizon:
If they’re buying clothing, they want durable material that will remain fashionable for a long time. Momentary fashion trends are less important than comfort and fabric quality.
Instead of paying upfront for an expensive software licenses, businesses and consumers are more likely to pay a lower subscription for software as a service, and enjoy periodic upgrades.
Rather than spending $25 on a movie and popcorn for fleeting entertainment, people are more likely to spend that $25 on Farmville goods that they can show off to their friends for weeks or months. The intangible game supplies become property and thus bring more social value.
Focus on the Long Term
Instead of taking out a no-down payment adjustable-rate mortgage, more people are choosing to take out 20% mortgages with shorter loan periods. New credit card regulations restrict companies from offering too many low-rate introductory periods. Due to stagnant or declining housing prices, few banks offer loans on home equity in great numbers anymore.
This may seem like a dry topic, but these financial forces all have massive effects on the time preferences of consumers.
In a down economy, your marketing should reflect the longterm value proposition you offer to your prospects. Don’t quite have one? Fix that. If your customers are thinking for the future, you have to stay with them for the long term. It’s not about just making the initial sale and moving on to the new customer. It’s about nurturing the ones that you have and growing organically.
[Photo Credit: zappowbang]