Posted by Ajay Kelkar on Sun, May 31, 2009
For Marketer’s any change in customer behaviour is a “gold mine”. Marketing
to customer’s whose behaviour is changing is far more rewarding than marketing
to “static” customers! But sometimes there is "too much change" and in today's market that is exactly what is happening. Marketer's need ,what we at Cequity, call a Modelling factory approach-How to build models at speed!
Gallup
chief economist Dennis Jacobe concurs that "a fundamental change is taking
place" in the behavior of U.S. consumers, even if it's not clear how
permanent it will be.There is, of course, the irony that as consumers do the
right thing for themselves by saving more, they hurt the economy's chances of
revival by spending less, the "paradox of thrift" as put forth by
John Maynard Keynes.
Consumer
behaviour and Analytics practises are definitely out of date in today's era of large changes in customer behaviour. Radical changes in
patterns of consumption are here to stay. Even a reduction of the Bank
rate to 0% is not going to impact consumption. The economy needs a much
bigger shift to ignite the circular flow of income from customers to suppliers
of services and goods.For example, a scoring model might lose its predictive
power during a recession if the characteristics entered into the model or the
underlying customer population are sensitive to the economic cycle. As a consequence,
tomorrow's business decisions are driven by models that meticulously
encapsulate yesterday's reality.
BIG research's
Consumer Intentions & Actions Survey monitors shopper behaviour and has
this interesting insight!Shoppers are increasingly rethinking some of their
purchases before they head to check-out counters…close to three in five
(58.1%) say they’re focused on needs over wants, up from last month (57.6%) as
well as last year (51.0%).
While
it’s obvious that consumers have put the pinch on spending during this
recession, can we expect long-term changes to shoppers’ spending habits?
90.7% of consumers say yes…overall, it appears consumers will simply be more
thoughtful when spending over the next five years, with the majority saying
they will consider each purchase more carefully (55.2%) and/or become more
price conscious (50.7%) when buying food or clothing. Additional plans
include sticking to a budget (48.1%), dining out less (46.3%), and vowing not
to incur a large credit card debt (43.4%)
In the past maybe companies could get by without building analytical capability. But in today's hyper changing market scenario companies need to invest in bringing about a data based marketing culture-without which their ability to respond to quick changes in customer behaviour will be limited!
Read more about how the impact of a recession could have a long term effect on spending patterns of the Boomers segment!
http://www.adweek.com/aw/content_display/news/client/e3ice058ab1756ad165d5af782db9c6a648?pn=1