Splitting The Difference: Consumer Confidence

If you are looking for evidence that demonstrates what people think and what people do are two different things, December's Consumer Reports Index tells the tale. Consumer confidence remains extremely low and confidence in job market shaky. Yet, the holiday spending index last month was up 13.9 from 12.4 a year ago, with December looking better than last year.

According to Ed Farrell, director of the Consumer Reports Sentiment Index, consumers are shopping because they are tired of demonstrating restraint year after year. So even if their economic outlook remains unchanged, they are spending more in a stable but negative economy.

The mixed bag of data from the Consumer Reports Sentiment Index. 

What's most interesting about the economic climate and consumer sentiment is how fractured the nation seems to be. Different income groups, different age groups, and different regions are experiencing different economic realities and expressing different consumer sentiment.

For example, people have reported more job losses than job gains in the first time in four months, with the Northeast hardest hit. People living in the West are experiencing the most economic stress, due to the economic uncertainty of jobs and the economy. Consumer confidence among people, ages 18-34 and 65+, has remained unchanged or lost ground (career starters and fixed incomes).

People with a current household income over $100,000 have slightly higher consumer confidence whereas people with a household income under $50,000 have slightly less consumer confidence. But it's middle income families that are under the most economic stress.

The report shows that people are most concerned with medical bills and medications, missing payments on major bills, and health care coverage reductions. Whereas the higher household incomes are seeing more stability, middle income families are barely making ends meet. For households under $50,000, 20 percent could not afford medical treatment or medications, 13.5 percent missed a major bill payment (but not a mortgage), and 12.5 percent lost or reduced their health care coverage in the last 30 days.

Irregular economic climates drag consumer confidence down.

One of the reasons national leaders are struggling in developing a solution is because the current economic climate is not allowing for a one-size fix all for the nation. Specifically, some areas of the country believe taxation is the only way out of the current crisis because they need relief while those in less depressed areas know increased tax burdens may erode their marginal economic foothold.

But avoiding the politicized nature of the economic climate, let's consider what this means for marketers. The three key areas where some companies are winning is by focusing on location, confidence, and relevance.

Location, because some regions of the country are outperforming others. Confidence, because some consumers, even in depressed areas, are making purchases. And relevance, because consumers will purchase meaningful products regardless of their financial situation.

While holiday spending has increased, personal electronics is the only segment of the economy that has successfully demonstrated it can deliver meaningful products. In fact, the increases in spending this year are largely tied to personal electronics, which is up 31.4 percent (up 21.2 percent from last month).

According to the Daily Finance, six of the top ten product purchases are related to electronics. Only Pillow Pets, Australian short boots (that cross a boot with a moccasin look), a Fisher Price dancing Mickey Mouse and indoor remote controlled helicopters can compete (you might notice the latter two rely on electronics).

In fact, even Toys "R" Us reported that the LeapPad Explorer is the most sought-after purchase for young children. It makes sense. The LeapPad Explorer is like a tablet for kids, with an education-entertainment bent.

The long and short of it in making marketing decisions into 2012. 

Unless Farrell's one cautionary concern is right — that strong holiday sales could set the economy up for a weak first quarter — marketers have to do a better a job focusing on proximity (financially stable areas), demographics (select incomes), and psychographics (specific interests and positive outlooks). That means segmenting markets, targeting people who can actually buy the product (instead of blasting everyone), and making meaningful connections to the product or service offering.

Those are the questions to ask. Are you in the right markets? Are you reaching the right people? And are you demonstrating that your product can add tangible value beyond status? Because if anything has changed, status products just don't cut it anymore.

Reconditioning Engagement: Not What You Think

During my class last weekend, I said it plainly enough. If you want to create a true online community, you need to look beyond "being on" a social network. You or your organization need to build one.

It doesn't have to be the next Facebook. It might even be tied to the functionality of your site, with differing degrees of community, as not all communities are created equal. And that's all right. Not everyone needs a strong community. Weak communities can produce equally powerful outcomes.

An oversimplified observation between strong and weak communities. 

BlogCatalog, for example, has a reasonably strong community. It used to be more robust than it is today, but there is no mistaking it as anything less than a community. People identify with it, invest time in it, connect with other members, develop friendships, and sometimes take action on its behalf. There are others too. As clunky as it can be, Ragan has built a community. So has Recruiting Blogs.

Kickstarter, on the other hand, has a weak community. It's one of my favorite sites, but the structure of the site doesn't necessarily create relationships between members as much as it creates them between backers and creators. People do identify with it and invest time, but connecting with other members is relatively rare and members take action on behalf of the creators more than the site. The same can be said about DonorsChoose, another favorite of mine.

Google+, as it exists today (tomorrow may be different), and Twitter aren't really communities. You can build connections, followings, events, lists, and loosely aligned links. But it doesn't necessarily build a community. And then there is Facebook, which can be used to create some semblance of a community. However, most organizations do not.

The difference is largely in how we define, view, and establish engagement. And today, most organizations define online engagement in terms of likes, clicks, shares, comments, etc. as Richard Millington reminded me the other day on Feverbee.* His argument is both right and wrong. And here's why...

Actions indicate activity, but not engagement or community. 

The cornerstone of Millington's argument is that people who "like" a Facebook page aren't active enough. That is a fair and valid point. However, I know people who live in my city that aren't very active either. Does that make them a non-member of the community? Or our community any less than a community? I don't think so.

That is not to say that Millington is wrong. He is right that Facebook pages aren't the best places to create a community. And he provides several alternatives.

However, that doesn't mean it cannot be done. I manage some pages that have all the elements of a community, even if the actions are not always evident. I also belong to a couple of Facebook groups. One in particular, which is private, is truly a small and vibrant community. Although it lacks the scale of something like BlogCatalog or Ragan, we all contribute and interconnect, from time to time, and have conversations. Some more than others. And that's okay too.

But more importantly, it seems to me, organizations don't necessarily have to build a community to create engagement (unless they want to encourage members to engage with each other). And that leads to another observation. Engagement is not measured by actions (outcomes maybe, but not actions).

This was a direction I moving in when I wrote an article about how word of mouth happens offline more often than online. When I pulled in the Keller Fay study, which looked at online activity as opposed to offline activity, it was to dispel the notion that the number of "likes" somehow means that the page is engaged. The study proves that many users are not even active, let alone engaged.

But there's more. If the same brand enjoys 880 million offline conversations during an average month, including 442 million active recommendations to buy or try it, it is obviously a highly engaged brand despite those people existing independent of any community. Likewise, looking at those numbers again, nobody discounts the half that have nothing to do with a purchase like social media skeptics always want to do with social media (e.g., they think unless it results in a sale, it's a waste).

Beyond that, nobody can really track all those silent conversations and conversions that manifest when we least expect it. I was reminded of one the other day.

I was speaking with my aunt over the holidays and we were talking about education. Before I could tell her what I thought about a specific issue, she told me what she thought, which I recognized as my own thought.

"That's uncanny," I said. "I was just going to offer that up."

"Really?" she said. "I just read an article about it."

"Really?!?" I just wrote an article about it. Where did you read the article you saw?"

"Oh, you know, come to think of it, I think it was on your blog."

We laughed, and my mind whirled at the same time. She is not a member of "my" community. She does not make any measurable "actions" online. And yet, she was obviously engaged by the article when she was reading it, and based upon her response, possibly influenced by it.

Sometimes I think the communication industry is so busy attempting to measure social media that we forget how real engagement works. Ergo, if you read this post (or at least some of it), you were engaged for a period of time. What happens after that — whether you click, comment, or share — has nothing much to do with it, unless you want it to.

*If you read the Feverbee post, which is a good one, please ignore my comment there. I misread his post, which cited repurposed content from my blog, and then made a statement that "this" was misleading. He meant how people define activity is misleading. It happens.

Overreaching With PR: Communicators Aren't Commanders

Bob Conrad touched on a great topic last week, even if some of the devices didn't fit together neatly. Oversimplified, he asks if public relations practitioners are prone to overstep in analysis and their own ability.

The answer is probably, but not all of them. It really depends on the individual practitioner. In using the UC Davis spray analysis for evidence as he did, however, he was absolutely right. Most public relations practitioners failed at an analysis because they did not understand the event.

What many public relations professionals who wrote about the UC Davis crisis did was enter in the aftermath and liberally apply standard crisis communication steps, ticking them off like a scorecard. Some of them even thought it was an Occupy protest. It really wasn't. It was about tuition increases.

Regardless, what public relations professionals who wanted the opportunity to include that now infamous picture on their blogs needed to do is take a different approach to presenting the real problem. To be a real case study of the UC Davis crisis, they would have to frame it properly, like this:

The Real Crisis Communication Case Study Question For UC Davis.

You're sitting in your plush communication office balancing your checkbook against your recent cost of living and merit raise because of the extra time you have, now that you are satisfied with next season's class schedule catalog that has finally been sent to print. (You're especially fond of the photo you picked for page 2). When, suddenly, your phone rings. It's the chancellor. 

"We have a crisis," she screams. "The kids are protesting about our insane tuition increase ... you know, the one that has driven up tuition 250 percent in the last ten years. It's turning into an Occupy protest down there and could turn violent. It's not even safe to walk into the campus, assuming those thugs let you by. They want to shut us down! What should I do? Or more importantly, what will you do?"

A. Walk out and express empathy with the mob in your new designer suit.
B. Recognize that they are only kids and give them treats and call their moms.
C. Flog yourself for not planning ahead and having the police already dressed in riot gear.
D. All of the above.
E. Mention the photo you picked for page 2 and go to lunch.

With the exception of "E," I framed these multiple choice questions based on the analysis that Conrad was right to criticize. The reality of this situation is that no cookie cutter crisis communication steps were going to help a public relations practitioner who needs disaster response experience.

The Reality Of The UC Davis Disaster.

The UC Davis crisis was largely unavoidable. The California university system is struggling to keep up with increasing employment costs that it cannot control and less funding as their budgets are cut. (Some of it could be fiscal mismanagement. Hard to say.) Sooner or later, these students were going to protest ten years of successive and excessive tuition increases. Call is predestination.

Given the atmosphere of Occupy rallies around the United States, it is even more likely that such protests (because there is no solution) will turn violent. It's just the mood of the moment, even among students who can afford a $24,000 to $54,000 per year for education. (Yeah, for UC Davis. Go figure.)

Students have rallies and protests all the time, at least when I went to school. Generally, unless they are disruptive or likely to turn violent, staff can reason with students to disperse as needed. Most of the time, you let them do their thing. (I worked as a resident assistant for two years.) If they do not disperse, you call the police (some schools have campus police; some private). Once the police arrive, it's their call — even if someone is advising them.

Of course, something else has changed since I went to school. Police protocols have been radically changed since 9-11, with most department training significantly more elective and aggressive than it was in years prior. In short, officers assess whether the protestors need to be subdued prior to removal (as opposed to simply picking up and arresting those passively resisting).

Personally, I think the officer in charge overshot. But the real point here is that the call to shoot pepper spray into the faces of those students was not one to be made by public relations. There were no PR advisors there, and the outcome might have been the same even if PR advisors were there.

So contrary to all the assessment write-ups, all public relations pros can do in this kind of a disaster is help mitigate it. Sometimes that means playing out a losing hand. And if you worked in communication for UC Davis on that day, you had a losing hand. What else can be said? No wonder I skipped it.

Do Communicators Make The Best Commanders?

The real question looming in relation to Conrad's post touches on a bigger question, spurred on by the Public Relations Society of America (PRSA). Lately, the society has been attempting to make the case that public relations people make great CEOs.

I mostly agree with Conrad, but for a different reason. A profession, in general, does not indicate whether or not someone would make a great CEO. However, PRSA is presumptive in its answer.

They ask: Who who else besides the CEO or chairman has their finger on the pulse of the company like a public relations person? While it varies from organization to organization, I might say "everyone."

It certainly would on a plane. You see, while a public relations professional might have an understanding of the pilot, co-pilot, navigator, flight crew, passenger service agents, ground crew, mechanics, and even passengers, I think most of us would think twice before letting him or her fly the plane. Unless, of course, he or she happened to be a great pilot.

Peeking Inside Their Minds: Shopper Profiles

According to a new study by Integer Group and its research partner Decision Analyst, there are four primary behavioral patterns that consumers adopt when shopping for big ticket items that range from home remodels and furniture to automobiles and vacation packages.

Assuming the study has merit, it may also reveal that recessionary pressures have shifted consumers away from status shopping and more toward being conscientious or frugal. I've parsed some of the study results along with four personality styles that have been identified in previous marketing efforts.

Four Predominant Shopping Behaviors. 

• Fretting Frugals (31 percent). They find shopping as enjoyable as a root canal. They are nervous about making the right and wrong choices, are extremely price conscious, and easily overwhelmed. They are the most likely to delay big purchases, not over price but because they want to make the right decision.

For years in marketing, I was taught to consider this behavior style as consistent with analysts, people who pore over lists and make comparisons based on detailed decisions. Price isn't what holds up the purchase as much as making a decision. They are also the least likely to share purchasing decisions to avoid criticism, preferring to look for information that affirms their choices.

• Experience Lovers (29 percent). They consider shopping a labor of love. They are also the most likely to become brand loyalists, convinced that the decisions they make are the right ones and will always be the right ones. The experience is as important as the products they buy.

This might be a new take on the modernized supporter, people who consider everyone's feelings in the household before making what they believe is the right decision. They value their role as making the decisions, carefully balancing the needs of everyone.

• Passive Purchaser (25 percent). They are the most convenience-driven consumers, looking for quick and easy purchases. They do not waste time researching products and are not loyal to brands, but rather make their purchasing decisions based upon intuition.

This most closely resembles a controller, someone who is especially adept at making decisions not because they enjoy it but rather because it needs to be done. They want to know the bottom-line price and benefits without wasting any time.

• Social Adventurer (15 percent). They believe that everything bought is a reflection of style and personality. They are also most likely to tell others about their purchases, mostly because their purchases reflect who they are as a person.

Based upon previous marketing models, they are most like promotors, people who are always looking for the newest ideas, products, and services. They are not brand loyal, but do take more time shopping to find products that seem to be one step ahead. With social networking only recently earning mass adoption, they are well-experienced in letting others know about positive and negative experiences.

Why The Research Might Matter.

Although I'm never fond of the label approach to marketing, the study could be significant in that shopping behaviors have remained relatively equal as a percentage of the population. This study suggests that the social adventurers (promotors) are diminished, perhaps being driven toward conscious or frugal behaviors due to economic pressures.

Such a shift in behavior would be consistent with other studies. Both frugal and conscientious buyers are more likely to seek stability and security, more likely to embrace a new economy, and more likely to appreciate the shopping experience. However, focusing on these behaviors might not be as useful as considering attitude or other psychographics that can help make marketing decisions.

For too long, marketers have been focused on demographics and reach as the two primary indicators in determining their marketing decisions. While such methods can work, they tend to be subservient to focusing on topical interests and attitudes that transcend age, gender, and other demographic bias.

Writing Santa Claus: When Mail Really Works

In one of the best programs ever conceived by the United States Postal Service (USPS), yesterday marked the first day of its annual "Letters to Santa" program. The campaign has helped fulfill holiday wishes of children and their families for nearly a century.

Through the annual letter-writing program, members of the public and charitable organizations respond to children's letters addressed to Santa Claus, the North Pole and other seasonal characters. The program is especially meaningful given how much people rely primarily on electronic communication. Receiving a letter, especially from Santa or Rudolph, can be an unforgettable experience for anyone.

"We are delighted to once again kick off the holiday mailing season with the start of our annual 'Letters to Santa' program," said Postmaster General Patrick R. Donahoe. "The Postal Service is gearing up for a huge mail delivery to the North Pole to help Santa and his elves get ready for the big day."

The tradition started in 1912 when then Postmaster General Frank Hitchcock allowed postal employees and citizens to respond to the letters in the program that became known as Operation Santa. In 1940, mail volume for Santa increased so much the Postal Service invited charitable organizations and corporations to participate and provide written responses to the letters and small gifts to the children who wrote them.

While the exact number of Operation Santa letters is unknown, the USPS estimates it reaches into the millions (New York City handles 500,000 letters alone). The program works because postal workers sort the letters between those that wish Santa a happy birthday and those children who are in need. Those from children in need are then adopted by individuals and organizations, who respond to the children and often mail them a gift based on the letter (volunteers are responsible for the gift and return address).

All names (except the first name) and location references are blacked out before volunteers and organizations adopt the letters to protect the identity of the senders. If you would like to participate in helping fulfill some of the wishes of children in need, please read the USPS letter adoption guidelines.

In lieu of having a letter sent in for adoption, the USPS also allows parents (and others) to mail self-addressed stamped letters (presumably written as Santa Claus) in larger envelopes to a specific address in Alaska. The postal service will send the letter back with a North Pole postmark. For more information, refer to the USPS Fact Sheet. To receive the North Pole postmark, letters must be sent prior to Dec. 10.

There are other commercial enterprises that offer paid Santa letters and gifts, but USPS is not associated with any of those programs and is the oldest Letters From Santa operation in the United States. It is generally managed by local post offices. The USPS has a dedicated page for the program.

Before any questions about whether the program is a wise investment of taxpayer dollars, it's important to note that the Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations. It is a self-supporting government enterprise. Most people are unaware of this fact.

Projecting Media: How One Source Becomes Two Stories

Depending the article you read, the next generation of television viewers is either growing or in jeopardy.

The Wall Street Journal reports an average of 5.8 million children between the ages of 2 and 11 watch television (broadcast, cable, and live) at any given moment. It's 1.7 percent higher than last year. The article concentrates on the big losses experienced by Viacom's Nickelodeon (down 15-20 percent) and Time Warner's Cartoon Network (down 11 percent) but cited gains in other channels, including the Disney Channel (up 5.9 percent) and The Hub (up 50 percent). The article alludes to more kids watching adult programs.

Ad Age, using the same data, ran a different story. It reported that Nickelodeon, Cartoon Network, and Disney XD all experienced heavy declines, and only hinted at the gains at Disney Channel and The Hub, dismissing the latter channel's gains because the comparisons are drawn against the low-rated Discovery Kids. The article then shifts to television's increasing competition from other media, including social networks and gaming. It also cites a Kaiser Family Foundation study that says children ages 8-18 watch 25 fewer minutes a day.

What is especially interesting about the two stories is that they were prompted by the same research from Nielsen. And yet, the overriding slant of the Wall Street article is that Nickelodeon is in trouble despite growing viewership, underscored by the channel's plea to wait for upcoming fresh episodes. Whereas the overriding slant of the Ad Age article is that the entire youth audience is slipping, with Nickelodeon leading the way, even if Viacom claims a ratings glitch.

Expect both articles will be shared with new slants. The Hollywood Reporter already spun off The Wall Street Journal piece. Ad Age has had fewer takers, but mostly because what might frighten marketers isn't likely to frighten parents. The more compelling observation is how media is shaped and what that means.

The consequence of journalism's time crunch is accelerating different realities. 

I've been fascinated with the changing shape of media for some time, especially as it pertains to perception and reality. And while we can only infer that the journalists have different world views of television, comparing the two stories demonstrates how validation is increasingly prevalent in media, not only for how we consume media but also in how professionals report it.

In fact, there is enough content on the Internet today to prove that children are both watching more and less television than they did 10 or 20 years ago. And for some authors, it is even critical to prove it one way or another. After all, there is no reason to write about the dangers of television to kids (or the benefits of television* before railing on the negatives) unless it constitutes a threat or benefit.

But what that really means, as a marketer or parent, is the emphasis need not be placed on the delivery system (television) as much as the programs being delivered. The same can be said for how we consume information and make informed decisions, with the burden of fact-checking falling less on reporters (citizen or professional) than on consumers.

In the case of the two articles above, the net takeaway might be that Ad Age is correct in that kids spend less time in front of the television but more time with a variety of media, with a heavy emphasis on multitasking. But where The Wall Street Journal is right is in that some channels are losing young viewers to better programs, especially those with more engaging or interesting content. More adult shows included.

Equally important for marketers, they might place more measure on the psychographics of these viewers, asking tough questions like: Which types of kids are watching Spongebob and which aren't, and are those kids more inclined to like this product or that product? Likewise, parents don't have to be passive about programing, but rather take some time to balance what is appropriate while appreciating that kids might not be as corruptible as we think.