Marketing That Matters to the Post-Recession Buyer John Gerzema, Young & Rubicam's brand maven, explains what it will take for buyers to vote for your brand with their wallets By Diane Merlino / October 09, 2012 Share 1 -- Compete Where it CountsIf you’re a cruise company, other cruise companies aren’t necessarily your competition. The same holds true for any travel supplier vertical selling a discretionary travel product. Brand maven John Gerzema explains why: “One lesson for marketers is they are always focused on their categories; it’s always Coke versus Pepsi or Hyatt versus Hilton. I think you have to step outside your category, because that’s the way customers are thinking today. With a finite amount of disposable income you are going to choose the things in your life that give you meaning personally, and that’s where you are going to invest and spend. If you love watches, you are still going to have a nice watch, but maybe you aren’t going to take as nice a vacation. Or vice versa. I read that American Girl dolls did really well during the recession, and I would have thought the opposite. Apparently parents were using them as a gift because they couldn’t afford to send their kids to summer camp. So there you have an example where you would think American Girls’ competitors were other dolls and toys, but their real competitor was summer camp. You have to think outside your category and consider your customer’s mindset, and that gets back to this idea of empathy — how do you really truly get in to understand the emotions of the travel experience, the good and the bad.”Put your customers at the center of everything you do, put some skin in the game to prove it, and always live up to your promises. Those are a few of today’s golden rules of marketing, according to John Gerzema, co-author of Spend Shift. How the Post-Crisis Values Revolution Is Changing the Way We Buy, Sell, and Live.”Gerzema oversees Young & Rubicam’s Brand Asset Valuator, a database that tracks consumer attitudes and behaviors in 17 countries. That includes a quarterly update on how 17,000 U.S. consumers are feeling about hundreds of brands in a variety of industries, including travel, and how those feelings translate into who they will pull out their wallets for. “Marketing now is about a company aligning with its customers rather than just trying to sell them,” Gerzema told Travel Weekly PLUS. There’s a lot at stake. In the new ‘citizen marketplace’ Gerzema describes, buyers are, “realizing that their pocketbook, their wallet, is actually like a vote.” And they are casting their votes based on whether or not the company in question is “delivering the ethical aspects of empathy, trust and integrity.” That’s a race companies want to make sure they win. What do you mean by the rise of a “citizen marketplace”? That’s the reality that nearly two-thirds of GDP in most countries is created by consumerism. A marketplace that is customer-centric puts customer needs — and their relationship with your brand — at the center of the business model. This means that rev par, service initiatives, and other metrics critical to travel leaders must be weighed in the context of enhancing the relationship between your property or brand and your guest. Maybe that’s obvious. But expediency often creeps in, and that breeds problems like inconsistency and disappointed guest experiences.The market is increasingly cluttered and fragmented, so your brand’s identify becomes ever more important. A marketer who relies on ubiquity is facing a long and unprofitable road to commoditization. Differentiation is what matters. What’s the relationship between differentiating a brand and the ability people have now to gather all kinds of information on companies from a lot of sources, including customer review sites?In our BAV (Brand Asset Valuator) data, we looked at the forms of media which were seen as the most different and distinct, and which ones were the most trusted, and the fastest growing medium for trust and differentiation was social media. That’s largely because it’s participatory; you can fire back at a company, you can shape and mold a story, like you can on Wikipedia. It allows the voice of the customer in real time. The macro trend behind that is we’ve seen the level of trust in companies and their brands fall 50% since the crisis. I guess we would have expected to see trust decline when the banks got the bailouts and the auto industry went sort of belly-up, but what was really interesting is that there was a lack of trust in telecommunications and restaurants and food and all these other categories. What happened there?We think that people began a full reappraisal of what they were buying. They were thinking a bit more carefully about whether or not they could trust the products and services they were buying, and that related to everything from food recalls to hidden fees on bank cards, all those types of things. If you put that into context, what’s happening is that marketing today is about actions and not words. Marketing heretofore has been more focused on getting your message out there, on the positioning of what you’re trying to sell, and less focused on the experience. In this world, because of social media, people are so incredibly sophisticated — and they can use Yelp and TripAdvisor and Wanderfly, and all these other interesting travel websites and communities — to really quickly understand if a cruise ship or a hotel or a restaurant is living up to its promises. Marketing now is about a company aligning with its customers rather than just trying to sell them. What do you mean by a company aligning with its customers?Think about the success of Hyundai. They had this buyer’s reassurance program (Hyundai Assurance) during the crisis — if you lost your job you could return the car. And they grew 12% in what was a dismal auto market at the time. That was a tactic that turned out to be a really core part of their strategy because it resonated so strongly with people, that the company was willing to put skin in the game. Or think about the success of companies like Zappos, with free shipping and free returns. It’s about picking some hallmark elements of your experience that are going to define your brand, and proving that they are going to be the elements of empathy and loyalty that are built into the contract with your customers. And how can a company prove empathy and loyalty?A lot of coming technology is going to allow for more intimate, personalized service. I very much believe that with the power of smart phones and in what they’re calling the EMV cards that will be prevalent in our credit cards and phones in the next year or so, a hotelier is going to identify one of their gold members when they walk into the lobby, before they ever check in, on the basis of the person’s phone pinging them. It’s going to really change customer service. It would allow airlines to cater to their global service customer who may be in row 22E, who didn’t get a good seat, so they might want to take better care of that person during the flight. I just saw the other day that Safeway in Denver is experimenting with personalized pricing based on your loyalty card data. That’s where I think all this is all going — rewards that really matter. Do you think this highly personalized approach to customer service is possible in every industry? In the travel industry? I think it’s going to be. All this technology is going to move brands away from generically treating customers as a flock where everybody gets the same deal to truly catering to customers on a more one-on-one basis. Logistics aside — and I’m completely naïve on that — I think a lot of the smart phone technology is going to allow for this really tremendous customer service that helps you identify your customers and find ways to give them unique rewards and gratification. Hyatt pioneered it a little bit with their random acts of kindness. It was a really nice program where they tried to find ways to incentivize their customers with these little surprises and delights. But I don’t think it’s going to need to be random; the technology is going to allow you to pinpoint your customers and maximize their experience, and give them rewards that they really want. Let’s get back to the idea of building trust with customers. How can companies do that? One of the really interesting trends right now involves this idea of tactics or strategies. It goes back to what Zappos or Hyundai did, of having a policy and really sticking to it. That actually helps differentiate your brand and build trust. Zappos is one of the most trusted brands in our survey. My wife is a Zappos addict, she buys Zappos for our daughter all the time. I see those big white boxes come rolling in every day. She loves it because it’s free shipping, free returns, and you can keep the merchandise for up to a year and still get a credit. It’s those really simple hallmarks of an experience. I think that’s what’s lacking in the travel industry, those tangible anchors that a customer can rely on. Are you talking about a company policy, or a mission statement?It can be about these small tactics — these things like free shipping from Zappos or the buyer’s assurance program from Hyundai where you could return your car. Walmart has done a really nice job with their mommy bloggers. It’s called Walmart Moms, where you can go to 11 moms for advice on all types of merchandise and they actually act as an outside advisory board to Walmart. It’s a network of these really powerful mommy bloggers, sort of an oversight committee. Of course Walmart has had some challenges, and those things build trust. But I think you also have to have some real tangible policies and programs. They could be tactical. One of the big challenges with companies, and one of the mistakes they make, is that everything is so complex. In the travel industry, oh my goodness, it’s enormous. If you can find some simple tactics that can become a point of contract with your customer, those are the things that start to build trust. One Minute, One Thing: John Gerzema [MEDIA_1] Your research identified a strong trend away from mindless to mindful consumption. Will that impact how companies do business?Definitely. If we are moving from mindless to mindful consumption, in a world where we have less money, our dollars are going to be appropriated more carefully and more effectively to our benefit. We saw this in a lot of the data. People were much more price elastic in their behaviors before the crisis and now they are realizing that their pocketbook, their wallet, is actually like a vote. It’s a way to vote for a company almost every day on the basis of whether or not they are delivering the ethical aspects of empathy, trust and integrity. That’s a function of a marketplace where we have been hammered, and people have less disposable income. We’ve moved from a credit to a more debit way of living, where we don’t have the ability to pay for it tomorrow. We called it ‘Wimpynomics’ — ‘I’ll gladly pay you Tuesday for a hamburger today.’ That’s what households did and you can’t do that anymore, you can’t pay it forward. People are much more present with their spending, they are much more in the moment. We started to see that they were using their money as a form of a vote to cast aspersions against companies whose values didn’t match their own. For more insights on the post-recession customer, please see The Post-Recession Customer: It’s All About Trust, in the Oct. 3, 2012, issue of Travel Weekly PLUS.