| Text of talk for ARF Business Intelligence Forum Philadelphia, PA December 7th 2001 Reality Bytes: Selling in Hard Times By: Joel Baumwoll President, Brand Doctors Baumwoll International Consulting Ltd. New York City, NY www.brandoctors.com Last Wednesday's NY Times had four stories that struck me as kind of emblematic of our day. Two of them were in the sports section. One reported that Jason Giambi was expecting to sign an 8 year $140 million contract to play first base for the Yankees next year. The second story, and this is closer to home, is that Alan Iverson signed a lifetime $10 million a year contract with Nike. Imagine, Lifetime. $10 mil a year! The third story was in the Metro section. It reported that Nazir Kahn, a New York limousine driver had seen his income drop from $1000 per week to $600 per week after the Sept 11th attacks. And that he had increased his workday from 12 to 18 hours to make that amount. The fourth story simply said that ABC was likely to cancel the show "Who Wants to be a Millionaire" after this season due to falling ratings. What're the messages here? The Yankees aren't shelling out all that dough just to win ball games. When they win, people like Nazir Kahn tune in more often, TV ratings go up and they can charge advertisers more. And advertisers like Nike will buy the time and run commercials starring Alan Iverson in the hopes that Nazir Kahn's kids will buy their $150 shoes. But fewer people are watching "Who wants to be a Millionaire." Why? I doubt its because fewer people want to become millionaires. More than likely, if they are people like Nazir Kahn, they have other things on their minds. For one, they are wondering how they can pay the rent. And keep credit card bills from turning pink. If they are people like you and me, they are wondering how they'll make up the more than 60% drop in the value of their 401Ks. Economic contraction has been happening for well over a year now. Lost jobs, lost wealth, burst dot com bubble, lowered incomes, lowered expectations. These calamities will take their usual toll on our businesses. Some companies will lose sales and share and others will hold their own. And we will evolve through another cycle. We've done it before. I don't mean to belittle hard times. They are hard. There's nothing new here, except to people who've not experienced this before. For those of us over 40, we've seen it before. But there is something new. Something that changes the equation in ways we can't begin to calculate. Fear. Millions of Americans are wondering if they and their loved ones will live through the Christmas holiday. They wonder if they will be blown up on a bus by a suicide bomber, killed by some phantom bacteria in the mail, shot by some fanatic with a machine gun in a crowded mall, or drink poisoned water. Yesterday I heard a two year old ask his nanny if those big apartment houses across the street were going to come crashing down on him. In November, there was a huge upsurge in the number of people who bought guns and wrote their wills. Fear changes a lot. Recently I saw an ad in the Sunday Times from a tony Fifth Avenue store that asked "Is this the day you do something dramatic about your ice bucket?" I wondered how many fearful and unemployed readers were sitting out there at the kitchen table in their underwear, scratching and drinking a second cup of bad coffee, munching on the remains of a Twinkie asking themselves that same question? Is this the day I do something dramatic about my ice bucket? Makes you wonder what was on the mind of that copywriter, doesn't it? I'm sure he or she watches CNN, reads the headlines, and maybe even looks at CNBC for the latest financial news. Do you think he's planning to do something dramatic about his ice bucket? That got me thinking about all the stuff we buy and all the stuff we want to buy. If you're like me, you've got about six feet of catalogs piled up either next to your bed or in the john. Pages folded over next to some irresistible object like a 50-inch flat screen high definition TV. Or the new Apple IPOD, with a 5 gig hard drive that will record up to 1000 hours of your favorite music. Or the rechargeable combination drill, saw and screwdriver with the big yellow handle. Or maybe you get that catalog with all the incredible cheeses, pates and caviar? Or the one with those Lagiole knives from Thiers France-the ones that look like jewelry and cost as much? I recently bought a twenty-inch French made saute pan with an inch thick steel clad copper bottom. The thing weighs fourteen pounds, and my wife refuses to even lift it. Why do we buy these things? I think it is because we convince ourselves that we absolutely must have them. That they will, in some way transform our lives; make them better, more pleasurable, more meaningful. We're kidding ourselves. And we know it. This simple act of self-deception is crucial to the process of buying most of the stuff we shell out hard earned money for. In fact, millions of people go into hock up to their eyeballs to buy stuff like that. Kids who work for minimum wage will spend $150 for the right pair of sneakers. Men will spend forty bucks for a bottle of single malt scotch. Women will fill their closets with more shoes that they could wear in a lifetime. What about the cars? If you're like me, you ogle every Porsche Boxster, Z3 or CLK430 that comes within spitting distance. But if you've ever been inside one of these cars, you can't see its beautiful lines, its swoopy sheet metal and sexy grill. The fantasy that life will be better when you saunter down the street in your new F-16 stealth shoes is essential to allow yourself to buy them when you know you can get a perfectly good pair of Keds for $19.95 at Walmart. Why do we do it? To quote Shakespeare "it is the stuff that dreams are made of." And if America is known for anything in this world, it is for its ability to foster dreams. When people are afraid, they don't dream. They don't deceive themselves that a new TV, a spiffy car or a trendy pair of shoes will transform their lives. They know better. They buy what they need and want, to be sure. Consumer spending was at record levels in October. They may buy, butÉ They put their dreams on hold, waiting for a day when it is safe to fantasize about the future. They are reluctant to yearn to gratify what seem like trivial needs when they feel at risk, and they see so many people around them having lost things that really matter. The response is immediate Éand visceral. Listen to what Tom Ford, the chief designer for Gucci and Yves St. Laurent says: "I get daily sales figures, and on Sept. 12th, there was a big drop in our business all over the world. Precipitous. But the swing in fashion didn't start with Sept. 11th. The recession in luxury started last season, about six months ago. What happened on Sept. 11th was the period on the end of the sentence. On Sept. 11th, the 90s ended." You might say that Gucci is the leading edge of the dream. And if the dream is evaporating for Gucci, what does it mean for the hundreds of mundane products and services we all buy and use? I suspect that a new language will begin to be heard: one that speaks to people more from the heart. Charles Dickens said (quote) "Electric communication will never be a substitute for the face of someone who with their soul encourages another person to be brave and true." A very smart copywriter I worked with told me that knowing what people do to messages was more important than knowing what messages do to people. Imagine trying to sell something to a person standing on a frozen lake hearing the ice begin to crack. Unless you are selling rope or rowboats, you're gonna have a tough time getting them to even listen to you. What people do in hard times is predictable. They postpone certain luxuries, they substitute small indulgences for big ones, and they look for bargains and lowered prices on most everything. They still eat, drink, play and indulge themselves. They may splurge on a few things that are really gratifying, and become very chintzy with products or services that aren't too important to them. That's why, in some categories, the most expensive and the cheapest brands grow at the expense of those in the middle. The value of escape goes up. They seek comfort at home, with friends and family, take fewer risks with money and with new big ticket items. To be sure, there are people out there who want a new ice bucket. But I wonder how many would respond to that headline? When people are afraid, on top of being tight for money, we must understand what they do to messages. They aren't as willing to buy the idea that life will be brighter, better and worry free if they use this product or drive that car or drink this beer. This is a whole new ballgame for young Americans. Before Sept. 11th, uncertain outcomes were reserved for sports, horse races and the stock market. Excepting many black inner city residents, most Americans under 40 don't know from economic hardship and life threatening enemies. I'm
old enough to remember fall out shelters, nuclear attack drills and
the Cuban missile crisis. Few people are here who recall December 7th
1941 I believe that we need to start talking to people face-to-face, heart to heart, soul to soul. Whether you are selling shoes, beer, detergent, tires, the services of a bank or broker, your challenge is to figure out what you've got to say that really matters and how to say it so people listen. It would help to stop calling them consumers and to think of them as people. And that means listening to people with fresh ears. |